Planners should take note for their clients of the new Medicare options that were created under the Affordable Care Act.
Frank Winter, partnership manager for the New York City office of the Centers for Medicare & Medicaid Services, outlined many of the changes to the federal program via a rebroadcast to an audience of financial planners this past weekend.
“It’s so important for planners, when giving financial advice, to think of the whole family -- including parents and grandparents, when determining who is eligible for appropriate Medicare programs, so clients can get the best possible coverage,” said Winter, speaking at FPA’s annual conference in San Diego.
The new law created a number of new enrollment plans for Medicare
Advantage, and participants will now have additional choices of providers, he said. Additionally, Medicare Advantage plans must now limit out-of-pocket costs. There is also increased Medicare coverage for preventive treatments and a move to an electronic system for medical records.
In addition, the new law calls for the closure of the “donut hole” for prescription drug benefits. Last year, participants had to pay for medications themselves after their Medicare Part D coverage paid for the first $2,840 in costs, and then Medicare picked up coverage again after the medication costs exceeded $6,440.
However, participants with incomes above $85,000 ($170,000 for couples) will have to pay higher Part D premiums. Participants receiving lump sums of income, for instance when they retire and the funds in their 401(k) plans are dispersed, are exempt for that year -- though they must apply for such an exemption at their local Social Security Administration office.
“There’s also a greater coordination of care between providers, which should help contain costs and enable them to give better care,” Winter said. “We’re working with providers to improve the experience of care.”
Planners should also be aware of the advent of an Early Retirement Reinsurance Program under the new law, Winter said. The program is for people between the ages of 62 and 65, to cover them after they’ve dropped the plan of their last place of employment or union, and until they are eligible for Medicare, he said.
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