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Medicare Part B premium hike will be smaller than expected
Seniors caught a break Thursday when the Obama Administration announced that Medicare Part B premiums won’t rise as much as expected in 2012.
The premium for Part B – which funds doctor and other outpatient services – will be $99.90 in 2012, up just 3 percent compared with this year. And the Medicare Part B deductible will be $140, a decrease of $22 from 2011.
The official government 2012 Part B premium forecast had been $106.60 – an increase that would have taken a significant bite out of Social Security’s cost-of-living adjustment (COLA). Although Social Security beneficiaries will receive a 3.6 percent raise next year, the average beneficiary’s increase would have been shaved to 2.95 percent if the larger Part B increase had been implemented. Part B premiums are deducted from most seniors’ Social Security benefits.
Today’s news means that seniors receiving the average monthly Social Security benefit ($1,177) will see a net 3.3 percent gain in payments – just under $39 per month.
In 2010, the Part B premium jumped to $110.50 from $96.40, and it rose to $115.40 in 2011. The rate is determined partly by healthcare inflation — but also the number of seniors who actually are subject to higher premiums. By law, the premium cannot rise in any given year by a greater amount than the Social Security COLA – a “hold harmless” provision aimed at preventing Social Security payments from ever falling. About 75 percent of beneficiaries were exempted in this way from Part B premium increases in 2010 and 2011 – years in which no Social Security COLA was made.
Medicare enrollees cover 25 percent of projected Part B program costs; in 2010 and 2011, that projected cost was borne by a much more narrow base of beneficiaries. This year’s Social Security COLA means that beneficiaries’ portion of Part B cost will be spread across a much broader pool of seniors, resulting in the more modest premium hike.
The new premium will mean a decrease for seniors who enrolled in Medicare for the first time this year, and have been paying the $115.40 rate. It should also lead to decreases for high-income seniors, who were subject to the higher base premium, along with additional income-related surcharges.
Is pet insurance worth it?
Giovanna Dimperio’s dog Lola, a pit bull mix, has a knack for getting hurt. Her first big problem — eating part of a Frisbee — resulted in surgery. The $1,000 bill prompted Dimperio to look into pet insurance. More than two years after signing up for the $25 a month premiums, she says it paid off.
When Lola blew out a ligament in her leg chasing a ball, Dimperio was told the dog would need “extensive, intensive surgery.” The charge was $6,000. Dimperio of Madison, Wisconsin, ended up paying $1,000 out of pocket.
A few months later, the same injury happened when the dog was playing a game of hide-and-seek. This round of surgery cost $1,000. Her cost: $200.
“Overall, we were pretty sad that our dog was hurt, and that the operations would be so expensive — but we quickly realized how lucky we were to have this pet insurance,” Dimperio says. “I had figured when it came time to collect on the insurance policy, something wouldn’t have been covered, but it truly was taken care of. They didn’t increase the premium on Lola either after the accidents, which I had also thought would be the case.”
When it comes to pets, it’s hard for many people like Dimperio to see them as anything other than members of the family. But — unlike your kids — figuring out whether pet insurance is worth it can be tricky: It ultimately depends on who you are as a pet owner and how much you’re willing to pay out of pocket.
Minnesota veterinarian and author Dr. Justine Lee says pet owners have a variety of factors to consider before making a decision about getting insurance. The best value for the insurance is when something catastrophic happens, but she cautions that it is vital to understand what is excluded. That can include pre-existing conditions, which often also means any known congenital problems, including hip dysplasia that is common to a wide variety of dog breeds — including bulldogs, pugs, golden retrievers and German shepherds. Animals of mixed breeds can’t be excluded due to genetic issues attached to specific breeds, Lee says.
Owners have to also ask themselves if their pet could benefit from an MRI — which can cost $1,000 to $2,000 — and would be covered under certain plans. Would they go to great lengths to try to treat the animal if it meant another year with them? If the answer is no, then insurance might not be of value.
