Comprehensive Planning. Lifelong Solutions.

What is Medicare Advantage?

By Hook Law Center

Medicare Advantage is an alternative to regular Medicare created by Congress in an attempt to cut costs in 1997. It is a managed care plan administered by a private provider instead of state governments. It has certain pros and cons when compared with regular Medicare. Read on to learn about Medicare Advantage and see if it is right for you.

Medicare Advantage patients are generally subject to a small copayment whenever they see a doctor, after which the visit is completely covered. This is in contrast to having to pay a deductible and then coinsurance – typically 20 percent – which is usually the case under regular Medicare. This generally eliminates the need for a supplemental Medigap policy.

Another attractive feature of Medicare Advantage plans is that they usually cover products and services not covered by regular Medicare, such as prescription drugs and custodial care. Some also cover hearing and vision care, gym memberships, and other services.

These perks do not come without a cost. The primary method by which Medicare Advantage plan providers reduce expenses is limiting the doctors and other providers that a patient can see to a particular network. If a patient voluntarily sees out-of-network providers, they must pay the full cost. However, if a patient’s in-network physician orders medical services not offered by any in-network provider, the Medicare Advantage plan is required by law to pay for those services at an out-of-network provider as long as those services are normally covered by Medicare.

Another cost-cutting measure is to prohibit patients from seeing specialists on their own; patients must be referred to specialists by their primary care physicians. However, plan administrators strongly discourage physicians from referring patients to specialists unless it is absolutely necessary.

These are the primary differences between regular Medicare and Medicare Advantage. If you need to reduce your medical costs and do not mind having to see only in-network health care providers, Medicare Advantage may be right for you.

Posted on Wednesday, June 26th, 2013. Filed under Medicaid.

Retirement Planning Falls Into Five Phases

By Hook Law Center

Retirement planning may be broken down into five phases. Each phase has its own goals and presents its own challenges. Read through to understand proper retirement planning as a whole, decide which phase you are currently in, and then take careful consideration of the tips for that phase.

Phase 1: Accumulation

This phase may begin as early as your first job, or at least your first full-time job. If your employer offers a retirement plan such as a 401(k) or 403(b), sign up for it right away. Because the accumulation phase lasts a long time, it can be tempting to postpone retirement account contributions. But time works in your favor to compound investment proceeds and grow your nest egg.

Does your employer offer contribution matching? If so, you should make every effort to contribute the amount required to maximize this matching. Otherwise, you are leaving money on the table. Beyond that, try to raise your contributions as close as possible to the legal maximum. For 2013, that is $17,500 for most workers.

Phase II: Pre-Retirement

This phase begins about 15 years before retirement, or around the age of 50. Speak with a benefits specialist or a financial advisor to understand how you will convert your savings into an income stream. Now that you are getting closer to retirement age, are your savings invested in volatile assets? Is it time to begin to adopt a more conservative mix? Learn more about the Social Security and Medicare options available, and consider whether to purchase long-term care insurance now, while your premiums may still be low.

Phase III: Early Retirement

This phase lasts from the beginning of retirement through age 70 and entails three tasks. First you must assess how well savings are working for you. Consider whether you need to adjust your investment strategy and/or living expenses. Next, with the help of a financial advisor, make new projections of income and expenses. Professionals recommend projecting cash flow to age 100 to be safe. Finally, take into account minimum distribution requirements, which begin at age 70 regardless of whether you have retired.

Phase IV: Mid-Retirement

Phase IV begins at age 70 and lasts for as long as you are high-functioning and able-bodied. At this point, you should plan and discuss with your family a desired course of action should your health deteriorate. The loss of abilities or mental clarity often happen gradually over time. It may be difficult, but you should discuss with your loved ones what will happen if you lose your ability for self-care.

Phase V: Late Retirement

At some point, everyone’s health takes a turn for the worse and recovery becomes unlikely. Self-care becomes impossible. No one knows when this time will come, which can delay action. But if you put forth the required effort in the previous phases, this transition can go smoothly and in fact be life-affirming.

Posted on Thursday, June 13th, 2013. Filed under Estate Planning.
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