Eldercare Locator – A Free, Public Service For Connecting Older Adults and Caregivers with Community Resources

The Eldercare Locator is a service of the U.S. Administration on Aging.  It’s been around for nearly 20 years.  Its toll free number is 800-677-1116.  Its website is http://www.eldercare.gov.  It  provides information about long-term care alternatives, transportation options, caregiver issues and government benefit eligibility.  This information is also available in Spanish and other languages.  There is an extensive database of links, publications, and other resources.

Medicare Part D Changing

In the coming year, seniors will see some of the biggest changes to Medicare Part D since the prescription benefit became available in 2006. More than 17 million are enrolled in private drug plans offered through Medicare.

The program’s benefits will improve for those who land in the program’s prescription drug coverage gap, the so-called donut hole. It has been announced that the nation’s pharmaceutical manufacturers will provide 50 percent discounts on the cost of the covered brand-name prescription drugs for beneficiaries in the Medicare Part D coverage gap starting in 2011.

Benefits of the Affordable Care Act for seniors include the provisions in the law that help fight fraud and make certain preventive care and annual wellness exams remain free for most Medicare beneficiaries.

The average 2011 Medicare prescription drug plan premium will remain similar to rates beneficiaries are currently paying – an increase of $1. Most Medicare prescription drug plan premiums will remain stable next year and beneficiaries will find there are clearer plan options, including many plans that can help them save even more. They will find that the Affordable Care Act improves the value of drug coverage they get next year.

More Changes to Medicare

As of June 1, people shopping for Medicare supplement insurance, or Medigap coverage, have some new options. Insurers have started selling two new lower-cost Medigap policies and stopped offering four others. At the same time the federal government, which regulates Medigap benefits, started requiring plans to cover at least a portion of hospice costs.

Medicare doesn’t pay for everything. Because patients are required to pay a portion of some of their bills, about 89% of the 47 million people with Medicare have some form of supplemental health insurance. Many opt for a federally subsidized private Medicare Advantage plan or they receive supplemental coverage from a former employer. Close to one-fifth purchase a Medigap policy.

These plans are sold by private insurers and offer standardized menus of benefits. As with most insurance policies, the more benefits you want, the higher the premium.

Whether the recent changes to these plans have an impact on you depends, in part, on when you purchased your Medigap policy. If you enrolled before June 1, you can hold onto your policy – even if it’s no longer being sold – and your benefits won’t change. Consumers are not required to purchase a new plan.

The changes apply only to Medigap plans sold after June 1. On that date, insurers stopped selling some of the plans partly because those plans offered some benefits now covered under original Medicare or Part D prescription-drug plans.

The new options charge lower premiums than most Medigap plans, but consumers must pay a higher share of the cost for various services, such as paying half of the $1,100 deductible for hospitalizations, or paying $20 for each doctor’s visit and $50 for emergency services.

Regardless of which Medigap policy you choose, if you are buying now, you will receive a new benefit covering some portion of the cost of drugs and respite care that are part of hospice care. The hospice benefit isn’t available to people who keep their existing plans, so some consumers may be tempted to switch plans. But there are potential downsides to doing so.

In many states, insurers are required to issue Medigap policies only under certain circumstances, such as when someone age 65 or older applies for coverage within six months of enrolling in Medicare Part B, which covers doctors’ visits. So someone who tries to switch plans at a later point may be denied coverage or charged a higher premium due to existing health problems or advancing age.

For more information on Medigap plans, visit medicare.gov and the Medicare Rights Center’s site (medicareinteractive.org). You can also contact your State Health Insurance Assistance Program or your state Department of Insurance.

Health Insurance for Adult Children? Not so fast…

In late April I blogged about the new health reform law that goes into effect Sept. 23 allowing parents to keep an adult child on their health plan until age 26. But, what many people – my wife and me included – did not realize is that the new rules allow employers to wait until the start of the next plan year (typically January 1) before allowing parents to add adult children to their coverage.

