New Medicare rule could require seniors to switch health insurance plans or face penalties7/29/2024
This recent Newsweek.com article:
https://www.newsweek.com/new-medicare-rule-could-force-seniors-switch-health-insurance-1928581 carefully examines a new Medicare rule under the Inflation Reduction Act could require seniors to switch health insurance plans or face penalties. This change particularly affects those who continue working past 65 and remain on their employer's health plan instead of Medicare. Currently, seniors can avoid late penalties for Medicare Part D if their company's plan pays, on average, as much as the traditional Medicare prescription drug plan. However, starting January 1, employer plans may no longer be accepted to avoid these penalties due to changes in Part D coverage. The key change is the introduction of a $2,000 out-of-pocket maximum for Part D coverage. Many employer plans have combined health and prescription maximums exceeding $2,000, potentially disqualifying them as creditable coverage. This could subject Medicare-eligible employees to late enrollment penalties. The late enrollment penalty applies if, after the initial enrollment period, a person goes 63 or more days without Medicare drug coverage or a creditable employer-provided plan. The penalty is calculated as 1% of the national base beneficiary premium ($34.70 for 2024) multiplied by the number of months without coverage. This amount is permanently added to the monthly Part D premium. To avoid confusion and potential penalties, seniors should take proactive steps: 1. Call ahead to ensure their Part D insurance replacement remains creditable. 2. Pay close attention to notifications from insurers about the creditable status of their prescription drug coverage. 3. Be mindful of these changes, especially if continuing to work past retirement age with employer-provided health insurance. A financial literacy instructor at the University of Tennessee at Martin, Alex Beene, emphasizes the importance of this issue, noting that seniors are already facing high healthcare costs. He advises seniors to be vigilant about these changes to avoid missing out on significant savings. The new rule presents a challenge for seniors who must now carefully evaluate their current coverage against the new Medicare standards. Those with employer plans that don't meet the $2,000 out-of-pocket maximum may need to consider switching to Medicare Part D to avoid penalties. This change underscores the complexity of healthcare decisions for older Americans and the need for clear communication and guidance from both employers and Medicare to help seniors navigate these important choices. Contact Ted Czabanowski if you have any questions about .your current Medicare plan. Comments are closed.
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