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Buying long-term care insurance is one way to protect against the high cost of long-term care. However, this type of insurance may not be for everyone, so consider all your options.
Long-term care – care in a nursing home or at home -- may be paid for in four main ways:
Out-of-pocket. If you have sufficient resources, you can pay for your long-term care needs with money you have saved.
Medicare. Medicare covers short-term nursing home stays after an illness or injury that requires hospitalization. Medicare covers up to 100 days of "skilled nursing care" per illness.
Medicaid. If you have limited resources, Medicaid will pay for nursing home care. In order to be eligible for Medicaid benefits a nursing home resident may have no more than $2,000 in "countable" assets (it may be higher in some states).
Long-term care insurance. With long-term care insurance, you pay monthly premiums to buy a policy that pays your long-term care costs if you are admitted to a nursing home or need home care (depending on the policy).
Determining whether you need long-term care insurance depends, in part, on your financial situation. The cost of a long-term care insurance policy varies considerably, depending on your age when you purchase the policy, the benefit period, and the level of benefits, among other things, but the premiums can be expensive. Therefore, if you have the resources to self-insure your long-term care and still have money left over, you likely don’t need to buy a long-term care policy. On the other hand, if you cannot afford to pay monthly long-term care premiums, you will likely be able to qualify for Medicaid.
Another factor to consider is your family’s health history. Most nursing home stays are short-term and paid for by Medicare. A common reason for needing extended long-term care is dementia. If you know you have a family history of Alzheimer’s disease, for example, it may make more sense to buy insurance.
Of course, we never really know what the future may bring. Long-term care insurance is like any insurance policy: we don’t know if we will ever need it. In general, long-term care insurance is something to consider if:
you have the resources to pay the premiums, even in retirement,
you want to preserve your estate for your heirs, and
Medicare Advantage plans are run by private insurers, unlike Original Medicare, which the federal government operates, although the medical providers are private. The government pays Medicare Advantage plans a fixed monthly fee to provide services to each Medicare beneficiary under their care. The plans often look attractive because they offer the same basic coverage as original Medicare plus some additional benefits and services that Original Medicare doesn't offer.
To compare Advantage plans, go to the Medicare Plan Finder at Medicare.gov. When deciding whether a Medicare Advantage plan is right for you, the following are the main factors to consider:
Cost. Since Medicare Advantage plans are offered by private insurers, the cost of the plan varies depending on where you live. While Medicare Advantage plans usually have lower premiums than paying for Original Medicare plus a Medigap plan, they can have higher deductibles and co-pays in certain circumstances, so you need to take those into account when calculating the cost of each plan. Medicare Advantage plans do have a cap on out-of-pocket costs, while Original Medicare does not. Check the annual maximum out-of-pocket costs for the plan. If you have a high level of health costs, a low out-of-pocket maximum may be the best option.
Coverage. What coverage does the plan offer? Medicare Advantage plans must cover everything that Original Medicare covers, but some plans offer additional benefits, such as dental, hearing, and vision. Plans may require your doctor to get approval for certain procedures. If the plan administrators disagree with your physician that a procedure is medically necessary, the plan may refuse to pay for it.You will want to find out how the plan is about approving treatments, referring patients to specialists or allowing patients to remain in the hospital if they are not ready to leave. You may want to check with your doctor to find out their experience with the plan and whether the plan frequently overrules the doctor.
Doctors. Original Medicare does not have any restrictions on which doctor you use, but Medicare Advantage plans are HMOs and PPOs, meaning that not every doctor accepts the insurance. With an HMO, if you visit a doctor outside of the network, you will likely have to pay out of pocket (except in an emergency). With a PPO, you can usually see any doctor you want, but you will pay less for an in-network doctor. You will want to check if your doctor and hospital are part of the plan’s network. The best way to do this is to call your doctor’s office to confirm.
Prescription drugs. Most Medicare Advantage plans include prescription drug coverage, so you should check to make sure the plan covers all the medications you take. You should also check if you need any special authorizations for any of your medications or if there any limits on the amount you can get. Other questions include whether your pharmacy is a preferred provider and whether you can get prescriptions by mail.
Quality of care. The Medicare Plan Finder includes a rating system that measures how well the plan manages health screenings and chronic conditions as well as how many customer complaints it receives, among other things. The ratings aren’t perfect, but they can give you an idea of plan’s quality.
Medicare premiums are set to rise a modest amount next year, but still cut into any Social Security gains. The basic monthly premium will increase $3.90, from $144.60 a month to $148.50.
