Medicare Advantage Plans and Medicare Supplemental Insurance, What’s the Difference?

Apart from the services offered by Medicare Parts A and B, there are Medicare health plans that are available through private companies that you can purchase. These Medicare health plans all have contracts with Medicare, and Medicare regulates the services offered by these private companies to ensure that you are afforded certain minimum coverage amounts.

Although Parts A and B of the Medicare program is already fairly comprehensive, people sometimes have some out of pocket expenses for medical bills that are not included in the coverage. It is for this reason that the government has allowed private companies to offer health plans to those who otherwise qualify for Medicare, but may want some additional coverage. The two options available through these private companies to complement your existing Medicare plan are Medicare Advantage Plans and Medicare Supplemental Insurance Plans.

Medicare Advantage Plans

A Medicare Advantage Plan is offered by Preferred Provider Organizations (PPO) or a Health Maintenance Organization (HMO) as a substitute to Medicare Part A and Part B. It offers the same hospital insurance covered by Part A and medical insurance covered by Part B of your original Medicare except for coverage of hospice care.

However, you can opt to have some other services or expenses included in your coverage depending on what your medical needs are. You can pay additional premiums for additional coverage for hearing, vision, or dental health benefits.

Medicare pays these private companies the monthly premiums for your Medicare Advantage Plans and they are required to follow any rules set by Medicare. Although this may be the case, the private companies can dictate how you will be able to get the medical services and limit you to having consultations with their preferred physicians. Medicare Advantage Plans are most popular in Florida, with Florida Blue Medicare being the largest provider.

Medicare Supplemental Insurance

Medicare Supplemental Insurance was designed to complement your original Medicare benefits and provide coverage for medical expenses that Medicare does not cover. Like the Medicare Advantage Plans, these are provided by private companies and to ensure the uniformity of health benefits among all health insurance providers, Medicare has made the coverage of all the types of supplemental insurance offered by private companies uniform. The premiums that private companies may charge for each type of supplemental insurance may vary, but the benefits are the same wherever you may choose to purchase it.

If you have a Medicare Supplemental Insurance plan, you are still eligible to be covered under all the benefits of your original Medicare. Since this supplements your original Medicare, you pay additional premiums to the private company in order to have coverage for the coverage that you have added to your original Medicare.

The difference

The way that each program is designed and what each plan covers is where the difference lies. Enrolling in a Medicare Advantage Plan means moving out and getting the services of a private company for the same services being offered by Medicare. Medicare Supplemental Insurance, on the other hand, maintains your original Medicare benefits while providing you additional coverage for medical expenses not covered by your original Medicare. Medicare Advantage replaces Medicare, while Medicare Supplemental Insurance, as the name suggests, provides options to supplement the coverage you already have with Medicare.

Do You Need Burial Insurance?

Although we don’t like to think about it, everyone should plan for their funeral while they are still healthy in body and mind. Burial insurance is an insurance policy that is used to cover funeral expenses when someone passes away.

The average funeral today costs an average of $8,000. Many families do not have that kind of money sitting around for burial costs. Taking out an insurance policy will ensure the money is available when needed.

Why should you buy burial insurance? Here are some of the more important reasons.

1. Funeral insurance can cover funeral costs that might be expensive to pay for otherwise. Even families with sizable savings accounts may have other expenses that unexpectedly deplete savings.

2. A burial policy provides ready funds for funeral costs that make it easier on family members to make final arrangements. It removes the burden of hastily reviewing available resources and scrambling to pay for funeral expenses.

3. Getting a burial policy puts everyone’s minds at ease. The person covered by the policy can take comfort in knowing the family won’t have to struggle when the time comes. Family members, who will be grieving and dealing with many issues when a loved one passes, will be able to handle the funeral costs up front and smoothly.

4. It is affordable. Even at advanced ages, it is a far less expensive option than looking at traditional life insurance for senior citizens.
5. Funeral insurance ensures that the person who is covered will have the type of insurance that he or she desires. Everything will be arranged ahead of time to put his or her mind at rest.

6. Funeral agents can work with the family to make clear arrangements for the deceased person. There will be no questions or delays due to transferring funds or borrowing money to cover the costs associated with a funeral and burial.

Planning ahead makes good sense. Everyone should give some thought to future funeral plans and consider taking out a burial policy. Funeral insurance will ensure the policyholder’s wishes are carried out as desired, and that the family will not have to worry about paying final expenses. A funeral policy offers thoughtful protection for everyone involved in the process.

Florida Undercutting Health Care Enrollment

Florida Undercutting Health Care Enrollment

As many states are about to roll out and introduce one of the linchpins of the Affordable Care Act, the insurance exchanges which are designed to make health care more affordable, a handful of states are taking the opposite approach. They are making enrollment efforts more complicated and limiting information about the new program.

One of the primary offenders is the state of Florida, where Governor Rick Scott and the Republican controlled state legislature have made it more challenging for their fellow Floridians to obtain the cheapest insurance rates under the Florida Health Insurance Exchange, and to get help from outreach counselors trained specifically for the new health care program.

Missouri and Ohio, who also seem to be trying to sabotage Obamacare, have also moved to undercut the law and its insurance exchanges, which will be opening on October 1st. In Georgia, the state insurance commissioner, Ralph T. Hudgens, has said he will do “everything in our power to be an obstructionist.”

The secretary of health and human services, Kathleen Sebelius, along with the Obama administration, are intensifying their efforts to win public support for the exchanges in Florida and elsewhere. Last week, she made a three-city visit to Florida, which has the country’s second largest number of uninsured residents, and had sharp words for the state’s unwillingness to support the law. She will did the same in Missouri later in the week.

