Articles for Financial Advisors

Medicare 2013

Medicare 2013

Medicare Parts A and B cover hospitalization and doctor visits for most people age 65 and older. A supplemental plan called Medigap covers the 20% of costs not covered by Part B. For 2012, the typical Part B monthly premium is $100, down from $115 in 2011. Part B premiums ranged from $40 to $220 a month (those with incomes > $214K). Starting in 2013, the Medicare payroll tax will increase from $1.45% to $2.35 on incomes above $200,000 for individuals ($250K for married couples). Under the Affordable Care Act, Medicare benefits increased and now include the following: free annual checkups and preventive care and large discounts on prescription drugs for Medicare recipients who are part of the “donut hole.”


Lowering Costs

There is an annual Medicare enrollment period that ends each year in early December. This is a good time to reevaluate Medicare coverage, especially for those who are paying high fees. Only about 15% of Medicare recipients review their coverage each year. There are several types of coverage that could be subject to change: [1] instead of using Medicare Parts B and D, your client may consider a Medigap policy (Part C), [2] there are 10 different drug plans under Part D, and [3] Medicare premiums are based on each year’s modified adjusted gross income (MAGI). A chart listing the brackets and premiums can be found in the Social Security Administration’s publication, Medicare Premiums: Rules for Higher-Income Beneficiaries. Capital gains and the conversion of a traditional IRA into a Roth IRA are not counted when MAGI is computed for Medicare premium purposes.

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