Also known as Medicare supplemental insurance, “Medigap” is a type of health insurance policy available through private insurance companies. Medigap refers to the type of coverage these policies cover: the difference between what Medicare covers and what it doesn’t cover. The “gap” is the out-of-pocket expenses not covered by Medicare insurance. According to the federal government, almost one-fifth of those covered by Medicare purchase Medigap coverage to cover their unreimbursed Medicare costs.

Medicare insurance covers senior citizens age 65 or older and those with certain serious kidney diseases, regardless of age. Additionally, if you receive Social Security Disability Insurance benefits, you may also receive Medicare benefits, regardless of your age. Depending on the type of Medigap coverage you purchase, you may be eligible to receive prescription drug coverage. Currently, Medigap insurance policies only cover out-of-pocket hospital costs and doctor’s visits uncovered by Medicare. For instance, your Medicare policy may not cover copays or insurance deductibles, in which case purchasing supplemental insurance could save you money, depending on your health care needs. According to federal and state laws, most Medigap providers must provide their enrollees with a standard package of benefits. The federal Centers for Medicare & Medicaid Services provides a free downloadable publication to help you understand the basics of Medigap policies: http://www.medicare.gov/Publications/Pubs/pdf/02110.pdf

Pyke & Associates, P.C. is a member of the American Academy of Estate Planning Attorneys.

Healthcare coverage has become one of the central issues in American politics over the last decade or so. While you may not have a real interest in politics, if you are a senior you likely do have an interest is healthcare coverage. For the millions of Americans who do not have private healthcare coverage, or who lose that coverage after they retire, the Medicaid and Medicare programs must fill the gap. Understanding the basics of each program may be beneficial to you if you are deciding which program to apply to for coverage.

• Medicaid
• Federally and State funded
• State administered
• Eligibility criteria as well as benefits can vary by state
• No monthly premiums or participation fees
• Can be small co-payments for some services
• Generally covers more services than Medicare
• Income and asset limits apply based on the household
• Must re-qualify on a regular basis
• Medicare
• Federally funded
• Federally administered
• Guidelines and benefits are the same in all states
• Anyone over the age of 65 (and some under if disabled) qualify for participation
• Must pay monthly premiums
• Divided into parts. One part pays for hospital services, another insurance and yet another prescriptions
• No need to re-apply or re-qualify
• No income or asset limits

Although there are income and asset limits for the Medicaid program, it is important to note that there may be estate planning tools that can be used to help you qualify for the program without losing any of your income or assets. Talk to your estate planning attorney for details.

Pyke & Associates, P.C. is a member of the American Academy of Estate Planning Attorneys.

If you have been watching the saga surrounding the federal budget deficit that has been taking place in Washington over the last year or more you have probably heard of the “super committee.” This is a bipartisan congressional committee that is charged with the responsibility of devising a plan for reducing the federal deficit by $1.5 trillion over the next decade. They must submit a proposal by November 23rd that is to be voted on by December 23rd.

It is difficult to undertake this task without taking a look at Medicare, because Medicaid and Medicare combined consume 23% of the federal budget. Because a significant portion of the committee does not want to see revenue increases as a way to reduce the debt, cuts to Medicare are being considered, and such cuts could have a significant impact on you if you are planning for your retirement in Henry County.

Right off the bat you have to be aware of the possibility of your retirement age being moved back. One of the actions being considered is to raise the age at which Americans can apply for Medicare benefits, and for that matter they are also talking about raising the Social Security retirement age.

In addition to this, there have been calls for a jettisoning of the Medicare system as we know it. Some people are in favor of implementing the idea that was put forth by Rep. Paul Ryan of Wisconsin. This proposal would get rid of Medicare in its present form entirely and replace it with vouchers that seniors could use to help defray the cost of health insurance that they could buy from private insurers. Such a move would reduce Medicare spending by shifting more of the cost burden onto our nation’s elders.

The bottom line is that the actions of the super committee are likely to have an impact on your retirement, and this is something to observe closely as this year comes to a close.

Pyke & Associates, P.C. is a member of the American Academy of Estate Planning Attorneys.

When you reach the age of 65, you will be eligible for Medicare enrollment and must sign up unless you have insurance through a current employer. The Medicare system consists of four parts: Part A which covers hospital care, Part B for doctor care, Part C for more comprehensive coverage and part D for prescription drug coverage. To pick your type of Medicare, you must understand what each part does. Part C, known as Medicare Advantage, is administered through Medicare approved private insurance companies.

How to Sign Up

Medicare Advantage plans differ from state to state and even from one county to another. To sign up for a Part C plan, you should find out what options are available for the area where you live. Some plans require that you already have Part A and B.

To learn more about a specific plan or to sign up for it, you will need to contact the private insurance company that offers that plan. If you are signed up with one plan and want to change to another, you can do so each year between November 15^th and December 31^st.

What It Covers

Medicare Advantage covers everything included in Parts A and B: hospital care and doctor treatment. The only thing not included in your plan is hospice care. Beyond the basics of regular Medicare, many Part C plans offer additional perks: dental, vision, hearing, wellness checks, and prescription drugs. If your plan does not offer a prescription drug plan, you can sign up on your own for a Part D plan.

What It Costs

Although Medicare Advantage plans differ in cost, they can all ask you to pay a co-payment, co-insurance for medical equipment or a yearly deductible for prescription coverage. Besides your Part C expenses, you must also pay your Part B premium each month. This amount can be deducted from your Social Security check. Be aware, you cannot use a Medigap Policy to pay your Medicare Part C costs.