The Centers for Medicare and Medicaid Services (CMS) announced the premium and other Medicare cost increases on November 6, 2020. The hike could have been much worse due to rising costs during the coronavirus pandemic, but the bipartisan budget bill passed in October capped the increase. While the majority of beneficiaries will pay the added amount, a "hold harmless" rule prevents Medicare recipients' premiums from increasing more than Social Security benefits, which are going up only 1.3 percent in 2021. This “hold harmless” provision does not apply to Medicare beneficiaries who are enrolled in Medicare but who are not yet receiving Social Security, new Medicare beneficiaries, seniors earning more than $88,000 a year, and "dual eligibles" who get both Medicare and Medicaid benefits.
Meanwhile, the Part B deductible will rise from $198 to $203 in 2021, while the Part A deductible will go up by $76, to $1,484. For beneficiaries receiving skilled care in a nursing home, Medicare's coinsurance for days 21-100 will increase from $176 to $185.50. Medicare coverage ends after day 100.
Here are all the new Medicare payment figures: • Part B premium: $148.50 (was $144.60) • Part B deductible: $203 (was $198) • Part A deductible: $1,484 (was $1,408) • Co-payment for hospital stay days 61-90: $371/day (was $352) • Co-payment for hospital stay days 91 and beyond: $742/day (was $704) • Skilled nursing facility co-payment, days 21-100: $185.50/day (was $176)
So-called "Medigap" policies can cover some of these costs.
Premiums for higher-income beneficiaries ($88,000 and above) are as follows:
Individuals with annual incomes between $88,000 and $111,000 and married couples with annual incomes between $176,000 and $222,000 will pay a monthly premium of $207.90.
Individuals with annual incomes between $111,000 and $138,000 and married couples with annual incomes between $222,000 and $276,000 will pay a monthly premium of $297.
Individuals with annual incomes between $138,000 and $165,000 and married couples with annual incomes between $276,000 and $330,000 will pay a monthly premium of $386.10.
Individuals with annual incomes above $165,000 and less than $500,000 and married couples with annual incomes above $330,000 and less than $750,000 will pay a monthly premium of $475.20.
Individuals with annual incomes above $500,000 and married couples with annual incomes above $750,000 will pay a monthly premium of $504.90.
Rates differ for beneficiaries who are married but file a separate tax return from their spouse. Those with incomes greater than $88,000 and less than $412,000 will pay a monthly premium of $475.20. Those with incomes greater than $412,000 will pay a monthly premium of $504.90.
The Social Security Administration uses the income reported two years ago to determine a Part B beneficiary's premium. So the income reported on a beneficiary's 2019 tax return is used to determine whether the beneficiary must pay a higher monthly Part B premium in 2021. Income is calculated by taking a beneficiary's adjusted gross income and adding back in some normally excluded income, such as tax-exempt interest, U.S. savings bond interest used to pay tuition, and certain income from foreign sources. This is called modified adjusted gross income (MAGI). If a beneficiary's MAGI decreased significantly in the past two years, she may request that information from more recent years be used to calculate the premium. You can also request to reverse a surcharge if your income changes.
Those who enroll in Medicare Advantage plans may have different cost-sharing arrangements. CMS estimates that the Medicare Advantage average monthly premium will decrease by 11 percent in 2021, from an average of $23.63 in 2020 to $21 in 2021.
For Medicare’s press release announcing the new premium, co-payment and deductible amounts, click here.
The Social Security Administration has announced a 1.3 percent rise in benefits in 2021, an increase even smaller than last year’s.
Cost-of-living increases are tied to the consumer price index, and a modest upturn in inflation rates and gas prices means Social Security recipients will get only a slight boost in 2021. The 1.3 percent increase is similar to last year’s 1.6 percent increase, but much smaller than the 2.8 percent rise in 2019. The average monthly benefit of $1,523 in 2020 will go up by $20 a month to $1,543 a month for an individual beneficiary, or $240 yearly.
The cost-of-living change also affects the maximum amount of earnings subject to the Social Security tax, which will grow from $137,700 to $142,800.
For 2021, the monthly federal Supplemental Security Income (SSI) payment standard will be $794 for an individual and $1,191 for a couple.
Some years a small increase means that additional income will be entirely eaten up by higher Medicare Part B premiums. But this year, that shouldn’t be the case. The standard monthly premium for Medicare Part B enrollees is forecast to rise $8.70 a month to $153.30. However, due to the coronavirus pandemic, under the terms of the short-term spending bill the increase for 2021 will be limited to 25 percent of what it would otherwise have been.
Most beneficiaries will be able to find out their specific cost-of-living adjustment online by logging on to my Social Security in December 2020. While you can still receive your increase notice by mail, you have the option to choose whether to receive your notice online instead of on paper.
