What’s going on with the Medicare Part B premium?

The “Doc Fix” bill that passed this spring includes a provision to level the portion of Medicare Part B costs paid for by beneficiaries. This means the premium has to go up to cover the unfunded portion. According to an analysis by the Center for Retirement Research, quoted in this Fiscal Times article, up to 15 million beneficiaries could see their Part B premium increase from $104.90 to $159.30 a month. Couples could be paying more.

Click here to view the 2015 Annual Report from the boards that manage Medicare’s trust funds, and jump to pages 201-203 to view rate tables.

70 percent of the Medicare population gets their Part B premium taken out of their Social Security check. There is a “hold harmless” provision of the Social Security Act that does not allow Medicare beneficiaries to have any costs passed on to them if there is no Cost of Living Adjustment (COLA) to cover that increased premium. So, most beneficiaries’ premiums will remain stable at $104.90 this year.

Unfortunately for the 30 percent of Medicare beneficiaries who do not have their premium taken out of their Social Security check, it just so happens that if there is no COLA increase they are responsible for covering the entire amount of their premiums, which will be raised more than 50 percent to $159.30.

This also includes all of those on Medicaid that have their premium paid by the state as well as all individuals who have either chosen to delay taking Social Security or are not full retirement age yet (age 65-67).

Agents need to be proactive this AEP let their prospects and clients know what could happen to their medical costs so they’re prepared. My 82-year-old mother heard on the news that her premium was going to $159 and she was very worried about what was going to happen.

Most seniors do not know the details of the situation. As their agent, you can be the first one to educate them and earn their trust.

Don’t miss a thing this AEP. Subscribe to The Agent’s Advantage for more Medicare policy news that can affect your book of business. Call RB Insurance at (800) 997 3107 or email me to learn more about how Medicare Part B premiums may be changing for your prospects and clients this AEP.

Editor’s note: This post has been updated to include more sources and to clarify the premium increase.

My community marketing story: Special Olympics Utah

Community marketing was one of the easiest, but also one of the most challenging things I did when I was actively writing new business for my agency in Utah. As an agent selling Medicare Advantage, Medicare Supplements, Dual Special Needs and now final expense products for the past 10 years, I’ve found that being actively involved in my community was rewarding spiritually, but also in the sense that it helped me market my business.

Community marketing is a fairly simple concept. It means getting yourself in front of as many individuals who could use some advice about their health insurance coverage options as you can. The best part is connecting your business with your interest in giving back to your community can still be compliant with the Medicare Marketing Guidelines.

It’s fairly inexpensive to market yourself to the community. You may have to pay for a booth at informal events like senior expos or join a group, but it has a great return on the investment if your volunteering leads to even one sale. Community marketing requires a bigger investment of time and energy, so be forewarned: Staying with it for the long haul can be tough, and not always having the advice and guidance you give lead to a sale can be discouraging.

Members participate in the Unified Relay Across America in anticipation of the Special Olympics World Games, held July 25-August 2. Image courtesy of Special Olympics Utah’s Facebook page

Medicare and other health coverage options for children and young adults with physical and intellectual disabilities

I volunteered with special Olympics Utah when I first got started in the business after an appointment with a parent whose son had Down Syndrome. She told me there were a lot of parents like her who had no idea what programs were available for their children for health insurance other than Medicaid. In fact, Medicare serves individuals over the age of 18 who also have a physical or intellectual disability. One thing led to another, and that Saturday I showed up for an event was a timer for the 100-yard dash. I watched the kids and teens all afternoon, and they introduced me to their parents.

I went to several Special Olympics meetups in the next few weeks and was introduced each time as The Medicare Guy because I knew a lot about Medicare and Dual Special Needs Programs that I could share. Whenever I got a phone call about “Where can I take my daughter to get her teeth cleaned?” or “Where can I find hearing aids for my son?” I had the answer. I knew which DD case managers did the best job of helping their clients manage things like adult day care and how to apply for community grants to help them pay for the cost.

I met a lot of people and listened to many stories as I helped out with events. Sometimes I couldn’t do anything for them other than listen and help them figure out what the best fit for their health and financial situations were, but the fact that I helped them breathe a little easier means a lot to me.  I never walked away without asking people to refer their friends and family to me for their own questions.

There’s nothing better than saving someone $300 per month when they make $,1000 or less or helping a family find the right coverage for their special-needs children. You will be their friend for life, and they will tell all of your friends about you.

Call RB Insurance at (800) 997 3107 or email me to learn more about serving Medicare’s many members through community marketing. Click here to subscribe to our blog for more insights on how you can build a portfolio of products to market yourself and build your Medicare book of business.

Medicare enrollment is mostly a matter of time

I’m not about to tell you the senior market is set to explode as 10,000 Baby Boomers turn 65 every day in this country because I’m sure you’ve already gotten word by now. Instead, I want to remind experienced agents or those just getting started in this market that it’s mostly a matter of timing for seniors when it comes to getting the most out of Medicare.

You can strengthen your business as an agent by helping your prospective clients navigate the complex Medicare enrollment schedule. If seniors enroll without knowing about possible penalties, their decision could literally cost them for the rest of their lives.