Pyke & Associates, P.C. is a member of the American Academy of Estate Planning Attorneys.

As you plan for your retirement years, you should also consider your possible need for long term care. Three quarters of all retirees will need some form of extended care. Long term care may mean simple assistance with basic daily activities such as cooking and cleaning or it may mean more constant medical and personal care. The type of care that is right for you depends upon your needs and your personal preferences.

Adult Daycare

If you live with a loved one who assists with some of your daily activities, you may opt to use an adult daycare facility. This is a daytime only place for you to go and be with other senior citizens while your family members are at work. Adult daycares offer a wide range of social activities. This option is best for those with light care needs who wish to remain in their own home or the home of a family member.

Assisted Living Facility

If you do not live with a family member and wish to retain some of your independence, you may enjoy an assisted living facility. These are apartments or homes with a central gathering area for activities and meals. This type of facility is great if your medical and daily needs are low key.

Nursing Home

Nursing homes or Skilled Nursing Facilities are a common choice for many who need daily medical assistance and help with most or all activities of daily living. Gone are the days of stark, hospital smelling facilities. Many nursing homes have a very homey feeling. For those who are able to participate, there are also a wide range of events to attend.

In-Home Care

Do you prefer to stay in your own home for as long as possible? This is the choice of many retirees. In-home care allows you to hire caregivers who can help you for a few hours during the day, or around the clock if you require constant assistance. The benefit of in-home care is that you can remain in a familiar environment. The downside, however, is that Medicare, Medicaid and other types of insurance may be limited on what in-home care costs they will cover.

Pyke & Associates, P.C. is a member of the American Academy of Estate Planning Attorneys.

Nearly 20% of people over the age of 65 have fallen victim to some type of fraud, whether it be an inappropriate investment, unreasonable fees for services or outright theft. Following is a rundown of just a few of the latest fraudulent schemes to watch for:

Medicare Scams

Medicare is complicated, and scammers know that fact all too well. They often send email or make phone calls to seniors purporting to be a Medicare employee and asking to “confirm” sensitive financial information, such as a bank account number, social security number or a credit card number. Medicare will NEVER ask for information in that manner, particularly financial information. Don’t be afraid to ask the caller for their name, phone number, title and the name of their department. Verify this information with Medicare before answering questions, even if the caller claims the information requested is needed to fix an error. You may also call the Health and Human Services Office of Inspector General at 800-HHS-TIPS if you suspect you’ve received a fraudulent call or contact a Medicare office to confirm a worker’s identity.

Debt Scams

Thieves can also target seniors who have recently lost their spouse. In a recent scam, a couple would scour obituaries and contact the surviving spouse claiming an outstanding bill or debt that must be paid immediately. They requested a check or credit card information to “avoid penalties and fines”. They took the money and were never heard from again. Ask any creditor for verification of a debt via a written confirmation with all details. Confirm outstanding balances and ask questions of all “collectors”.

Repair and Contractor Inflation

Beware of any contractor or repairman who would make the first point of contact offering to “fix” something or help with landscaping. These “workers” are often looking for someone to pay inflated rates for work that is either never completed or poorly done. If you are the person initiating contact for a repair or a contractor, make sure to get more than one estimate to ensure prices are reasonable. Check out contractors and servicemen through the Better Business Bureau and always confirm that they are properly licensed. If it’s something that is outside your knowledge area, ask a friend or relative for assistance in hiring a good, honest, insured contractor.

Don’t be a victim, trust your instinct and always:

• Ask questions;
• Confirm information;
• Make informed decisions;
• Ask a friend or relative for advice or assistance;
• Avoid giving sensitive information to callers or via email – including a social security number, credit card or bank account numbers or even a date of birth;
• Check out businesses with the Better Business Bureau or a local Chamber of Commerce.

Don’t be embarrassed to ask questions or ask for additional information. If a situation escalates, don’t be embarrassed to ask for advice or assistance on how to handle it. It’s always better to be safe than sorry.

Pyke & Associates, P.C. is a member of the American Academy of Estate Planning Attorneys.

Nearly 25% of senior citizens enrolled in Medicare choose a Medicare Advantage Plan. Medicare Advantage is offered by private insurance companies and subsidized by Medicare funds. Medicare Advantage Plans typically offer more benefits than the Original Medicare Plans; however, you may be required to see doctors that belong to the plan or go to certain hospitals, much like a traditional HMO.

Medicare Advantage is similar to a private insurance plan, but offers lower rates to senior citizens as the plans receive subsidies from the Medicare program. In essence, the Federal Government is paying these plans to manage Medicare benefits. But the 2010 Health Care Reform Act cuts the subsidy payments Medicare makes to private Medicare Advantage Plans.

What remains to be seen is how these cuts will affect the care and benefits of those enrolled in these popular programs. Many are concerned that these cuts will lead to a reduction in their plan’s “extra” benefits, such as dental coverage and free eyeglasses, to make up for the subsidy reduction, or worse, a rise in premiums.

There is a bright spot for Medicare Advantage recipients; the new health care law takes strong steps to ensure that by 2014, at least 85% of every dollar received in these plans is spent on health care, rather than administrative costs and profits. Supporters hope that this results in better health care and coverage for seniors.

The 2010 Health Care Reform ACT will affect the health care of senior citizens and Medicare benefits and programs, particularly the Medicare Advantage Plans. These changes are being phased in over the next several years, but it’s important to remember that no one currently using Medicare Advantage is going to be suddenly without coverage.

Stay informed and up to date as we see the details on these changes to health care emerge.

Pyke & Associates, P.C. is a member of the American Academy of Estate Planning Attorneys.