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How to Choose a Medicare Plan

The countdown begins on Oct. 15.

That’s day one of the 54 days when Americans 65 and older have to make their Medicare choices for 2018. These choices could save you hundreds, perhaps thousands of dollars a year and could well determine the quality of your health care, and your health, for years to come.

In other words, it’s important. It’s also complicated. Though the government has worked hard to simplify the bureaucracy around the 52-year-old program, Medicare enrollees face lots of choices. And particularly for Medicare Advantage (MA) and Part D drug plans, coverage options can be a moving target.

“These plans change a lot from year to year,” says Leigh Purvis, director of health services research with the AARP Public Policy Institute. “You can leave hundreds of dollars on the table if you’re not in the right plan for you.”

But the decision isn’t just financial; your health care needs and preferences often evolve as you age. As your needs change, you might be better off with different coverage.

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Even though same-sex couples can marry, they choose not to marry, as may opposite-sex couples.

You may decide to stay unmarried to avoid income tax burdens, or liability for back taxes and penalties on one partner.

A couple of key items when figuring income taxes:

• Married couples filing jointly can use capital losses to offset ordinary income only up to $3,000, or, $1,500 each if they file separately.

• An unmarried couple each filing separately can each use $3,000 offset or a total of $6,000.

• Unmarried couples may also be able to pay lower combined income taxes by having one partner file as head of household and the other file as unmarried taxpayer.

A few tax paying tips. It may not be romantic, but, these are the facts.


Get Paid for Your Opinion by Paul Ferraresi

Your 2 cents can be worth a whole lot more for you… up to $100. Yes, simply for taking part in a focus group for an hour or two, and, as much as $10 for completing online surveys.

A good starting point to get paid for your opinion includes… and also…

At and you can get paid for being an online “test juror” in court cases preparing for trial.


How to Enroll in – and Pay for – Medicare
by Paul Ferraresi

You must enroll in Medicare at age 65, unless you are covered by a health plan from an employer or your spouse’s employer. If you don’t enroll on a timely basis, you will have to pay late enrollment penalties.

For Part A, that penalty is a 10% increase in the monthly premium, which must be paid for twice the number of years you were eligible but not enrolled. The penalty for late enrollment in Part B is 10% for each 12 month period that you were eligible but not enrolled and the penalty must be paid for the ENTIRE time you have Part B coverage.

If you are receiving Social Security benefits when you turn 65, you will automatically be enrolled in Parts A and B. Retirees who aren’t automatically enrolled can do so as early as one to three months before the month you turn 65. Part B coverage will start as soon as you hit 65. If you wait until the month you turn 65 to enroll in Part B, or the three months after your birthday, there will be a delay before Part B coverage takes effect.


Part A covers hospital insurance; Part B covers medical insurance; Part C, also called a Medicare Advantage plan, combines Parts A, B and sometimes D; and Part D covers prescriptions.

Retirees can sign up for Parts A and B, and then decide if they need Part D. They may also decide if they need a supplemental “Medigap” policy since Medicare only covers a maximum of 80% of approved charges.

Alternatively, retirees can sign up for the Medicare Advantage plan. Medigap policies aren’t available to Medicare Advantage plan beneficiaries.

Retirees who want Part D coverage must sign up during their initial enrollment period or face late-enrollment penalties, unless you have comparable coverage through another plan. You can switch to Part D any time before that comparable coverage ends; after it does, retirees have 63 days to enroll in Part D. If you miss the initial enrollment period, you can sign up during the general enrollment period between January 1 and March 31, but coverage won’t begin until July 1.


The average out of pocket cost paid in 2016 was in excess of $5,000. Most people won’t pay Part A premiums if you or your spouse paid into Social Security for at least 10 years (40 quarters). If you paid into the system for between 30 and 39 quarters, the premium in 2017 is $224 a month, and increases to $411 per month for those who paid into the system for fewer than 30 quarters.

The base premium for Part B in 2017 is $134 per month. The more income you make, the higher premium you pay for Part B. For example, joint filers with a modified adjusted gross income between $170,000 and $214,000 will pay an additional $42 per month.

Part A deductibles are $1,317 in 2017 per benefit period or “spell of illness”. A patient is eligible for 90 days of hospital care and 100 days of extended care in the same benefit period.

However, coinsurance kicks in after 60 days and patients will have to pay $329 per day during the benefit period in 2017. After 90 days, when patients begin drawing on their lifetime reserve, coinsurance increases to $658 per day in 2017.

The deductible for Part B is $183 per year in 2017.

Part D coverage introduces the so called “donut hole”, the gap in coverage when costs exceed the combined annual deductible of $400 in 2017 and the initial coverage period of $3,700 in 2017. During that initial coverage period, patients are responsible for 25% of their prescription costs, but once they meet the donut hole limit, Part D benefits stop. Patients will take on 40% of the cost of covered brand name drugs and 58% of the cost of covered generics.

The maximum out of pocket cost for prescription drugs in 2017 is $4,950. Once that limit is exceeded, catastrophic coverage kicks in. Part D will pay 95% of covered drugs, or the cost of the drug minus the co-pay. Patients will be responsible for either 5% of the cost, or co-pays of $11.20 for generic drugs and $7.20 for brand name drugs, whichever is greater.


Long-term care is not covered by Medicare or Medigap. Medicaid, however, does cover some LTC services, although programs and eligibility vary by state.

by Paul Ferraresi

Most Americans think their healthcare costs will be next to nothing in retirement since they will have Medicare.

That conclusion is so far from the truth.  This recent article in Barron’s from February 4, 2017 all the real costs.

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