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What to Do About Healthcare if You Retire Before Age 65

An early retirement sounds like a dream come true for many people. For others, it’s simply a necessity for one reason or another. But if you’re due to retire before age 65, or simply thinking about it, there is one crucial factor to consider: What will you do about healthcare if you retire before the age of Medicare eligibility?

If you find yourself in this predicament, or heading in that direction, you do have options.

Ask about COBRA. If your employer is COBRA-eligible, you can continue enrollment in their group healthcare plan for 18 months after your employment with them ends. And in certain situations, that coverage can extend to 36 months. However, in many cases the COBRA coverage is more expensive, because you’re now paying the full premium without an employer contribution. So do estimate the costs before making a decision.

Join your spouse’s healthcare plan. If your spouse is still working for an employer that offers healthcare benefits, you could simply join their plan. Be aware that their plan might not offer coverage equal to your old one, but there can be various ways to deal with that. A health savings plan can help (more on that later) or you might be able to enroll in additional supplementary policies such as a dental or vision care plan.

Shop for a plan through Covered California. Our statewide health insurance exchange offers a plethora of options for healthcare coverage. And depending upon your income and household size, you might qualify for a subsidy to help with the cost of your premiums. If you plan to relocate in retirement, check with that state’s exchange or shop on the federal exchange, if applicable.

Enroll in a health savings account (preferably now). If you’re enrolled in a low-premium, high-deductible plan now, you can go ahead and set up a health savings account. This account allows you to save pre-tax dollars in an account to be used toward qualified healthcare expenses. And if you don’t use all of your funds during any particular calendar year, the money rolls over to subsequent years. In this way, a health savings account can save you money now, while also serving as a retirement savings vehicle to be used toward healthcare costs in the future.

If you’re considering an early retirement, before the age of Medicare eligibility, call us to discuss your healthcare plan options first. We can help you figure out how to proceed in the most affordable way for your situation.




You Might Be Able to Enroll in Both Medicare and Medi-Cal

Once you retire and enroll in Medicare, you might be surprised to learn that you can face thousands of dollars in out-of-pocket healthcare costs each year. That can come as an unpleasant shock to those who are already living on a fixed income and are relying on Medicare to cover their medical expenses. But for some lower-income retirees, there is another option that can help.

Medi-Cal is a program separate from Medicare, but also designed to help with the cost of medical care. It’s funded by both federal and state governments. And yes, some people can qualify for both Medicare and Medi-Cal.

When Medicare doesn’t cover the cost of a service, Medi-Cal often does. Those who are “dual eligible”, meaning they are eligible to enroll in both programs, might be happy to learn that Medi-Cal can cover the cost of things such as:

  • Medicare Part B premiums
  • Medicare Part B deductibles
  • Medicare Part A deductibles (for hospital stays)
  • Medicare Part D copayments, and deductibles for covered drugs
  • Nursing home care, in facilities that accept Medicaid payment
  • Home-based and community-based supports, depending on services available in your area

In order to qualify for Medi-Cal you must meet certain income and assets tests. In some cases, you might qualify by income, but own certain assets that disqualify you. Under those circumstances it can be helpful to speak with an estate planning attorney who is experienced in helping clients qualify for Medi-Cal.

If you don’t qualify for Medi-Cal, certain other savings programs do exist. If you struggle with the cost of out-of-pocket medical bills, call us, we are licensed agents who can assist with your options.


Veterans Can Access Valuable Home Health Benefits

The Department of Veterans Affairs (VA) offers a comprehensive healthcare package to our veterans. But what many beneficiaries don’t know is that they can access home healthcare benefits through the program, through the VA’s Homemaker and Home Health Aide program (H/HHA). If you or someone you love is a veteran, you should be aware of these valuable benefits, so that you can access in-home care in the event that you ever need it.

The Homemaker and Home Health Aide program provides assistance with personal health care needs and other daily activities, by trained workers who come directly to the veteran in his/her home. The community-based program is supervised by a registered nurse, with the goal of helping veterans continue to live independently or with their family. Aside from valuable daily healthcare services, an in-home healthcare worker provides companionship and allows for respite for family members who might normally provide this care.