“It’s unfortunate that keeping information from people seems to be something of a pattern here in the state,” Ms. Sebelius said at a news conference in Miami, referring to restrictions on outreach counselors.

The purpose of the online exchanges is to offer a variety of insurance plans at subsidized prices. They are meant to make health care more affordable to lower-income people who do not have insurance. Designated outreach counselors, also being called navigators, provide information about the plans and help enroll applicants.

Even among those states that are actively against the law, Florida became a rogue earlier this year by passing a bill removing for two years the state insurance commissioner’s ability to approve insurance rates for new health plans. This leaves Florida residents vulnerable to higher rates at a time when the new health plans will be introduced.

Meanwhile, in other states, insurance commissioners have used the law to obtain better deals for consumers.

It just seems like Republicans are trying everything they can to throw up roadblocks to the law. They couldn’t beat it in Congress. They tried 41 times now to repeal it. They lost in the Supreme Court. Now they are fighting in individual states, but it would seem at the expense of the residents of those state.

Time will tell.

Life Insurance Benefits Your Loved Ones

Life insurance is one of the most important things that everyone should invest in. It may not seem like it at the time, but you never know when an accident is going to happen or someone could come down with a deadly illness. Life insurance has many benefits as to why you would want to invest in it.

One of the main reason is because of finances. If someone is to lose a spouse then they may be losing their income that they supported their family with. Not only will there be funeral costs but there are also debts that the person left behind. Some debts would include student loans, credit cards, a mortgage, car loans, medical bills, and many others. Cheap term life insurance can ensure that these matters are taken care of without any stress or worries.

Another great thing about life insurance is that is going to help with those living as well. It’s going to help ensure that the children left behind will have help with funds to college. That the spouse will have some sort of retirement funds available to them.

Also if no one has passed and they have life insurance they can benefit from that as well. It may help with retirement planning, furthering education, and provide withdrawals or loans from the life insurance. As each year progresses the more money will build up on the life insurance policy. This money can be used to help purchase a new car, a new home, or to help cover expensive vacations.

Life insurance has many benefits and many advantages. Everyone should consider life insurance especially if you have a family. They will be the ones that are going to benefit the most from this life insurance policy. No matter what your current age is, it’s never to late to get life insurance.

Why CD’s Are Not An ‘Investment’

time depositI cannot tell you how many times I have had a new client tell me they do not want to take any risks with their money, so they want to ‘invest’ it in CD’s. If someone is really risk averse, CD’s are not a good option. They do carry risk. People just do not totally grasp the risk that goes along with CD’s.

First of all, let’s get one thing out of the way. CD’s are not an investment. They are a bank product designed to preserve principal. They are not designed to make your money grow. When I tell people that, many of them tell me about the old times when they used to get 12% on their CD’s. Yes, there have been times where you could get a CD paying 12% interest or even higher. Some of you younger folks might find that hard to believe considering where CD rates are today. What people forget about those old times is that they were also paying 19% on their mortgage! Gas prices were growing out of control. Inflation was at an all-time high.

That brings me back to where I started. There is risk involved with CD’s. It is just not the type of risk that most people think of. When most investors think of risk, they immediately think of the loss of principle risk associated with investments that lose value. When it comes to money there are other types of risk. With CD’s, the risk you face is loss of purchasing power. Time deposit products are not designed to keep up with inflation. They are designed to hold your money and pay you a small interest rate in exchange for you tying up your money with the institution for a set period of time. Because the rate of return they pay does not generally keep up with inflation, you have lost money at maturity. You just cannot see it.

Let’s say I put $10,000 into a CD for 5 years. Today, you might be able to squeeze out a 2% return from your bank at that timeframe. After 5 years, you now have $11,041, assuming you compounded the interest. Did you lose money? Technically, no. However, on average, inflation runs 3-4% a year. At the end of the 5 year term, can you buy the same amount of goods and services with your $11,041 as you could with your $10,000 at the beginning of the term? Unfortunately, the answer to that question is usually that you cannot.

You were taking a risk with your money without ever knowing it.

Does that mean that CD’s have no place in your financial portfolio? No, of course not. They are still useful for the right purposes, but they are not a vehicle you should use to save for retirement. We’ll talk more about that at another time though.

Understanding Whole Life Insurance

Understanding whole life insurance may seem complicated to some, but there are a few things that anyone can keep in mind. One of the first things to know about whole life insurance is that it remains in effect over your entire lifetime. Although this policy never has to be renewed, it can end if it is cashed in or if the policyholder stops making payments on the premiums. However, while the premium is initially higher than with other policies, it usually does not increase.

In addition to the policy protecting its holders their entire lives, the benefits from a whole life insurance policy, besides the obvious  death benefit, includes a cash value and a loan value. The value of the policy can be used against a loan for major life purchases such as for a house or for college tuition. The policy also may usually pays dividends as well as provide a reduced paid up policy for those who choose this it.

Of course, there are also a few advantages and disadvantages of a whole life insurance policy as compared to others such as term life and universal life insurance policies. One of the first advantages of this policy is that it helps its policyholders with budgeting because the premium tends to stay fixed with this policy. Furthermore, the cash value of the policy accumulates, so this helps for those who may need to take a loan against the policy.

However, whole life insurance policies have one very overwhelming disadvantage that prevents them from being viable options for everyone. They are more expensive. Just taking a quick look at some whole life insurance quotes versus term life insurance rates, you will quickly see there is a significant price difference.

The higher premium is a deterrent for many, especially since there is no cash value for these policies for at least three to five years. This means that the policy does not meet the policyholder’s short term needs. They can also be expensive if they are surrendered early.