From what I understand traditional pet insurance doesn’t add up to much of a value once you take into consideration the monthly premiums and the fact that coverage is often limited. My sister-in-law had a vet practice and many of her clients complained of the headaches associated with traditional insurance, eventually opting for alternatives such as Pet Assure who offer simple discount plans. There may be others but I think they were the most popular. Anyone try them?
Some Medicare plans drop prices: time to shop is now
If you’re a senior on Medicare – or if you help out aging parents with their money matters – it’s time to get ready to shop. The annual enrollment period for Medicare prescription drug and Advantage managed care plans is about to begin, and it’s one of the best opportunities of the year for seniors to save money.
The new healthcare reform law is reshaping certain parts of the Medicare marketplace, for the most part in ways that benefit seniors. Although the law gradually reduced subsidies to Medicare Advantage — a change that critics derided as “slashing” Medicare– the Advantage and prescription drug markets are doing just fine. The number of plan offerings for 2012 are stable and average prices are steady or falling slightly.
Re-shopping your plan annually makes sense, especially Medicare Part D drug plans. Insurance companies often change their offerings year-to-year in ways that can increase drug costs by thousands of dollars, or make it more difficult to get certain drugs. At the same time, your drug needs may have changed since the last plan selection period in ways that make a plan less beneficial for you.
And this year, it’s important to get started on that process earlier than usual—because the enrollment period is earlier this year. The 2010 health reform law moved up the annual enrollment period by several weeks, starting this year. Enrollment will be open from Oct. 15 to Dec. 7—a sensible move intended to get this time-consuming chore away from the busy holiday season.
You’ve got two basic choices: traditional, fee-for-service Medicare alongside a stand-alone Part D prescription drug plan, or a privately managed Medicare Advantage all-in-one option (including hospitalization, outpatient services and prescription drugs).
You’re free to make as many changes as you want before Dec. 7; your changes take effect on Jan. 1. There’s also a so-called “dis-enrollment” period that runs from Jan. 1 to Feb. 14, that can be used by seniors who pick an Advantage plan but then change their minds. During that period, you can switch back to traditional Medicare but not to a different Advantage plan. And, if you do leave Advantage, you can add a stand-alone drug plan during that period.
Avalere Health, a health policy consulting firm, projects that average premiums for both prescription drug and Advantage plans will fall 4 percent for 2012. But the enhanced competition doesn’t mean prices are coming down across the board. Although some of the top 10 drug plans, which cover 77 percent of enrollees, are cutting premium prices, six are raising prices.
2012 Medicare choices come early: How not to overpay
Last year, Henry D’Aloisio needed to adjust his Medicare coverage to pay for doctor’s visits. He thought the changes would be simple, and that decades of administrative experience would have prepared him adequately for the paperwork and small print.
But it was much more time consuming and complex than he had been expecting — “the most daunting” task he’s faced in 50 years, he says.
Soon, many other Medicare beneficiaries will face similar challenges. The annual open enrollment period, during which people over 65 can sign up for Medicare or change details about their plans, begins on Oct. 15 and ends on Dec. 7. That’s roughly a month earlier than it’s been in previous years.
In D’Aloisio’s case, the 68-year-old retired teacher and administrator from Cranston, Rhode Island, had enrolled in Medicare Part A — the basic federal program that covers inpatient care in hospitals — when he was eligible for full retirement at 66. But during last year’s open enrollment period, he needed to add Part B benefits to cover doctors’ visits, outpatient care and other health services.
D’Aloisio says he felt overwhelmed by the switching process, which took three weeks, hours of phone calls and much time spent waiting for his email and voice messages to be answered. He says his eventual acceptance into Part B required a signed statement — a note — from a principal he had worked for in Rhode Island’s Department of Education, explaining how long he had worked there and that he was not covered by another state-sponsored healthcare program.
“When I first started looking into changing my plan, I figured, ‘This must be easy,’ ” D’Aloisio says, noting that he had worked as an administrator for decades before switching to teaching full time. Bureaucracies, in other words, didn’t faze him. “But for Medicare enrollment, I felt like I needed an attorney to get everything right.”