Each service provides for unique services, depending upon the individual’s needs. The health care services provided might include:

  • Assistance with medical equipment
  • Routine monitoring of health conditions or general health
  • Help with exercise
  • Abulating or transfers
  • Assistance with dressing, eating, toileting, and bathing, as needed

But in-home healthcare isn’t solely focued on medical assistance. Homemakers or health aides can also assist clients with tasks such as:

  • Laundry services
  • Grocery shopping and meal preparation
  • Escorting the client to appointments
  • Light housekeeping necessary to maintain a safe and clean environment for the client

Providing these services to veterans helps not only them, but also their family members or other caretakers who need respite from these daily tasks. Those who receive in-home care services often remain at home longer, and avoid the need to move into a skilled nursing facility.

To qualify for the veterans home care program, an applicant must:

  • Be enrolled in VA healthcare benefits
  • Qualify for community care services
  • Obtain a doctor’s order to receive in-home care services

For more information on this topic, contact us and we will refer to you a qualified service provider.

Watch Out for Medicare Scams

You might wonder why on Earth anyone would want to steal your Medicare number and other data. Are they planning to obtain medical services using your benefits?

That’s possible, but much less likely than other common scenarios. For one thing, all of your Medicare information can help a scam artist steal your identity, which they would then use to obtain credit cards or other resources in your name. Fraudulent companies might also bill your plan for products and services you don’t actually receive. And sometimes, actual insurance agents are to blame; unscrupulous ones do exist, and they might trick you into enrolling in a plan you didn’t want in order to gain the commission.

To protect yourself and your information, watch for these common signs of Medicare fraud.

Calls from representatives. Medicare does not employ representatives who call you to ask details about your plan, your Medicare number, or other information. If anyone calls you claiming to be a Medicare representative, hang up the phone. If you’re concerned about your plan, you can call your benefits administrator to check.

Fear-based tactics. Fear-based tactics are always a sign of either unscrupulous sales tactics or outright fraud. But just to clear up a common misconception: You won’t “lose” your benefits if you don’t make certain changes. You will be re-enrolled in your current plan year after year, unless you make a change during the Annual Election Period in the fall or Medicare Advantage Open Enrollment in January through March. Anyone who tells you otherwise is trying to force you into a change that benefits them.

Fishy rebates or refunds. If you do overpay for a service, your benefits administrator will send you a letter about it. Anyone offering you a rebate or refund over the phone is just trying to gain access to your information.

Tempting extra benefits. Insurance brokers who approach you with tempting “extra benefits” should be viewed with suspicion. This language is often used to trick you into switching your plan or enrolling in additional ones. Always ask to see a broker’s license number before doing business with them.

And of course, know that you can always call us with questions about Medicare. We pride ourselves on doing business ethically and helping our customers access the Medicare plan or plans that are right for them.

How Much Is the Penalty for Late Medicare Enrollment?

You have likely heard that you’re required to enroll in Medicare at age 65, and that you could face a penalty for failing to do so. But how much is the penalty for late Medicare enrollment? And are there any exceptions?

Yes, you’re supposed to enroll in Medicare at age 65, either opting for Medicare Parts A and B (Original Medicare) or a Medicare Advantage plan (which combines the two into one plan). Medicare Part A is free for most people, assuming you accumulated enough work credits, so it’s Part B that imposes a premium and potentially a penalty for late enrollment. That premium will amount to 10 percent of your regular Medicare premiums for each year that you delay enrollment. So if you delay enrollment by five years, your Medicare premiums will have a 50 percent penalty tacked on.

Most people pay the base premium, but some pay higher premiums due to earning higher incomes. So that’s another factor to consider.

But yes, there are exceptions to these rules. If you’re covered by an employer’s group healthcare plan, and that employer has more than 20 employees, then you don’t have to enroll in Medicare until your employment ends. At that point, you will have an 8-month Special Enrollment window in which you can enroll. After that, the penalty would apply.

The above rules also apply to those who are covered by a spouse’s employer-based plan.

Otherwise, yes, you’re required to enroll in Medicare at age 65, during your regular enrollment window. Otherwise you will face a penalty. If you feel that you can’t afford the premiums, you can apply for the Medicare Savings Program, which covers your premiums for you. Those who qualify for the Medicare Savings Program automatically qualify for the Extra Help program, which covers the cost of a Part D (prescription) plan.

