health insurance – Retirement Risk Advisors

13May

An Overview of the Enrollment Periods for Medicare

BlogMay 13, 2023

The program offers a range of benefits to help individuals manage their health care expenses, including hospital insurance (Part A), medical insurance (Part B), prescription drug coverage (Part D), and Medicare Advantage (Part C). However, to access these benefits, individuals must enroll in Medicare during specific enrollment periods.

There are various enrollment periods for Medicare, each with its own set of rules and eligibility criteria. Here is a breakdown of the different enrollment periods and what you need to know about each:

Initial Enrollment Period (IEP)

The Initial Enrollment Period is the first opportunity for eligible individuals to enroll in Medicare. The IEP lasts for seven months and begins three months before the month of an individual’s 65th birthday and ends three months after their 65th birthday. If an individual is already receiving Social Security benefits, they will be automatically enrolled in Medicare Parts A and B during their IEP.

General Enrollment Period (GEP)

The General Enrollment Period is for individuals who missed their IEP and did not sign up for Medicare during a Special Enrollment Period (SEP). The GEP runs from January 1st to March 31st every year, and coverage begins on July 1st. However, individuals who enroll during the GEP may be subject to late enrollment penalties.

Special Enrollment Period (SEP) The Special Enrollment Period is for individuals who experience certain qualifying life events, such as moving to a new area or losing employer-sponsored health insurance. The SEP allows these individuals to enroll in Medicare outside of the standard enrollment periods. The length of the SEP and the eligibility criteria vary depending on the qualifying life event.

Annual Enrollment Period (AEP)

The Annual Enrollment Period, also known as the Open Enrollment Period, is an opportunity for individuals to make changes to their Medicare coverage. The AEP runs from October 15th to December 7th every year, and changes made during this period take effect on January 1st of the following year. During the AEP, individuals can switch from Original Medicare to Medicare Advantage or make changes to their Medicare Advantage or Part D plan.

Medicare Advantage Open Enrollment Period (OEP)

The Medicare Advantage Open Enrollment Period allows individuals who are already enrolled in a Medicare Advantage plan to switch to a different Medicare Advantage plan or return to Original Medicare. The OEP runs from January 1st to March 31st every year.

Medicare Supplement Enrollment Period

Medicare Supplement plans, also known as Medigap plans, help individuals cover the out-of-pocket costs associated with Original Medicare. The Medicare Supplement Enrollment Period is a six-month window that begins on the first day of the month in which an individual turns 65 and is enrolled in Medicare Part B. During this period, individuals can enroll in a Medicare Supplement plan without undergoing medical underwriting.

30Mar

Not To Scare, but with Age Comes Long-Term Care

BlogMarch 30, 2023

As people are living longer, the need for long-term care in retirement is becoming increasingly important. Long-term care refers to the assistance that individuals may require with activities of daily living, such as bathing, dressing, and eating. In this article, we will explore the increasing need for long-term care in retirement and what individuals can do to prepare for this potential expense.

Why the Need for Long-Term Care is Increasing

The need for long-term care in retirement is increasing for several reasons:

Longer life expectancy: As people live longer, the likelihood of requiring long-term care increases.
Age-related health issues: As individuals age, they may experience a range of health issues that can impact their ability to perform activities of daily living.
Rising healthcare costs: Healthcare costs continue to rise, and long-term care expenses can be particularly expensive.
Changes in family structure: Changes in family structure, such as a decrease in the number of family members available to provide care, can make long-term care an increasingly important consideration.

The Costs of Long-Term Care

Long-term care can be expensive, and it is important to understand the potential costs associated with this type of care. The cost of long-term care can vary depending on several factors, including the type of care required, the geographic location, and the length of care required. According to a recent survey by Genworth, the national median cost of long-term care ranges from $4,576 per month for a home health aide to $8,821 per month for a private room in a nursing home.

Preparing for Long-Term Care

There are several steps that individuals can take to prepare for the potential need for long-term care in retirement:

Long-term care insurance: Long-term care insurance can help to cover the costs of long-term care, and can be a good option for individuals looking to protect their retirement savings from potential long-term care expenses.
Health savings accounts (HSAs): HSAs can be used to save for future healthcare expenses, including long-term care.
Lifestyle modifications: Making healthy lifestyle choices can help to reduce the risk of age-related health issues that may require long-term care.
Retirement planning: Including the potential costs of long-term care in retirement planning can help to ensure that individuals are financially prepared for this potential expense.