The confusion D’Aloisio experienced is common among Medicare enrollees and causes most of them to pay more than they have to, according to a recent study from PlanPrescriber, a company that provides free Medicare-related comparison tools and educational materials.
Patient Protection reform could mean higher healthcare costs
Of the endlessly debated provisions in the Patient Protection and Affordable Care Act (PPACA), the requirements for Medical Loss Ratios (MLRs) stand out for insurance companies because the requirements are designed to dictate how those companies pay their bills.
Until now, it’s been mostly unclear how those requirements will affect consumers. But a new study from the U.S. Government Accountability Office released last week sheds some light. And experts are weighing in.
First, some background: For every dollar taken in by insurance companies for health plans, those companies will now be required this year under the PPACA to spend either 80 or 85 cents – depending on the size of the plan; smaller group plans are held to the lower number – on costs related to healthcare.
In the past, insurance companies have traditionally spent less than that on healthcare costs and as much as 30 or 40 percent on administrative costs. The ratio of healthcare costs to administrative costs is called – you guessed it – the Medical Loss Ratio.
If companies do not meet the new MLR requirements under the PPACA, they are required to send their customers a refund to make up for the difference. This year is the first year that insurers will be held to the MLR requirements; the first set of insurer data is due in June 2012.
The goal of the MLR requirements is to make health insurance companies more efficient, says Dr. Timothy S. Jost, a law professor at Washington and Lee University who is a co-author of a textbook on healthcare law and a consumer representatives to the National Association of Insurance Commissioners, which helped to develop the MLR requirements.
The MLR requirements will “eliminate administrative costs, control profits and hopefully force these companies to provide better care to people,” he says.
There are great investments out there in Healthcare IT, you just have to find them,, here is one….
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Workers regret their health benefit choices: survey
Within a few weeks, employees across the U.S. will start to see their healthcare benefit packages for 2012: They’ll find higher premium costs, more coverage restrictions and myriad choices on items like deductibles, flexible spending account contributions, vision and dental coverage and more. If this year is like others, almost half of those employees will make decisions they later regret.
That’s the findings of a new survey conducted by Harris Interactive and due to be released tomorrow as part of the Aflac WorkForces Report. Reuters received the findings early.
The study reports that 77 percent of workers say they’ve made mistakes in their benefit decisions in the past, with 42 percent saying they waste money every year. The most common mistakes, according to Aflac, include choosing the wrong deductible, not taking advantage of their flexible spending account and passing on coverage — such as vision and dental care — that they later wish they had taken.
Making those decisions could be even more difficult this year, as employers are putting more employees into plans that have high deductibles and linked savings and spending accounts, and also raising the cost of premiums, especially for family members.
Employer costs will go up roughly 5.9 percent, and the majority of employers will pass those increases on to workers, according to the most recent 2011 Towers Watson Health Care Trend Survey. Roughly two-thirds of employers (66 percent) will increase employees’ share-of-premium contributions for single-only coverage for 2012, and 73 percent will increase them for dependent coverage. This “looks like a year when we will start to see costs go up primarily via increased premium contributions, with a higher proportion of the increase being borne by families,” says Randall Abbott, senior health care consultant at Towers Watson.
The takeaway for workers? If both spouses are working, it’s an especially good year to consider each spouse using his or her own healthcare plan and putting the kids on the one that’s best. “Employers are becoming increasingly focused on raising the cost for dependents to capture the added expense and to encourage working spouses to shift to their own employer’s plan,” says Abbott. “We also expect more use of spousal surcharges when they fail to do so.”
Workers also are usually better off if they use higher deductibles to keep their monthly premiums low, and take advantage of low-cost policies that cover regular care, such as dental or vision coverage. It’s almost impossible to predict healthcare costs for the coming year; accidents and illnesses are, by their very nature, usually surprises. But Aflac says that of those people who do contribute to flexible spending accounts, only 34 percent said they contribute the right amount. Some 43 percent said they didn’t contribute enough. Only 23 percent put too much in their flexible spending accounts.