It’s very important to enroll in Medicare when you’re required to do so. But if the process seems overwhelming, just remember that help is available to you. Give us a call and we’ll walk you through the enrollment process so that you can avoid penalties or the danger of going without health insurance.

A More Convenient Way to See Your Doctor

It’s happened to all of us at some point. You need to visit your doctor, but they don’t have any available appointments. Or, the appointments they can offer won’t fit into your busy schedule. Maybe you feel under the weather, and just don’t have the energy to drive all the way to the office and wait for a long time in a crowded waiting room. And at times, many of us lack childcare that makes going to the doctor convenient for parents.

So you might be happy to hear that you do have other options for scheduling an appointment with a doctor. For minor illnesses or consultations on bothersome symptoms, you can access virtual care benefits through your regular healthcare plan.

With virtual care, you simply fill out a few forms on a computer or mobile device. These are the same type of forms you normally complete at a medical office. Then you might be asked to undergo a screening questionnaire, so that the doctor can assess your symptoms. Finally, you will consult with your doctor via instant messaging, video call, or regular phone call.

If you doctor feels comfortable with diagnosing you over the phone, you’ll never have to set foot in an office. Simply visit your preferred pharmacy, pick up the prescription called in by your doctor, and follow any other instructions he has given you.

The whole process of virtual care is much faster than a typical doctor appointment, and more convenient for the vast majority of us. It might even help to reduce the spread of common illnesses like colds, flus, and covid variants, because sick people are no longer required to show up for in-person appointments. That’s great news, because now you don’t have to worry about picking up a second infection while you sit in a waiting room.

For more information on your virtual care benefits and how the system works, call your plan’s customer service line. And as always, let us know if you have questions about healthcare plans in general. We can help match you to the plan that best fits your needs.

One Great Way to Lower Your Taxes and Medical Costs

Tax season is well underway, and most of us are trying to locate any potential deductions that might save us money. If you take care to track your medical expenses diligently, you could save money in two important ways.

First, all of your out-of-pocket, unreimbursed medical expenses can be utilized as a tax deduction if they exceed 7.5 percent of your adjusted gross income. “Unreimbursed” means that the expense was not covered by your healthcare plan, and the plan did not pay you back for the expense. You can deduct medical expenses related to the following:

  • Dental visits and treatments
  • Vision care appointments and corrective lenses (contact lenses or glasses)
  • Hearing screenings and hearing aids
  • Presciption medications
  • Your portion of the expense for all medical appointments, treatments, and surgeries
  • Purchases of insulin along with any other diabetic supplies
  • Travel expenses when you must travel to obtain care

Deductions reduce your taxable income for the year, rather than directly reimbursing you (as a credit would). Still, deductions can be valuable if you spend a considerable amount on your medical care. Make sure to attach Schedule A to your IRS Form 1040 in order to itemize your deductions, and keep proof (like receipts or credit card statements) in case you are ever audited.

In the course of gathering proof of your medical expenses and filing your taxes, you might notice that it’s quite a lot of work! That’s why you should set up some sort of filing system for receipts or card statements now. If you track your spending throughout the year, everything will be handy in a convenient folder next year at tax time.

And tracking your medical spending can help in one more very important way. During Open Enrollment for healthcare plans, you will have a very clear idea of how well your plan is serving you. If you feel that your out-of-pocket spending is too high, we can help you compare other health insurance or Medicare plans so that you can make a switch that benefits you. Give us a call if you have questions about your coverage and out-of-pocket spending limits, and we’ll be happy to help.


Covering the Cost of Nursing Home Care

Many of us will require some form of long-term nursing care during our retirement years, and often that will mean residency in a nursing home. But Medicare usually does not pay for this service, and a nursing home can cost several thousand dollar per month. That means we should all plan for the eventual cost of nursing home care, just in case we end up needing it.

Since Medicare won’t pay for a nursing home, the average person has essentially three options:

Qualify for Medicaid (or Medi-Cal in California). This state-funded healthcare program does pay for nursing home care, and will usually pick up many other out-of-pocket medical expenses not covered by Medicare. However, Medicare is a needs-based program, and you must qualify based on your income and assets. At times it might become necessary to mee with an estate planning attorney, who can help you make certain maneuvers with your assets so that you can qualify for Medicaid and get your nursing home stay covered.

