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Wednesday, August 30, 2017

How Medicare Part D Works

In advance of our Community Education Medicare Seminar coming up on September 14th, we wanted to provide a foundation for your questions.  We've compiled some excerpts from an AARP article by Patricia Barry to give you an understanding of some of the basics of Medicare Part D.  Be sure to join us September 14th at 2pm at the Broadus Community Center for our free seminar!

Before deciding whether to sign up for Medicare prescription drug coverage, you need to understand how the program works together as a whole. Grasping the big picture makes it easier to deal with the details.

Who can get Medicare drug coverage?
Anyone on Medicare (with either Part A or Part B) is entitled to drug coverage (known as Part D) regardless of income. No physical exams are required. You cannot be denied for health reasons or because you already use a lot of prescription drugs.

How do I get Medicare prescription drug coverage?
You must enroll in one of the private insurance plans that Medicare has approved to provide it. Wherever you live, you can get drug coverage in one of two ways:

  • Through a “stand-alone” plan (PDP) that offers only drug coverage. This type is mainly intended for people who choose to receive their other health benefits from the traditional Medicare fee-for-service program.
  • Through a Medicare Advantage plan (MA-PD) that covers both medical services and prescription drugs. This type is for people who choose to receive all their Medicare benefits in one package, usually through a health maintenance organization (HMO) or a preferred provider organization (PPO).
What will my premium be?
There is no single monthly premium for Part D prescription drug coverage. Each drug plan sets its own premium for each calendar year. Some Medicare Advantage plans do not charge an extra premium for drug coverage.

Do drug plans vary much?

Yes. There are big differences in premiums and deductibles, in the range of drugs that plans cover, the co-pays they charge and the pharmacies they use. In particular, co-pays vary enormously among different plans, even for the same drug. To determine exact costs and benefits, it is important to carefully compare plans in your area (see Choosing a Part D Drug Plan).

What will I pay for my drugs?
You could pay a different price for the same drug according to the phase of coverage that you’re in at any point during the year.

  • Deductible: If your plan has a deductible, you pay full price for your drugs until the deductible amount is met and coverage kicks in. “Full price” means the price your plan has negotiated with each drug’s manufacturer. This price may be less that you would pay retail at the pharmacy.
  • Initial coverage period: Your share of each prescription is either a flat co-payment (for example, $20) or a percentage of the drug’s cost (for example, 25 percent). Most plans have three or four levels (known as “tiers”) of co-pays, rising in price from the least expensive generic drugs through “preferred” brand-name drugs to “non-preferred” brands and finally to specialty or high-cost drugs.
  • Coverage gap (“doughnut hole”): In 2017 you pay 40 percent of your plan’s price for brand-name and biologic drugs in the gap and 51 percent for generics. Fifty percent of the discount for brand drugs is provided by their manufacturers; the rest of the discount for brand drugs and the whole discount on generics is provided by the federal government. If your plan provides any coverage in the gap, these discounts are applied to your remaining costs.
  • Catastrophic level of coverage: Your share of each prescription is about no more than 5 percent of the cost of the drug. You would also pay a different price if you receive Extra Help or have additional coverage from elsewhere (such as retiree drug benefits or assistance from a state pharmacy assistance program).

What if I join Medicare and enroll in a Part D plan partway through the year?
The cycle of coverage follows the same order (deductible, initial coverage period, coverage gap, catastrophic coverage), starting when you join the plan. There is no reduction in the deductible (if your plan has one) if you start partway through the year.

Will I be able to get all the drugs I take now?

Maybe, but not necessarily. Each plan has a list of preferred drugs it covers, known as a formulary. No Part D plan covers every prescription drug. A plan must cover at least two drugs in each class of drugs used to treat the same medical condition. It must also cover nearly all drugs used in six classes: antidepressants, antipsychotics, anticonvulsants, antiretrovirals (for HIV/AIDS), immunosuppressants (for transplants) and anticancer drugs. But a few drugs are excluded from Medicare coverage by law.

Plans are allowed to change some of the drugs they cover during the year. If this affects a drug you are using, your plan must inform you of the change at least 60 days in advance, unless it has been withdrawn from the market for safety reasons.

You have the right to ask your plan to cover a drug not on its formulary by requesting an “exception” to its policy (also known as a “coverage determination”) if your doctor can show that a non-formulary drug is necessary for your health.

What about drugs that are covered by Medicare Part B?
Medicare Part B generally continues to pay for drugs it covered before Part D began — usually those that are administered at a hospital or doctor’s office. In some cases, the same drugs are covered by either Part B or Part D according to different circumstances. In this case, your Part D plan may contact you or your doctor to verify the circumstances in order to decide whether payment should be made by Part B or D.

How often can I switch drug plans?
You can normally change plans only once a year during annual open enrollment, which runs from Oct. 15 to Dec. 7.

There are exceptions. In some circumstances—for example, if you move out of your plan’s area or your plan ceases services in your area, or you move into or out of a nursing home—you’re entitled to a special enrollment period (SEP) so that you can change drug plans during that time. People with limited incomes who receive Extra Help can switch to another plan at any time during the year. For a full list of circumstances, see the Medicare Rights Center’s guidance on special enrollment periods.

