Stuart Paap, The Daily Record Newswire
Here's some important information about keeping your clients' financial house in order. Today (drumroll please), it's a Medicare primer.
Before we begin, two key facts:
1) To be eligible for Medicare, one must be 65 (unless one is disabled, qualifies for Social Security disability due to ALS, or qualifies for SS disability due to chronic kidney disease that requires dialysis or transplant).
2) There is a difference between Medicare and Medicaid. Medicare is a health insurance program that virtually all U.S. residents aged 65 or older qualify for. Medicaid is a medical assistance program only for those who meet the program's low-income and low-asset eligibility requirements.
Medicare Parts A, B, C and D
Medicare Part A helps pay for inpatient hospital care, hospice care and skilled home-health services for homebound patients. Does one need to pay to have coverage? Almost everyone who qualifies for Medicare Part A at age 65 does not have to pay an additional premium to have it. If getting free Medicare is not possible (for whatever reason), one can usually purchase coverage.
It's probably a good idea to take Medicare Part A at 65, whether one works or not, even if one has other insurance through work. By the way, it's good to know that if one has already applied for Social Security benefits, Social Security automatically enrolls him or her in both Part A and Part B of Medicare at 65. If one has not applied for Social Security, one should contact the Social Security Administration to enroll in Medicare Part A a couple of months before turning 65.
Medicare Part B helps provide for doctor's services, outpatient hospital care, medical equipment and supplies. All U.S. citizens and legal aliens who have lived in the United States for at least five years qualify for Part B at age 65. No work history is required, but everyone who wants Medicare Part B must pay a monthly premium. Although having Medicare Part B is optional, one will almost certainly need Medicare Part B.
Medicare Part C, a.k.a. "Medicare Advantage," is a private-sector alternative to Part A and B that gives one the option to buy government-subsidized insurance from the private sector rather than using the traditional government Medicare coverage.
Individuals with Part C usually have lower deductibles and co-payments than those with the traditional fee-for-service Medicare and get more benefits. However, Part C plans typically restrict your choices of health care providers, and one may have to pay a monthly premium. Part C plans do not cover nursing home or other long-term care.
Lastly, Medicare Part D relates to prescription drug coverage. Remember that "D" stands for drugs. On average, after deductibles and co-payments, Part D pays the majority of prescription drug costs, both generic and non-generic. Each Part D plan has a list of drugs that it covers. While the rules must allow for medically-necessary exceptions, clients should pick plans that cover the drugs they take. MLW
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Stuart Paap is a financial advisor with Paap Wealth Management Group of Wells Fargo Advisors, LLC, in Waltham. He can be contacted at stuart.paap@wfadvisors.com. Wells Fargo Advisors, LLC, Member SIPC, is a registered broker-dealer and separate non-bank affiliate of Wells Fargo & Company.
Published: Wed, Oct 01, 2014