Self-pay. If you have significant financial assets, you might opt to pay for a nursing home stay yourself. But we definitely recommend that you do the math on this decision well in advance of retirement. For most of us, a significant length of time in a nursing home could wipe out retirement savings and create a dire situation for our spouse or other family members, so don’t just assume you’ll cover the cost yourself.

Long-term care insurance. By purchasing long-term care insurance as part of your retirement planning, you can ensure nursing home coverage (or even coverage for in-home nursing care) in the event that you need it. But timing your enrollment in a policy is critical. The earlier you enroll, the lower your premiums. If you wait until an advanced age to enroll in a long-term care insurance policy, the premiums might be much steeper.

As always, we’re here to help you understand the limitations of your Medicare plan and help you make decisions around healthcare and finances. Call us to discuss the issue of nursing home care, and we’ll discuss plans for your future.

If You’re Still Working, Do You Sign Up for Medicare?

Medicare eligibility begins at age 65, but plenty of people are not yet retired at that age. So what if you’re still working, and covered by an employer’s group healthcare plan? Do you still need to sign up for Medicare? And if you miss the intitial enrollment window, will you pay higher premiums later?

You might not be required to enroll in Medicare just yet. If you’re covered under an employer’s healthcare plan, or your spouse is the one working and you’re both covered by the plan, you might be able to delay your intitial Medicare enrollment at age 65. It depends on the size of your employer.

If your company employs more than 20 workers, then you can stay on their healthcare plan. You aren’t required to enroll in Medicare until you lose this coverage (such as when you retire later) and your Medicare premiums won’t be any higher as a result of delaying your enrollment.

However, you might wish to go ahead and enroll in Medicare Part A, because the hospitalization coverage is free to most people. Medicare Part A will work as coinsurance, picking up the tab after your primary healthcare plan pays out first. You might also consider Medicare Part D (prescription drug plan) if your employer’s plan does not have adquate prescription drug coverage.

If your company employs fewer than 20 people, then in most cases you will need to enroll in Medicare. Medicare will provide coverage first, and your employer’s plan will serve as coinsurance if you decide to keep it. Like everyone else who enrolls in Medicare, you will choose between Original Medicare or a Medicare Advantage plan.

Keep in mind that when you do enroll in Medicare, you won’t be eligible to save money in a health savings account (HSA) anymore.

We have some good news: You don’t have to figure out all of these complicated rules on your own! You’re entitled to free help with your Medicare enrollment, and we can provide that assistance to you. Give us a call as your 65th birthday approaches, and we can help you understand which steps are required next. Then we will assist you as you sort through your options.

If You Experience Any of These Life Events, Reevaluate Your Health Insurance

Most people carefully consider their health insurance options before enrolling in a plan, so that they select the one that best suits their situation. But when situations change, your health insurance plan might not be a good fit anymore. The good news is that you’re probably not stuck with your health insurance plan until the next enrollment period.

If you experience changes to your living situation, family structure, or finances, it is likely that you will become eligible for a Special Enrollment Period. During this time you can reevaluate your health insurance plan, compare it with others available to you, and select a new one in the event that you decide it’s a better fit. Certain other very unique situations might also qualify you for a new enrollment period.

Some of these situations include:

    • You lose your existing health insurance plan due to job loss or something else
    • A new child is added to the family, by birth or adoption
    • You get married or divorced
    • A family member passes away
    • Your child turns 26 and ages out of your plan
    • You turn 26 and age out of your parent’s plan
    • You move to a new zip code or county
    • You’re a student and move away to attend school, or move back home after attending school elsewhere
    • You move into or out of a shelter or other type of transitional housing
    • You’re released from jail or prison
    • You’re a migrant worker and change locations
    • Your finances change, such that you’re no longer eligible for Medicare or Medicaid (Medi-Cal in California)
    • Your finances change such that your coverage eligibility changes
    • You join or end service with AmeriCorps
    • You become a US citizen
    • You join a federally recognized tribe
    • You gain status as an Alaska Native Claims Settlement Act (ANCSA) Corporation shareholder

Your health insurance plan is important, because it helps you to manage healthcare expenses. Keep the above events in mind, in case one of them occurs in your life. And then give us a call right away to see if you qualify for a Special Enrollment Period to make changes to your health insurance. This period will only last 60 days, so let’s get started as soon as you become aware of a change.



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