Let your turning-65 clients know there may be penalties for not enrolling in Medicare Parts B and D.

Medicare Enrollment is a matter of time

Most seniors and agents aren’t aware Medicare enrollment is sensitive to time. In fact, the program will only let you know you are eligible to enroll if you are already on Social Security. If a senior waits until full retirement age to enroll in Medicare, he or she will probably owe a late enrollment penalty for the rest of his or her life. And as the full retirement age for Social Security inches past 65, the penalty increases, too.

If a senior does not sign up for Medicare during his or her predetermined seven-month open enrollment period, he or she has to pay a 10 percent annual penalty on the Medicare Part B premium along with a one-percent monthly penalty for Medicare Part D for every month without coverage. The good news is the penalty does not apply as long as you have some sort of credible coverage to give you a  special enrollment period to enroll into Medicare Part B with no penalty.

Not everything counts as credible coverage, either. Group coverage based on current employment does count, for example, but a group retiree plan does not. COBRA coverage doesn’t count either. Perhaps to add insult to injury, seniors have to wait until the general enrollment period (January 1 to March 31) to sign up for Medicare, then wait until July 1 to actually use the coverage.

I’ll give you an example of how these penalties might sneak up on seniors and agents:

I have an 83-year-old-client whose husband passed away on April 19. Her group retiree coverage ended on May 20. She told me that because her group retirement plan had great coverage, she never signed up for Part B. I was sure I heard wrong when she informed me she wasn’t eligible for a special enrollment period, but she was right.

When I called Social Security myself to find out why, I was told that a SEP is based on current employment — retiree coverage doesn’t count. My client has Medicare Part A, but won’t be able to enroll in Part B for over a year. I enrolled her into a Part D plan, and Medicare didn’t charge her a late enrollment penalty since she had credible coverage. But Medicare won’t budge on her Part B coverage. One worker even told her that she would have to pay the penalty for not signing up back in 1999, when she first turned 65!

Here is the real kicker though, the retiree group coverage was through the Federal Employees Blue Cross Blue Shield plan and they have provided no assistance whatsoever.

The best advice you can pass along to your clients is: Enroll in Medicare Parts A and B when you first turn 65. If you aren’t drawing Social Security, you can pay your part B premium on a quarterly basis. You will have to sign up within your seven-month open enrollment window. Part D has a stiffer penalty, but at least you have the same enrollment window.

As well all know, the good news with Part D is its Medicare enrollment period is October 15  to Dec 7 with coverage starting January 1.

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GOP takes on health care programs as it passes 2016 budget, announces candidates

We’re already seeing the first real thrusts of Republicans’ strategy to take back the White House as majorities in the House and Senate pass the first Congressional budget in over five years and half a dozen of the party’s presidential hopefuls announce their campaigns for the 2016 election. The GOP has the spotlight to further its case for balancing the federal budget in part by changing Medicare and Medicaid and possibly moving closer to delivering on its promise to repeal the Affordable Care Act (ACA).

The Republican budget aims to cut federal spending by $5.3 trillion in the next decade, reducing $4.2 trillion from benefit programs that include Medicare and Medicaid. However, the Hill reports that two dozen vulnerable Republican incumbents seem to be keeping a low profile when it comes to what specific changes they would make to the programs to match the nonbinding budget blueprint. They’re not only thinking how they will counter Democrats’ opposition to their bills, but also how they will retain their voter base in the next election.

Republicans in the House and Senate are using budget proceedings and the upcoming 2016 presidential campaign to push for changes to the country’s health care program as it aims to reduce federal spending. White House image courtesy of Flickr via Creative Commons.

The Hill also notes that Texas Sen. Ted Cruz and Kentucky Sen. Rand Paul, both running for president, voted against their party’s budget plan, while Florida Sen. Marco Rubio voted in line with his party weeks after announcing his campaign. Democrats predictably voted in total opposition to the budget in the House and Senate.

The Washington Post reports that under fast-track budget rules, Senate Democrats would not be able to filibuster Republicans’ attempt to vote on legislation calling for an end to ACA. However, President Obama would be sure to veto any budgetary action that would do away with his administration’s signature health care law. It’s assumed Republicans will do something to replace ACA to respond to voter concern over losing their subsidized health insurance as a result of their action.

Bloomberg News reports that Senate Republican leaders are considering legislation that would extend the ACA tax credits through 2016 in the event the Supreme Court invalidates the federal exchange later this summer.

Some Members of Congress are quietly discussing other entitlement changes related to Social Security. According to the New York Times, Paul Ryan (R–Wisc.) and Gov. Chris Christie (R –N.J.), who has said he’s thinking about running for president, have suggested “means testing” and an increase in the retirement age to solidify Social Security. An outlier in the conservative discussions regarding entitlements has been presidential candidate and former Arkansas Gov. Mike Huckabee, who promised he would “never rob seniors of what our government promised them and even forced them to pay for” in a video announcing his second run for the white House.

As we move closer and closer to the 2016 election, talk about the major health care programs and the possible political implications of action those words may inspire, however unlikely, should only get more interesting. Agents may want to pay attention to any upcoming bills dealing with Medicare, Medicaid, ACA and Social Security in case clients voice concern based on their own perusal of the daily news.

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