In order to live with Clarity, it’s important to review all aspects of your financial condition. Reviewing health care coverage and costs every year is wise as the average annual health insurance premium for a family increased by 7% in 2024, and annual premiums have increased by a total of 25% since 2015. We are approaching year end and November is generally open enrollment time for employer sponsored health plans. Generally, you will be deciding between a high deductible health plan or a Copay plan. The key difference in a high deductible health plan is that it usually supports a HSA (health savings account) which is a vehicle for setting money aside pretax to pay for most types of health care. These plans typically have a lower premium and a high deductible. While the Copay plans generally have a higher premium with a lower deductible. The caveat for these plans is that most services will require a copay from you which will be a percentage of the fee. Don’t be afraid to ask lots of questions during your company’s benefit offering meetings and don’t make your decision without carefully weighing your options as a year full of health care costs can have a significant impact on your financial situation. Families aren’t the only group affected by increasing health insurance premiums. This is especially true once you reach age 65 as you will become eligible for Medicare, and you will need to figure out what coverage is right for you and if you will need any Medicare supplements (Also known as Medigap) to prevent a lapse of needed coverage. Additionally, if you are working it’s important to stay up to date with any changes to your employer’s plan and to know the costs/benefits associated with your elections for work sponsored health coverage.
Below is a high-level overview of Medicare coverage and its parts.
Part A: Hospital insurance
- Coverage: Helps cover inpatient hospital stays, skilled nursing facility care, hospice care, and some home health care.
- Cost: Most people don’t pay a premium for Part A if they or their spouse paid Medicare taxes for at least 10 years. There may be deductibles and coinsurance for services.
Part B: Medical insurance
- Coverage: Covers outpatient care, doctor visits, preventive services (like screenings and vaccines), and some home health care.
- Cost: Part B has a monthly premium, which can vary based on income. There’s alsoan annual deductible and typically a 20% coinsurance for most services after thedeductible is met.
- Part D: Prescription drug coverage
- Coverage: Provides prescription drug coverage through private insurancecompanies. Plans vary in terms of which drugs are covered and the costs.
- Cost: Part D plans have their own premiums, deductibles, and copayments. Thecost can vary widely depending on the plan and the medications you need.
In order to purchase a Medigap policy (which are offered through private insurance companies) you must be enrolled in both Medicare part A and B. These types of policies offer a varying level of benefits such as Plan F which has full comprehensive coverage that includes all deductibles and coinsurance for an additional premium cost.
Here are a few things to remember when selecting a Medigap policy:
- The prices can vary from company to company for the same coverage, so be sure toshop around for the best premiums and out-of-pocket costs
- Make sure your preferred care provider accepts Medicare
- Try to enroll for Medigap plans during your Medicare open enrollment period whichwill begin the month you turn 65 and are enrolled in part B. During this period, youhave guaranteed issue rights and can’t be denied coverage based on preexistingconditions.
If you have any questions on how your health benefit elections will affect your financial situation or how your Medicare/Medigap choices will affect your retirement plan, please contact a Nepsis advisor and we can provide you with more clarity.
Advisory services offered through Nepsis, Inc.: An SEC Registered Investment Advisor.
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