Stocks were all over the place last week, aided by chip maker Nvidia’s earning’s report and the Federal Reserve Bank’s meeting in Jackson Hole. Fed Chair Jerome Powell’s Friday speech indicates the Fed may continue to increase rates and hold them at higher levels longer than currently expected.
Something else that dropped this year are Medicare Part B costs, for just the third time in history. But Medicare has many moving parts. It’s available once you turn 65, with a few exceptions for recent immigrants. You can also receive Medicare if you are receiving Social Security Disability benefits, have end-stage renal disease requiring dialysis or a kidney transplant, or if you have ALS, also known as Lou Gehrig’s disease.
Traditional Medicare has three parts. Part A, which covers hospitalization, has no premiums for most participants. Part B covers doctor visits. The premium is currently $164.90 a month for people who are not affected by IRMAA, the Income related monthly adjust amount, a surcharge for higher-income participants. Part D is your prescription drug coverage and is purchased independently from Medicare.
While not an official “part” of Medicare, most participants also choose to purchase a Medigap policy, or Medicare supplement. While these are not part of Medicare, the plans must meet certain requirements and fall into different plan categories.
Some participants chose to opt out of traditional Medicare and purchase Medicare Part C, also known as Medicare Advantage. These are insurance policies sold by private insurance companies. Many offer benefits that traditional Medicare does not, such as vision or dental coverage, gym memberships, or alternative treatments such as acupuncture. The catch here is that, if you are unhappy and want to switch back to traditional Medicare, Medigap providers may exclude preexisting conditions for up to six months. You are also usually limited to a local network with limited or no out-of-network options.
For Federal retirees, there is currently no requirement for you to enroll in Medicare. You can remain on your Federal Employees Health Benefits. Even so, many federal retirees we work with choose to enroll in Medicare. When you do that, your federal benefits become your Medigap supplement and Part D coverage. If you are a State of Maryland retiree, you must enroll in Medicare. Military service members also enroll in Medicare. TriCare coverage switches to TriCare for Life, which coordinates with Medicare and functions as a Medigap policy and Part D coverage.
Your action item this week is to check your estate plan. If you don’t have a will, Power of Attorney, and Advanced Medical Directive, get one. If you do, and it’s over five years old, check to make sure your wishes haven’t changed.
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