We discovered this while looking into a short-term insurance policy for our 24-year-old son who is impacted by this law. We were quite surprised to learn the law is different than we first thought.

The period of time during which the new graduate will not have health insurance could be longer than first anticipated. Check with your insurance company or the administrator of your insurance plan to see if they are offering coverage during this gap. Even before the new rules kick in, many insurers are allowing graduating students to remain on their parents’ policy, but if your graduate will be dropped upon graduation, be sure to get a short-term insurance policy for them to cover the gap. Health insurance for young adults is relatively inexpensive. A policy with a high deductible for someone in their 20s can cost less than $100 a month in Wisconsin.

Health Care Reform: Health Insurance for Adult Children to Age 26

Effective September 23, 2010, the Patient Protection and Affordable Care Act requires group health plans and health insurers (who offer group or individual policies which cover dependents) to cover adult children on a parent’s plan until the child’s 26th birthday.   This has been trumpeted recently in the press, but there are a couple of things you need to know.

The child does not have to be a student or a dependent for tax purposes.  The insurance is not taxable to the child.  The term “adult child” for purposes of this requirement means a son, daughter, stepson, stepdaughter, or legally adopted or eligible foster child of the employee or insured. If your adult child has a child, there is no requirement to make coverage available to your grandchild.  Until 2014, this is only applicable to children who are not otherwise eligible to enroll in an employer-sponsored health plan.  If they are eligible, then they must use that insurance plan.

That it doesn’t go into effect until September presents problems for families with spring graduates.  There will be a period of time during which the new graduate will not have health insurance (between graduation and September 23rd).  Check with your insurance company or the administrator of your insurance plan to see if they are offering coverage during this gap.  Some insurance companies and plans are offering coverage because they are realizing the hassle and cost of dropping the new graduate and then re-enrolling them on September 23.  If your graduate will be dropped upon graduation, then be sure to get a short-term insurance policy for them to cover the gap.  Don’t take the risk.

Many states have existing laws which require insured plans to provide similar or more expansive coverage of dependents.  This new federal law will not change them and they will continue to apply.  Wisconsin is not one of those states.

Enroll for Medicare Online

The Social Security Administration (SSA) has just launched a new service that allows people to enroll online for their Medicare benefits even if they are not yet ready to file for Social Security benefits. About a half million Americans enroll in Medicare each year without applying for Social Security benefits.

The new online Medicare application makes it easier for people to enroll in Medicare. It saves a trip to the Social Security office, and you can complete the application at your own pace at home. The SSA says it takes less than 10 minutes to complete.

You can use the online Medicare application if you are at least 64 years and 8 months old, do not want to start receiving Social Security benefits in the next four months, and live in the U.S. or one of its territories or commonwealths. The application guides you through a brief set of questions that will help you consider either filing for Social Security and Medicare benefits, or filing only for Medicare. There are links to more information for people who have questions.

To use the new online application, click here.

Baby Boomer Social Security Dilemma Revisited

If an opinion piece in the Sunday Milwaukee Journal Sentinel Crossroads section is any indication, there is going to be a lot of discussion of the subject of Social Security in the years to come. Not all will be good advice.

In the article (To collect or not to collect), Carolyn Kott Washburne shares her personal struggle with the decision about whether or not to start collecting Social Security benefits at age 66. The author had a friend do the math and determined she would have to live to age 80 to recoup what she would lose by not starting at age 66.

The decision seems shortsighted to me. By focusing solely on how long she will have to live to break even if she delays collecting until age 70 – at which time her checks will be almost 30 percent more than if she starts collecting at 66 – she omits pertinent factors in making a sound decision.

She does not consider what affect her decision will have on a spouse. Taking it earlier may decrease the amount her spouse can take, depending on his work history. And it appears she doesn’t expect to live to age 80 or beyond even though her life expectancy is 84. In fact, life expectancy statistics indicate that she has a 50 percent chance of surviving past age 84, and 33 percent chance of living beyond 93. Every day people spend a lot of cash on lottery tickets with much higher odds against them.

