Medicare Update

Some hard-working, taxpaying Americans get angry when they hear Social Security called an entitlement program, perhaps because the word “entitlement” has come to have a connotation with welfare programs. The reality is that Social Security is, by definition, an entitlement program, along with Medicare, unemployment insurance and worker’s compensation. These mandatory programs are funded by people who work through their payroll taxes, so they are eligible for those benefits through those tax contributions.¹

These programs differ from the nation’s six major welfare programs: Medicaid, Temporary Assistance for Needy Families, Supplemental Nutrition Assistance Programs (SNAP), Supplemental Security Income, Earned Income Tax Credit and Housing Assistance. These needs-based programs are funded by federal revenues and administered at the state level.²

Federal government benefits for long-term care fall under the welfare umbrella of Medicaid; beneficiaries must meet certain low-income requirements. This leaves higher income retirees — who may have diligently saved for their retirement needs —to have to pay for long-term care costs because Medicare, in general, limits what it will cover.³ The odds are high that you or a loved one will need long-term care; someone turning 65 today has almost a 70% chance of needing some type of long-term care in their remaining years.⁴

This kind of care can be expensive: The median cost of a private room in a nursing home is $102,200 a year.⁵ There are insurance options to help pay for potential long-term care expenses; if you’re interested in learning about these options, contact us for more information.

There’s good news for some Medicare beneficiaries who need help caring for themselves at home: People who purchase a Medicare Advantage (MA) plan now may have more options for household assistance benefits. In 2018, Congress passed legislation that enabled MA plans to pay for some non-medical services for chronically ill members, such as coverage for grocery delivery, caregiver support and retrofitting homes with things like wheelchair ramps.⁶

The new legislation left it to plan providers to decide what types of supplemental assistance benefits to offer. Insurers have come up with some interesting offerings. For example, Anthem offers Medicare Advantage plans with coverage options for quarterly pest control, an allowance to help care for a service dog, access to acupuncture or massages, sessions with a dietitian or up to 64 healthy food deliveries per year.⁷

This year’s Medicare annual enrollment period runs from Oct. 15 through Dec. 7. It’s a good idea to comparison shop for plans with new options, or at least find out if anything new is covered in your current plan.

Our firm assists retirees and pre-retirees in the creation of retirement strategies utilizing investment and insurance products. Advisory services offered through B.O.S.S. Retirement Advisors, a Registered Investment Advisory firm.. Insurance products and services offered through B.O.S.S. Retirement Solutions. Marketing materials provided by Infinity Marketing Services.

¹  Kimberly Amadeo. The Balance. Aug. 27, 2019. “US Welfare Programs, the Myths Versus the Facts.” https://www.thebalance.com/welfare-programs-definition-and-list-3305759. Accessed Oct. 5, 2019.

² Ibid.

³ LongTermCare.gov. U.S. Department of Health and Human Services. “Who Pays for Long-Term Care?”  https://longtermcare.acl.gov/the-basics/who-pays-for-long-term-care.html. Accessed Oct. 14, 2019.

⁴ LongTermCare.gov. U.S. Department of Health and Human Services. “How Much Care Will You Need?”  https://longtermcare.acl.gov/the-basics/how-much-care-will-you-need.html. Accessed Oct. 14, 2019.

⁵ Genworth. “Cost of Care Survey 2019.” https://www.genworth.com/aging-and-you/finances/cost-of-care.html. Accessed Oct. 18, 2019.

⁶  Robert Pear. The New York Times. June 24, 2018. “Medicare Allows More Benefits for Chronically Ill, Aiming to Improve Care for Millions.” https://www.nytimes.com/2018/06/24/us/politics/medicare-chronic-illness-benefits.html?module=inline. Accessed Oct. 5, 2019.

⁷  Shelby Livingston. Modern Healthcare. Oct. 4, 2019. “Medicare Advantage insurers tout pest control, acupuncture among new 2020 benefits.” https://www.modernhealthcare.com/insurance/medicare-advantage-plans-get-creative-2020-benefits. Accessed Oct. 4, 2019.

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