Wednesday, August 23, 2017

Finding Your Way in the Medicare Maze

Every year, thousands of individuals approaching their 65th birthday come face to face with the “Medicare maze.”  The program itself, the enrollment process, and the decisions involved can be difficult to navigate and many people quickly find themselves overwhelmed.  Recognizing that this is an issue facing many people in our community, Gardner & Billing CPAs and Dixie Rogers Insurance are working together to present a Community Education Medicare Seminar.  The FREE seminar will take place on September 14th, 2017 at 2:00pm in the Broadus Community Center.  Refreshments will be provided and everyone is welcome to attend for a special presentation by Dixie Taylor Rogers, “Finding Your Way in the Medicare Maze.”

Dave Gardner, owner and partner of Gardner & Billing CPAs, describes his motivation for organizing this event.  "As I have made my way through the process of learning about supplemental health insurance and drug insurance coverage, it is clear there is more to it than I thought!  Knowing that a lot of our community was of the same ‘vintage’ as me, an informational session seemed to make sense.  I approached Dixie with the idea and was impressed by her depth of knowledge on the subject, as well as her ability to communicate it.”

Dixie Taylor Rogers is the daughter of Francis and Thelma Taylor, of Broadus, MT.  Initially, Dixie worked in retail, selling cowboy boots and hats in Billings; but after receiving a Marketing degree from MSU Billings, Dixie started in health insurance sales at Mutual of Omaha.  She and her family later moved to Boise, ID where she spent the next 16 years at Blue Cross of Idaho in Medicare and non-Medicare health insurance sales.  For the past three years, Dixie has been the owner/agent of her own agency, Dixie Rogers Insurance Services.  Dixie says, “After 20 years in the health insurance business, I’m still learning as I go and working to keep up with the constant changes that come about, but in short, I love what I do.  It’s the people who make my job interesting and fun.  Helping someone find the right insurance plan is very satisfying.” Dixie is a licensed independent Medicare agent in Montana and Idaho, representing multiple insurance companies. 

This Medicare seminar will be especially relevant to those individuals approaching 65 years of age who will be enrolling in Medicare for the first time.  Among the biggest Medicare misconceptions are the cost of coverage (it’s not actually free!) and the expectation that you will be automatically enrolled or notified when you become eligible.  This is not necessarily the case, so many people find themselves unprepared when the time comes.  You become eligible to enroll in Medicare during the three months prior to your 65th birthday, the month you turn 65, and the three months following the month you turn 65. This period is known as the initial enrollment period, or IEP.  If you miss this IEP, you could face a delay in coverage and additional costs. 

In addition to the enrollment process, the seminar will also cover topics which would be relevant to individuals already enrolled, including what is and isn’t covered by Medicare.  Many people are surprised to discover that Medicare doesn’t actually cover all your healthcare costs.  Purchasing a Medicare Supplement plan can help close the gap between Medicare coverage and out-of-pocket costs.  If you’re approaching 65, your mailbox is probably already FULL of advertisements pushing these private supplement plans that all look the same.  The presentation should provide some general plan comparison in order to help people feel informed and to understand their needs, without the feeling of “high pressure sales.” 

So, whether you’re lost in the Medicare maze or you just want a free cookie, you’re invited to attend the Community Education Medicare Seminar co-hosted by Gardner & Billing CPAs and Dixie Rogers Insurance Services, held on September 14th at 2pm in the Broadus Community Center.  For more information on this event, contact Gardner & Billing CPAs. 

Wednesday, August 16, 2017

After the Fair...

Gardner & Billing CPAs would like to extend our congratulations to all the winners at this year's Powder River County Fair!  Thank you to all those who participate, organize and attend!

Monday, August 7, 2017

2017 Powder River County Fair Schedule

Check out the schedule of events taking place this week August 10th - 12th for the Powder River County Fair!

We would like to extend our thanks to everyone that participates to make the fair possible.


Thursday, August 3, 2017

Starting a New Business Part 5: Types of Business Entities

The type of business entity you choose will depend on three primary factors: liability, taxation and record-keeping. Here's a quick look at the differences between the most common forms of business entities:
  • A sole proprietorship is the most common form of business organization. It's easy to form and offers complete managerial control to the owner. However, the owner is also personally liable for all financial obligations of the business.
  • A partnership involves two or more people who agree to share in the profits or losses of a business. A primary advantage is that the partnership does not bear the tax burden of profits or the benefit of losses.  Profits or losses are "passed through" to partners to report on their individual income tax returns. A primary disadvantage is liability. Each partner is personally liable for the financial obligations of the business.
  • A corporation is a legal entity that is created to conduct business. The corporation becomes an entity separate from those who founded it that handles the responsibilities of the organization. Like a person, the corporation can be taxed and can be held legally liable for its actions. The corporation can also make a profit. The key benefit of corporate status is the avoidance of personal liability. The primary disadvantage is the cost to form a corporation and the extensive record-keeping that's required. While double taxation is sometimes mentioned as a drawback to incorporation, the S corporation (or Subchapter corporation, a popular variation of the regular C corporation) avoids this situation by allowing income or losses to be passed through on individual tax returns, similar to a partnership.
  • A hybrid form of partnership, the limited liability company (LLC) , is gaining in popularity because it allows owners to take advantage of the benefits of both the corporation and partnership forms of business. The advantages of this business format are that profits and losses can be passed through to owners without taxation of the business itself while owners are shielded from personal liability.
Coming up we'll give a more in-depth examination of the pros and cons of each entity type.