Tag Archives: Pocket Expenses

2013 HSA Contribution Limits

2013 HSA Contribution Limits

The IRS has recently announced the new contribution limits for HSA’s (Health Savings Accounts).

HSA contribution limits: 

  • Individuals (self-only coverage) – $3,250 (up $150 from 2012)
  • Family coverage – $6,450 (up $200 from 2012)

HDHP minimum required deductibles:

  • $1,250 for self-only coverage
  • $2,500 for family coverage

Out-of-pocket maximum:

(Out-of-pocket expenses include deductibles, co-payments, and other amounts, but not premiums)

  • $6,250 for self-only coverage
  • $12,500 for family coverage

Under guidelines implemented in the Patient Protection and Affordable Care Act, over-the-counter drugs may only be reimbursed if they have a prescription. If a policyholder uses an HSA to pay for items or services that aren’t qualified medical expenses, the tax penalty is 20 percent of the HSA distribution.

Don’t Let Long-Term Care Needs Take You By Surprise

Don’t Let Long-Term Care Needs Take You By Surprise

One of the most pressing concerns for seniors is ensuring they have adequate health insurance, especially since the government is providing less and less and the cost is going up and up. Long-term care is one area that is taking many seniors by surprise.

There has been a longstanding gap between the long-term care needs of seniors and what’s really covered by Medicaid and Medicare. Of course, the latest restrictions that limit the availability of nursing home coverage through Medicare doesn’t help. The bottom line is that seniors simply can’t afford to ignore this issue and let it take them by surprise.

Of course, finances are going to greatly impact the approach to long-term care.

Sadly, those with a minimal income and assets have few affordable options available to them. They will usually quickly go through their limited funds and qualify for Medicaid rather easily.

On the other hand, those with incomes over $75,000 a year and that have over $500,000 worth of assets are facing an endless cycle of out of pocket expenses. Even those that have planned well for the future can watch as their nest egg drastically depreciates from years of long-term care expenses. A nursing home bed alone can cost thousands of dollars each month. Purchasing long-term care insurance to pay for these costs is a prudent choice for this group.

A third group is the middle class. This group is comprised of those with moderate incomes of $30,000 to $50,000 and assets not exceeding a few hundred thousand dollars. This group often isn’t well off enough to afford long-term care insurance, but is too well off to quickly qualify for Medicaid. Long-term care needs of one unhealthy spouse can eat away at savings to the point that a healthy spouse is left impoverished for the remainder of his/her life.

If the funds simply aren’t there to buy long-term care insurance, there are some other options. For example, an existing life insurance policy may be sold through a life settlement, a reverse mortgage, or simply downgrading homes can all be additional sources of money. None of these may be pleasant thoughts, but they are methods that can free up cash for long-term care needs. However, it may be a smart decision to use these new funds to purchase long-term care insurance instead of paying long-term care costs directly out of pocket.

The benefits of assisted living facilities, nursing home care, and skilled and custodial home healthcare are invaluable. And there are many issues, from emotional to financial, that influence how long-term care needs are addressed. More often than not, when a spouse, parent, or loved one is no longer able to care for themselves, the healthy spouse, child, or relative isn’t so quick to spend savings on caregivers and skilled nursing care. Instead, the healthy person risks their own health to care for their incapacitated loved one. This can create a serious physical or emotional burden that words cannot describe.

When early steps are taken to ensure appropriate long-term care is available, life can be much easier for the senior and their family. With appropriate long-term care planning, the spouse, child, and so forth may focus their energy on providing attention and love instead of completely altering their life to become a primary caregiver.

Predicting what future medical needs will be is impossible in most cases. Some seniors may never reach the point that they need long-term care needs. However, statistics show that almost half of all senior citizens will eventually need nursing home care. Even those that don’t require nursing home care will usually still require some type of skilled, semi-skilled, or unskilled assistance. So, it’s vital to protect your health, as well as the health of your family, by planning ahead for these times of uncertainty.

What to Expect with New Medicare Supplement Changes

What to Expect with New Medicare Supplement Changes

With the Medicare Prescription Drug Improvement and Modernization Act of 2003 taking effect June 2010, Medicare supplement plans will undergo several major changes. This will include the elimination of four current plans for new enrollments and the addition of two new plans. The new plans are designed to lower out-of-pocket expenses for consumers and provide for additional benefits.

Medicare supplement plans, which are also known as Medigap plans, are meant to cover the out-of-pocket costs associated with Medicare Parts A and B. Individuals qualify for Medicare health insurance if they are 65 years of age or older, or if they are eligible to receive benefits due to a disability.

Currently, there are twelve different supplement plans, which are labeled Plans A through L. While the plans all share the same benefits, premiums for the plans vary according to the issuing insurer.

Medicare Supplement Plan Additions And Changes

The two additional plans that will be added are labeled as Plans M and N.

Plan M is also similar to the current Plan F in terms of benefits with several important changes. Plan M will cover only half of the Part A annual deductible ($1,100 for 2010) and none of the Part B annual deductible ($155 for 2010). Also, it will not cover any Part B excess charges. Plan M is expected to cost around 15% less than Plan F.

Plan N will offer a similar benefit structure to the current Plan F. Differences include a $20 co-payment for visits to the doctor and a $50 co-payment for emergency room visits. Like Plan M, it will not cover the Part B deductible nor offer Part B excess coverage, but will cover 100% of the Part A deductible. With these benefit changes, Plan N will cost approximately 25% less than Plan F.

All Medicare supplement plans will now include a hospice care benefit. In addition, Plan G will now cover 100% of Part B excess charges versus its current 80% coverage.

Eliminated Medicare Supplement Plans

Plans E, H, I and J will no longer be offered. Also, preventative care and at-home-recovery benefits will also be removed from Plan G. According to government studies these benefits were seldom used and deemed unnecessary.

All seniors are strongly encouraged to review their current plans. Specifically, they should check with an agent to learn about lower rate options and whether or not their current plans will be affected by the change.

It’s important to note that if you have a Medicare supplement plan currently, you can stay enrolled on it due to a grandfathering clause and your benefits won’t change. However, since these plans will no longer be offered to the public, future rates are likely to be higher than with the new modernized plans.