By Michele Campbell,
Independent Agent
Michele has been in the insurance
business for over 25 years and
specializes in Medicare, individual
health and life insurance. She is
passionate about helping her clients
to find the right plan to fit their needs.
She is an active member of the Gilroy
Chamber of Commerce, Gilroy Rotary
and Gilroy Leadership Class of 2015.
Visit mcinsuranceservices.com or
call 408.848.2271.
LONG TERM CARE
The need for Long Term Care has
never been greater than it is now and
it will only be needed more as each generation
is living longer. If you haven’t heard the scary
statistics, here are a few: About two -thirds
of Americans will need long-term care; The
average annual cost of a private room in a
nursing home is $87,600; the length of stay
can run three years or more. Do a few quick
calculations, and it’s easy to get very worried
about the potential fi nancial impact on your
retirement plan. But recent research is shedding
new light on the risks. The key fi nding: The
odds of needing nursing-home care may be
higher than previously thought, but the length
of needed care is shorter, with an average stay
of up to about a year and a half. The new data
has experts talking about the implications
for revamping our current approach to
insuring against the risk of high long-term
care expenses.
How much nursing-home care is being
paid for by Medicare? The Medicare program
isn’t designed to cover long-term care, but it
does cover up to 100 days of skilled nursing
care following a hospitalization. Long-term
care still should be regarded as a significant
retirement risk. Many policy experts view
long-term care as one of the most important
unsolved pieces of the nation’s health-care
puzzle and many ideas are being tossed around.
While politicians on both sides of the isle are
throwing around their solutions to supply this
need, there are some very good options out
there now. Below is one strategy but there
are many others. Call us to help analyze your
situation and offer the best solution for you.
Alternative Strategy for Long-Term Care:
One strategy is having your coverage built into
a life insurance policy, where the company
provides cash from the face value of the life
policy to cover in-home care or long-term care
costs if you incur them. This cash reduces the
benefits paid to the beneficiary. This way, you
don’t have to spend thousands of dollars on a
long- term care policy, only to pass away and
never use it. With a life policy, even if you
don’t use it, your beneficiary will get the full
life insurance payout. There are several types
of life insurance to purchase to satisfy this
need.
MEDICARE
INSURANCE
Thinking of staying on Cobra because it’s easy,
you know it, or maybe you have a spouse that’s
under 65 and they still need coverage? Think
again! Avoid the Part B Penalty! If you are
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GILROY • MORGAN HILL • SAN MARTIN
MAY/JUNE 2016
eligible for Medicare and you are planning on
retiring, be sure to follow the correct guidelines
or you may be penalized by Medicare. Once
you leave your employer’s group plan, and you
are eligible for Medicare, you must take out
Part A and Part B and pick up a Part D (drug)
plan. Medicare gives you 8 months from the
time you leave your group plan to get Part B
in place. [You should have signed up for Part
A when you turned 65, but if you did’t, then
you need to get that too.] If you pass this eight
months, then you cannot enroll in Part B until
Medicare’s General Election Period, January 1st
through March 31st, and that will give you a
Part B effective date of July 1st. Then you can
add additional coverage, also effective July 1st.
Part B Penalty: If you fall into the above
situation and you end up taking Cobra, this
is not considered creditable coverage, and
you’ll have to pay a late enrollment penalty
for as long as you have Part B. Your monthly
premium for Part B may go up 10 percent for
each full 12-month period that you could have
had Part B, but didn’t sign up for it.
UNDER 65 INDIVIDAL
HEALTH INSURANCE
If you are under 65 and you go on a Cobra
plan, in most cases you will be fi ne and you
will not have any penalty. This is considered
creditable coverage under the ACA (Affordable
Care Act) guidelines as long as that Cobra plan
meets the ACA requirements of minimum
essential coverage. Most Cobra plans meet
these guidelines, but if you are concerned,
contact the Cobra Administrator to advise
you. Be aware though, if you are mid-year and
outside of open enrollment, and you decide to
drop the Cobra plan, you cannot do that until
the next Open Enrollment period.
OPEN ENROLLMENT TIMEFRAME
NOVEMBER 1, 2016 - JANUARY 31, 2017
Cobra extends your coverage for 18 months
and if you’re offered Cal-Cobra you have
another 18 months. If you have either of
these situations and your coverage runs out
mid-year, then you will be able to get coverage
through an individual plan or through Covered
California because you’re not choosing to leave
the plan, you are losing coverage. Basically, the
coverage has run its course and is ending. This
gives you a Special Election Period and allows
you to purchase new coverage within 60 days.
If you miss the 60-day window, then you will
have to pay a penalty.
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