I am about to leave on vacation so you probably won’t be hearing from me until the end of next week. At that time I intend to pick up where I left off with my thoughts regarding long-term care insurance.

Continued Travails of a Baby Boomer

Like many, I get my health insurance through my spouse’s employer. It’s great coverage, but things really change when I turn 65 and am eligible for Medicare. I will no longer get coverage. That is not necessarily the result for all employer plans. You need to check the actual policy to be sure.

In any event, I have to make sure I have alternative insurance in place when I turn 65. I don’t want to be like a client I once had who also lost coverage at 65 and assumed that he was automatically enrolled in Medicare. He continued to work and did not apply for Social Security. About three months after turning 65, he had a major medical problem that cost tens of thousands of dollars. That’s when he found out that he did not have insurance and did not have Medicare. He was on the hook for all of it. Needless to say, it put a dent in his retirement plans.

Medicare has four components: Part A is hospital insurance, Part B is medical insurance (physicians, outpatient services, medical supplies and home health care), Part C is the alternative option of managed care, and Part D is the prescription drug benefit.

People are automatically enrolled in Part A when they apply for Social Security. For people like me who are not going to apply for Social Security until later, there is a separate Medicare application. I intend to get started on that application at least 90 days before I turn 65.

I am also going to get Part B. It’s not hard because everyone who gets Part A is automatically enrolled in Part B. You have to decline enrollment if you don’t want it. I am going to enroll in Part B (regardless of whether or not there is coverage under my wife’s insurance at that time) because there is a 10 percent penalty tacked on to the premiums for each 12 months of delay after age 65. I don’t want that additional cost later.

Besides Medicare, I am going to get long-term care insurance and a medigap policy. A medigap policy is health insurance sold by private insurance companies to fill the gaps in Medicare plan coverage. Medicare does not have any really effective benefits for long-term care, whether in the home, assisted living, or a nursing home. Medicare has gaps in coverage (some great names for them… donut holes). These policies will address those gaps.

We are all waiting anxiously for the outcome of the continuing healthcare debate in this country. It’s likely to go on for quite some time. But these are my conclusions for handling the baby boom problem, especially if you are not retiring at 65.

“It takes as much energy to wish as it does to plan.” – Eleanor Roosevelt

Travails of a Baby Boomer

I admit, begrudgingly, that I am a baby boomer and will turn 62 this year. Like many of my generation, I have no intention of retiring. Some are making that decision as a matter of necessity. Others, like me, are continuing to work because they like what they do.

In any case, age 62 (and then 65) requires some real important decisions.

The first decision is whether to start taking Social Security. This decision is laden with fear about the financial soundness of Social Security. You can start at 62. Right out of the box, many will say, “I am going to take Social Security now because Social Security is bankrupt and I want to get as much of my hard-earned money back as I can.” Understandable, but for some this may not make sense. There are other things to consider. If you take Social Security at 62, you get less. How much less? About 20 percent as compared to the amount received if you wait until your full retirement age.

And this reduction affects more than just you. If your spouse will receive Social Security based on your account at your death, then your spouse will also get less.

If you continue working like me, there is another consideration. There is an earnings penalty. If you earn more than a certain amount (It changes, but in 2009 it was $14,160), you lose $1 of every $2 above that amount. There is a different penalty in the year you would have been entitled to get full Social Security benefits. Once you reach full retirement age (66 for me), you can earn any amount without penalty. Besides the penalty, Social Security may be taxable to you. It’s complicated but it depends on your income.
I’ve decided to hold off on Social Security until age 69. The amount I will be entitled to will grow by eight percent between now and then. Plus, my income would wipe out my getting Social Security before the year I turn 68 anyway. And, taking it earlier would hurt my wife in terms of the amount she might receive after my death.

Next topic… Medicare.