For more on the 2021 Social Security benefit levels, click here.
Medicare's Open Enrollment Period, during which you can freely enroll in or switch plans, runs from October 15 to December 7. Now is the time to start shopping around to see whether your current choices are still the best ones for you.
During this period you may enroll in a Medicare Part D (prescription drug) plan or, if you currently have a plan, you may change plans. In addition, during the seven-week period you can return to traditional Medicare (Parts A and B) from a Medicare Advantage (Part C, managed care) plan, enroll in a Medicare Advantage plan, or change Advantage plans.
Beneficiaries can go to www.medicare.gov or call 1-800-MEDICARE (1-800-633-4227) to make changes in their Medicare prescription drug and health plan coverage.
According to the New York Times, few Medicare beneficiaries take advantage of Open Enrollment, but of those who do, nearly half cut their premiums by at least 5 percent. Even beneficiaries who have been satisfied with their plans in 2020 should review their choices for 2021, as both premiums and plan coverage can fluctuate from year to year. Are the doctors you use still part of your Medicare Advantage plan’s provider network? Have any of the prescriptions you take been dropped from your prescription plan’s list of covered drugs (the “formulary”)? Could you save money with the same coverage by switching to a different plan?
For answers to questions like these, carefully look over the plan's "Annual Notice of Change" letter to you. Prescription drug plans can change their premiums, deductibles, the list of drugs they cover, and their plan rules for covered drugs, exceptions, and appeals. Medicare Advantage plans can change their benefit packages, as well as their provider networks.
Remember that fraud perpetrators will inevitably use the Open Enrollment Period to try to gain access to individuals' personal financial information. Medicare beneficiaries should never give their personal information out to anyone making unsolicited phone calls selling Medicare-related products or services or showing up on their doorstep uninvited. If you think you've been a victim of fraud or identity theft, contact Medicare.
Here are more resources for navigating the Open Enrollment Period:
If you plan to move states, can you take your Medicare or Medicaid plans with you? The answer depends on whether you have original Medicare, Medicare Advantage, or Medicaid.
Medicare If you have original Medicare (Plans A and B), you can move anywhere in the country and you should still be covered. Medicare is a federal program, run by the federal government, so it doesn’t matter what state you are in as long as your provider accepts Medicare. Your Medigap plan should also continue to cover you in the new state, but your premiums may change when you move. The exception is if you move to Massachusetts, Minnesota, or Wisconsin because those states have their own specific Medigap plans.
Both Medicare Part D (prescription drug coverage) and Medicare Advantage plans have defined service areas, which may or may not cover more than one state. If you have Part D or Medicare Advantage, you will need to determine if your new address falls within the plan’s service area. When you move to a new service area, you have a special enrollment period in which to change plans outside of the annual open enrollment period (which runs October 15th through December 7th). If you tell your current plan before you move, your special enrollment period begins the month before you move and continues for two full months after you move. If you tell your plan after you move, your chance to switch plans begins the month you tell your plan, plus two more full months.
Medicaid Medicaid is a joint federal and state program, with each state having its own eligibility rules. This means you cannot keep your Medicaid plan when you move to a new state. Medicaid eligibility depends on your income, your assets, and the level of care you need. If you have Medicaid and are planning to move, you should contact the Medicaid office in the state to which you are moving to find out the eligibility requirements in that state. Before you can apply for benefits in the new state, you need to cancel your benefits in the old state. You should file an application in the new state as soon as possible. Usually, if you qualify for benefits, the benefits will be retroactive up to three months before the date you applied. If you end up having to pay for any health care services out of pocket while you are waiting for your application to be approved, save the receipts since you may be able to get reimbursed.
Choosing a Nursing Home for a loved one is a difficult decision and it can only be made more confusing by the various rating systems. A recent study found that using both Medicare’s Nursing Home Compare site and user reviews can help with the decision making.
The official Medicare website includes a nursing home rating system. Nursing Home Compare offers up to five-star ratings of nursing homes based on health inspections, staffing, and quality measures. However, Medicare’s rating system is far from perfect. The staff level and quality statistics ratings are based largely on self-reported data that the government does not verify. The ratings also do not take into account state fines and enforcement data or consumer complaints to state agencies. Nursing homes have learned how to game the system to improve their ratings.
While Nursing Home Compare doesn’t include consumer feedback, Yelp and other online platforms like Facebook, Google, and Caring.com allow users to review individual nursing homes. These user reviews are highly subjective, and it can be difficult to judge their legitimacy. These reviews are not usually taken seriously--for example, consumer guides to finding a nursing home do not usually suggest that consumers consult online reviews. (It should be noted, however, that Caring.com goes to great lengths to ensure the integrity of its reviews, including having senior care experts read every submission before publication.)
