Useful Medicare-Related Web Sites
As you help your clients transition to Medicare, here are some
useful Web sites to help you understand the various parts of
Medicare and the healthcare costs retirees are likely to incur in
retirement.
U.S. Government's Medicare Site
www.medicare.gov
There's a wealth of information available at Medicare.gov, which is
a blessing and a curse. It's not always easy to sort through or to
find what you need. Here are links to some of the most useful
features:
Find and compare Medicare Advantage Plans:
www.medicare.gov/MPPF/Include/DataSection/Questions/SearchOptions.asp
Find and compare Medigap Plans:
www.medicare.gov/MPPF/Include/DataSection/Questions/SearchOptions.asp
Find and compare prescription drug (Medicare Part D)
plans:
www.medicare.gov/MPDPF/Public/Include/DataSection/Questions/SearchOptions.asp
Medicare Information and Training
Materials
www.cms.hhs.gov/NationalMedicareTrainingProgram
If you want to learn more about the nuts and bolts of Medicare,
this part of the site contains documents, PowerPoint presentations,
webinars, webcasts, and videos on various Medicare features and
benefits.
Kaiser Family Foundation: State Health
Facts
www.statehealthfacts.org/comparecat.jsp?cat=6
This site providees useful data, broken down by state, of the
average spending by type of care per Medicare enrollee. The data is
a bit old—2004—but if you apply an inflation rate
to update the data and project for the future, you can approximate
how much in out-of-pocket expenses a client is likely to incur in a
year. The site provides, under the percentage growth in per
enrollee spending, inflation rates by state from 1994 to
2004.
Fidelity Health Care Expenses Cost
Calculator
https://powertools.fidelity.com/healthcost/intro.do
Asset manager Fidelity Investments provides a cost calculator to
help you figure out how much a client will need to save towards
retirement healthcare costs, including insurance premiums,
deductibles, co-pays, and other out-of-pocket costs, excluding
long-term care.
Goodcare Healthcare Planning Resources
www.goodcare.com/toolkit
Kathryn Votava's site has useful resources, including a healthcare
out-of-pocket expenses worksheet, Medicare benefits and
out-of-pocket cost worksheet, and links to government Medicare
guides and Medicare eligibility tools.
Medicare News Watch Cost Comparisons
www.medicarenewswatch.com/costcomparisons.html
If your clients are seeking information about the costs of specific
Medicare Advantage plans, this cost-comparison tool ranks plans by
state, by specific area with each state, by cost, and by health
status. There's a tremendous variety in cost for plans offering
essentially the same benefits, and like much else in Medicare,
premiums and benefits change frequently, so your clients should be
monitoring their Advantage plan costs to make sure they are in the
plan with the best cost-benefit structure for them.
CVS Pharmacy Medicare Part D Calculator
https://cvs.planprescriber.com/mapd/client/156894/web/index.jsp?groupid=156894
Because Part D plans change every year and your client's
medications may change as well, it's important to make sure they're
getting the best plan at the lowest cost. Encourage them to use
this calculator or the tools at Medicare.gov before the open
enrollment period so they can decide whether they need to switch
plans.
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Healthcare Reform and Financial Planning
by Christina Nelson
Fourteen different healthcare reform proposals were considered at
various levels of Congress in 2009; two bills remained as of this
writing in mid-January. The House bill, Affordable Health Care
for America Act (H.R. 3962), passed the House of
Representatives on November 16, 2009, and the Senate bill,
Patient Protection and Affordable Care Act (H.R. 3590),
passed the Senate on December 24, 2009. The House and Senate agreed
to informal negotiations, rather than the typical conference
committee process, to work more quickly through compromises on the
bill. The Senate bill is the vehicle for debate and
reconciliation.
Some parts of this extensive reform, found in both versions of the
bill, could affect financial planning clients as well as financial
planners themselves. This is by no means a comprehensive review of
what to expect when the new law passes, and effective dates for the
commencement of different sections of the bill vary. FPA will
continue to track the legislation as it progresses.
Summary
The Senate and House proposals require most U.S. citizens and legal residents to carry health insurance. The Senate bill proposes creating state-based health insurance exchanges?for individuals and for small businesses. The House version allows for state-based exchanges if they meet administration requirements, but also calls for a public health insurance option. Both bills impose new regulations on plans participating in the exchanges, such as guaranteed issue and renewability and no lifetime limits.
Employer Requirements and Tax Credits
In addition to requiring individuals to obtain insurance or pay a fine, employers are also penalized for not offering sufficient health insurance benefits to their employees. The Senate bill exempts employers with 50 or fewer employees, assesses fees for employers with more than 50 employees that do not offer coverage, and requires employers with 200 or more employees to automatically enroll employees. The House bill exempts employers with annual payroll less than $500,000, with slightly less exemption up to $750,000. For those not exempt, it requires employers cover 72.5 percent of single premiums and 65 percent of family premiums, or pay 8 percent of payroll into an exchange trust fund. The House bill also requires employers that offer coverage to automatically enroll employees without other coverage. Both bills provide tax credits to employers with fewer than 25 employees with average wages under $50,000 (Senate)/ $40,000 (House), for a limited period to help with transition.
Tax Changes
Both bills impose a tax on individuals without qualifying
coverage. The Senate version has a phased-in amount of $750 to
$2,250 per family, or 2 percent of household income; the House
version uses 2.5 percent of income above the threshold up to the
cost of the average national basic premium, and 5.4 percent for
individuals with income exceeding $500,000 and families exceeding
$1 million.
Both bills increase the tax on distributions from health savings
accounts (HSAs) that are not used for medical purposes from 10
percent to 20 percent. They also limit the amount of contributions
to medical-related flexible spending accounts to $2,500 per year,
and limit the reimbursement of over-the-counter medications to
those prescribed by a doctor.
The Senate bill increases the threshold for the itemized deduction
of non-reimbursed medical expenses to 10 percent of AGI (from 7.5
percent).
The Senate bill increases the Medicare Part A tax rate by 0.9
percent of wages (from 1.45 percent to 2.35 percent) for
individuals making more than $200,000 and married couples making
more than $250,000.
Medicare
Both bills raise the Part D initial coverage limit by $500 in
2010, to increase thereafter to eventually eliminate the
prescription drug "donut hole" gap in coverage. The bills include
provision of a 50 percent discount on brand-name prescriptions that
fall within the Part D coverage gap for certain individuals.
The Senate bill prohibits Medicare Advantage plans from creating
higher cost-sharing requirements for some Medicare benefits than
are required by the traditional fee-for-service program.
Long-Term Care
Both bills include the establishment of a national, voluntary
payroll deduction insurance program, focusing on community living
assistance services and supports (CLASS), providing certain
individuals not fewer than $50 a day for non-medical services, to
maintain community residence. All working adults will be
automatically enrolled, but can choose to opt out.
The Senate bill continues the emphasis on community/home care, with
additional federal subsidies/matches to states that enhance their
Medicaid programs that relate to this effort (such as Aging and
Disability Resource Center initiatives and nursing home diversions
to home and community-based services). Both bills require greater
transparency in the disclosure of information by nursing facilities
about their services, costs, and accountability.
Source: Kaiser Family Foundation, Side-by-Side Comparison of Major Health Care Reform Proposals, as of 1/13/10: www.kff.org/healthreform/sidebyside.cfm .