The need for long-term care in retirement is increasing, and it is important for individuals to understand the potential costs associated with this type of care. By taking steps to prepare for long-term care, such as purchasing long-term care insurance, utilizing health savings accounts, and including the potential costs of long-term care in retirement planning, individuals can help to ensure that they are financially prepared for this potential expense.

07May

Quick Check: How Ready for Retirement are You?

Podcast BlogMay 7, 2022

Retirement readiness is not an overnight success story. It is not a simple formula either. It takes dedication, hard work, and good strategies. Why? Because it is simply not just retirement savings. Below is a quick check to assess your readiness for your golden years whether you are 5-10 or even a year away from retirement!

Financial Wellbeing

As the biggest stressor of retirement, financial wellbeing is budgeting, savings, income streams, and planning. Here are some categories to review for your retirement planning

Housing, including utilities and maintenance
Healthcare costs (covered later)
Daily living: food, transportation
Entertainment and travel

Having an idea of where you stand now will help determine how much you should have for retirement assets.

Emergency Fund

Planning for the unexpected helps immensely when it comes to retirement readiness. When there is financial uncertainty, the emergency fund is the perfect security blanket. Advised to be kept separate from normal savings, the emergency fund should have roughly 3-6 months of living costs.

Debt Elimination

The less debt you need to pay in retirement, the better off you will be. Retires are often relying on fixed income streams, so beginning a repayment strategy now while you are still working would be ideal. If you can, paying down debts with higher interest rates would save a lot of money for you down the road.

Retirement Needs
As a CPA, knowing what you need and how you want to life your retirement helps set realistic goals and plans. This should include where you want to reside, what age you plan to retire, and even length of retirement. With longevity increasing by the day, it is estimated that retirement will last between 20-40 years for many. While evaluating your needs, this is a great time to also compose a timeline for when certain benefits/income streams begin.

Healthcare & Insurance

Health insurance is a major factor for retirement, and unfortunately will be the biggest expense you will face in retirement. Not including long-term care, a newly retired couple will need a minimum of $300,000 for medical expenses alone. This number is predicted to increase yearly, too. Moreover, should you have a long-term care event, without coverage, you are looking at approximately another $140,000 annually.

Now part of health care costs is insurance. Medicare only covers so much, and that depends on the plans you go with. Other than Part A each Part or supplemental plan has a premium. You may need prescription drug coverage, which is where Part D of Medicare may help. Consider a supplemental plan under Part C. Do further research into what a private health insurance company may offer so you know what options you have and are able to get the best price for what you need. Long-term care insurance is another premium monthly, but it would help a lot should you need it. There are some options where you may add a rider to a life insurance policy to help cover the costs long-term care would entail.

29Dec

Medicare Mistakes That Could Uproot Your Retirement

BlogDecember 29, 2021

Medicare is often the core health coverage for seniors during retirement. Knowing the ins and outs of the program is essential for your retirement finances. Following are some facts that may cause risks to arise in your retirement if not handled correctly.

Enrollment is not entirely free. Each part is broken down as follows:

Part A is typically free for seniors but has requirements for enrollment. This part is automatic and covers treatment in medical facilities.

Part B costs and covers outpatient care and diagnostics. Much like Part A, Part B is automatic. Keeping premiums paid should be a priority in retirement.

Part C is Medicare Advantage, providing alternatives within the private sector. Plans vary based on state and individual needs.

Part D covers drugs prescriptions and has premiums.

However, with all health insurances, Medicare has deductibles, coinsurance, and copays that will impact your budget.

Be aware that price is not locked in the moment you begin Medicare coverage, Parts B & D will change yearly. This has the potential to affect your Social Security benefits. If you are signed up for monthly benefits, if Part B increases it will be deducted from your monthly check automatically. Now, you will not receive a lower monthly payment than you have if Part B increases—the cost adjustment is made with Social Security adjusts for cost-of-living.

Unfortunately, Medicare is only health care coverage—dental and eye are not included. Another common service/product not covered is hearing aids. If you would like that extra coverage, Part C, the private-sector market, is where you can group Part A, B & D together plus purchase plans with other coverage such as eye and dental. Otherwise, the services not covered are marked as out-of-pocket and may require you to use funds from an HSA or other retirement funds.

A huge factor with Medicare is enrollment timing. You have a seven-month span to enroll—three months before your 65^th birthday to three months after that month. If you are unable to enroll during the original window, late penalties will be assessed to your Part B and Part D premiums indefinitely.

Having the information needed for success is important so you can make the right decisions for your retirement and health care needs. Medicare is a complicated government program that impacts your retirement head-on—sometimes even before you retire fully.