The main reason people tend to under contribute to their FSA is that the amount must be declared in advance of spending, yet any unspent funds do not roll over to the following year.
An alternative is to have a Health Saving Account, which does allow unused funds to roll over.
How parents of multiples tackle financial challenges
Kevin O’Reilly spends his life dispensing financial planning advice. But he wasn’t exactly fiscally prepared when his wife Rebecca had triplets more than six years ago after spending close to $20,000 on fertility treatments. At the time she was earning a substantial salary as a project manager.
The plan was for his wife to return to work not too long after the delivery. That pretty much went out the window once they found out she was carrying triplets because of the extra care they required.
Although the loss of one income was the biggest financial challenge the couple faced, there were others.
“We had to buy a minivan because we needed a vehicle that could fit three car seats,” says Kevin, a Scottsdale, Arizona-based financial adviser. “That set us back about $30,000. Then there’s the cost of diapers, formula and everything else you need.” While they have set up college savings plans for each of the children, the family has had to cut back substantially on retirement plan contributions.
As the media continues to follow Kate Gosselin and Nadya Suleman, thousands of families with twins and triplets quietly struggle with unique financial issues that most singleton parents don’t face, or encounter more gradually. With the use of fertility drugs more than doubling the rate of multiple births since 1980s, many families now grapple with these issues.
In the scheme of things having to buy two or more of everything at once or the absence of hand-me-downs may seem like fairly minor inconveniences. But adding multiples children to the mix can have more serious financial consequences when premature deliveries and related health complications, which are more common with multiple births, lead to exorbitant hospital bills.
Research shows that the financial stress of multiples takes a real toll on families, according to a study released last year from the University of Birmingham in the UK. It found that 62 percent of multiple birth families reported being financially worse off after their babies were born, compared to 40 percent of other parents. Families with a multiples birth were more than twice as likely as others to categorize their financial problems as “quite difficult.”
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Shopping for health insurance? 5 tips on how to get it right
When Ronna Wisbrod, a real estate broker and personal organizer, returned to the Chicago area last year, she needed to figure out new health insurance. Now 57, she knew she had to have insurance, but as she set up her own business, Organization by Ronna, she also wanted to keep costs down.
“I’m at a rebuilding stage and in the process of rebuilding my budget, [which] is very tight,” Wisbrod says.
So, she looked around for insurance and spoke with an insurance broker and decided to go with a high-deductible plan that she figures will cover her in case of a medical emergency. That plan, from Assurant Health, has a $5,000 deductible, but costs a very reasonable $380 a month. “I had a $2,800 deductible before, and I didn’t satisfy it because I don’t go to the doctor that often,” she says. “So what does it matter if the deductible is $5,000? It lowers my premium.”
Shopping for insurance is all about figuring out those trade-offs of coverage and cost and finding the plan that works best for you. The variations in insurance plans are mindboggling and few people bother to read the fine print till they run into trouble. Making matters more complex, there are vast differences between states, some of which permit medical underwriting (which means the insurer can reject you from a policy or raise your premium based on your medical history) and those that do not (which means the premiums will typically be higher overall to cover the risk).
To make sense of what works for you, you’ll need to understand how your own medical spending patterns interact with the details of the different plans for which you qualify. Whatever you choose, if you’ve been covered by an employer group plan before, prepare for sticker shock. Here’s how to get through the process:
1. Understand your options If you’ve recently left your job or been laid off, COBRA is the simplest option. It allows you to stay on your employer’s plan. But because it requires you to pay the full cost, it may not be the least expensive. That’s because many employers subsidize the premiums for employees who never see the full bill. If you’re healthy and see the doctor rarely, you may be able to find a high-deductible plan with less coverage at a lower cost.