In order to better understand what consumers were saying about nursing homes online, researchers at the University of Southern California evaluated 264 Yelp reviews and grouped them into categories. The researchers found that consumers rate different aspects of nursing home care than does the official rating system. User reviews were more emotional and more likely to focus on staff attitudes and responsiveness rather than on the quality of health care.
The researchers concluded that user reviews can be used in conjunction with the Nursing Home Compare site to paint a fuller picture of life at the nursing home because they present complementary information. According to the study, online reviews shouldn’t be dismissed because they “directly capture the voices of residents and family members, precisely the kind of information [nursing homes] and their consumers need to hear and may want to act on, if resident-directed care is to be achieved.”
Yelp has gone a step further than other consumer review sites and has teamed up with the investigative news organization, ProPublica, to provide users with additional information. ProPublica's Nursing Home Inspect site, allows users to compare nursing homes based on federal data. Yelp users viewing a nursing home review page see a ProPublica box that provides information on the nursing home’s deficiencies and fines.
With the coronavirus pandemic responsible for more than a hundred thousand deaths and disrupting life across the United States, the only way for the country to return to normal is an effective vaccine. When a vaccine is available, Medicare will cover the cost.
Medicare covers vaccines in a variety of ways, depending on the vaccine. It may be through Medicare Part B, Medicare Part D, or a Medicare Advantage plan if you are enrolled in one. Part B covers vaccines only for certain illnesses: flu, pneumonia, and Hepatitis B (if you are at medium or high risk). Medicare covers 100 percent of the cost of these vaccines if you go to an approved provider, and you do not have to pay a deductible or coinsurance. Medicare Advantage is also required to provide these vaccines at no additional costs.
Part B also covers vaccines if you are exposed to a dangerous virus or disease, such as rabies or tetanus. In those cases, you will have to pay a deductible and a 20 percent coinsurance.
Part D covers all other doctor-recommended vaccines, such as the shingles vaccine and the Tdap (tetanus, diphtheria, pertussis) vaccine. How much the vaccine costs will depend on whether you go to a provider who is in-network for your Part D plan. If you get the vaccine in-network, you will have to pay the co-pay amount. If you get the vaccine out-of-network, you may have to pay for the entire vaccine and bill Medicare. Medicare will only pay for the approved cost, which may be less than what you paid. If you have a Medicare Advantage plan that covers prescription drugs, it may cover these vaccines. The cost to you will vary, depending on the plan.
With regard to COVID-19, the CARES Act provides that if a vaccine becomes available, Medicare is required to cover this vaccine under Part B with no cost sharing. Medicare Advantage plans are required to include the basic coverage offered by Medicare Parts A and B, so this coverage also applies to beneficiaries in Medicare Advantage plans.
Reversing a three-year decline, the number of people covered by Medicaid nationwide rose markedly this spring as the impact of the recession caused by the outbreak of COVID-19 began to take hold.
Yet, the growth in participation in the state-federal health insurance program for low-income people was less than many analysts predicted. One possible factor tempering enrollment: People with concerns about catching the coronavirus avoided seeking care and figured they didn’t need the coverage.
Program sign-ups are widely expected to accelerate through the summer, reflecting the higher number of unemployed. As people lose their jobs, many often are left without workplace coverage or the money to buy insurance on their own.
Medicaid enrollment was 72.3 million in April, up from 71.5 million in March and 71 million in February, according to the latest enrollment figures released last week by the Centers for Medicare & Medicaid Services. The increase in March was the first enrollment uptick since March 2017.
About half of the people enrolled in Medicaid are children.
Medicare recently announced several ways in which scammers are attempting to steal numbers or other personal information, using fraudulent offers related to the COVID-19 pandemic.
Automated calls, text messages or emails appear to be the preferred method used for these scams. Some claim to offer free face masks, COVID-19 testing kits, cures or other protective equipment.
The catch, however, appears to be that people are asked to provide their Medicare numbers or other personal information in exchange for these supposed offers.
“If anyone reaches out to get your Medicare number or personal information in exchange for something, you can bet it’s a scam,” the agency said in an email PSA.
On its website, www.medicare.gov/fraud, Medicare offers the following tips and guidelines to protect against potential scams and fraud:
Medicare will never contact you for your Medicare number or other personal information unless you’ve given them permission in advance.
Medicare will never call you to sell you anything.
You may get calls from people promising you things if you give them a Medicare number. Don’t do it.
Medicare will never visit you at your home.
Medicare can’t enroll you over the phone unless you called first.
Those who experience or suspect fraud related to Medicare can call 1-800-MEDICARE to report it.