On the other hand, if you have medical issues, COBRA may be a better deal overall. “The central issue of COBRA, which is critical for people to examine if they or their family have a pre-existing condition, is that you don’t have to worry about qualifying for it,” says Martin Rosen, co-founder of Health Advocate and co-author of The Healthcare Survival Guide.
I don’t agree that COBRA is the simplest option. COBRA has been amended 12 times over 25 years it’s been around. There is widespread confusion about who qualifies, notices, and deadlines. Also COBRA premiums are not usually tax deductible. And the COBRA subsidy that was paid out for 15 months ends next week.
For-profit or not: What to consider when choosing a nursing home
As a state-appointed consumer advocate overseeing complaints about Florida’s long-term care industry, Brian Lee became curious about corporate ownership earlier this year. He sent nearly 700 letters to every nursing home in the state requesting information about which entities owned which facilities.
It wasn’t idle curiosity.
Numerous investigative reports over the past decade have found that for-profit nursing homes tend to under-perform when compared to non-profit facilities.
The most recent of these, a U.S. Government Accountability Office study released last month, looked not only at for-profit homes – many of which are operated by publicly-traded companies – but also at nursing homes operated by private investment firms. Private investment firms are not publicly traded; they are less financially transparent than publicly traded or nonprofit firms.
The GAO study reinforced that for-profit nursing homes – which account for more than two-thirds of nursing homes nationwide – had more frequent and serious deficiencies than non-profit homes. And while nursing homes tended not to perform any worse in cases when a private investment firm took over operations from a non-profit or otherwise for-profit firm, private investment firms did tend to spend more money “to increase their homes’ attractiveness to higher paying residents” without doing much to improve staffing or services.
Lee’s letters were sent to find out what many folks with aging loved ones want to know: Who’s really in charge of particular nursing facilities? And does “attractiveness to higher-paying residents” really mean clients will receive better care?
Lee didn’t receive answers. In fact he was asked to resign from his job. And according to a lawsuit he recently filed, Florida Gov. Rick Scott became concerned about Lee’s efforts to keep for-profit nursing homes accountable.
Self-employed? How to find disability insurance
If you’re self-employed and work out of your home, it’s probably occurred to you that you ought to have long-term disability insurance. If you’ve mentioned this to your insurance agent, they’ve probably told you it’s a good idea and not a problem.
But, chances are when you looked into it, it has, indeed, been a problem.
Policies seem expensive and unlikely to replace the income you actually need — if you can get coverage at all.
Here is what you need to know to get the coverage you need at the best price possible.
How much insurance do you need? The point of long-term disability insurance is to replace your income if you’re disabled and unable to work for an extended period of time — maybe a few years or maybe until you qualify for retirement benefits at age 65.
The tricky part is that policies for self-employed workers rarely replace gross revenue, the total amount you bring in. More likely, it will replace the portion of your income left after you take out your business costs, which is the amount the insurance company believes you live on, says Neil Palache, a financial coach in Westlake Village, California, who worked as an insurance broker for many years. To get an idea of what this would be, look at the portion of your income you pay income taxes on.
If there are expenses related to your business that you’ll want to continue covering while you’re disabled — say a license you want to keep current if you hope to get back to your profession eventually— Palache suggests adding a Business Operating Expenses policy to your LTD policy.
Yes. And the most serious question you ought to ask yourself is why they would ever pay you anything. And if they possibly could pay a claim. Insurance companies are no more reliable than banks and they themselves are not insured. What is more, insurance companies can be hijacked by crooks just as banks and investment funds can.
You are paying to get taken care of when you are weak and unlikely to be a threat to anyone. Look around you. What is happening to the weak and the needy? Would you voluntarily pay to be treated that way?
Ogerman, no need to believe anything but the NEWS. This is just another hater chain mail. If it WERE true, don’t you think you would have heard about it in the 20 debates between the Republican candidates? Don’t you think you would have heard it on the news? You bet you would.
Of course, if you get your “official” news from emails, then believe away. Oh, and your IRS payment was rejected, send them you mother’s maiden name, your bank account number and pin.