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Miami Herald
a day ago
- Business
- Miami Herald
Dave Ramsey has blunt words for Americans about Medicare
Upon reaching 65 years of age, Americans face multiple Medicare options, and a practical approach to tackling this challenge begins by pinpointing the most essential decisions to make. Once these priorities are clear, people can then wrestle with the remaining choices requiring attention. Dave Ramsey, the well-known personal finance expert and radio personality, underscores the complexity of Medicare's enrollment procedures, regulations, and various plan selections. He cautions people about the financial risks involved, urging them to gain a solid understanding to avoid costly mistakes. Don't miss the move: Subscribe to TheStreet's free daily newsletter Medicare is structured into distinct components, each covering specific health-care needs. Part A, the hospital insurance segment, includes coverage for inpatient hospital stays, skilled nursing facilities, hospice care, and certain home-health services. Medicare Part B, focusing on medical insurance, helps pay for doctor visits, outpatient treatments, medical supplies, and preventive care. Unlike Part A, Part B requires a monthly premium, with costs varying based on an individual's income. Medicare Part C, commonly called Medicare Advantage, serves as a private insurance alternative to Original Medicare. These plans combine Parts A and B while often offering additional benefits such as dental, vision, and hearing care. Some even include prescription-drug coverage, providing a broader health-care solution. Related: Dave Ramsey sounds alarm for Americans on Social Security Medicare Part D specifically addresses prescription-drug costs, offering financial assistance to those needing regular medications. Private insurance companies administer these plans, with different premiums, deductibles, and drug coverage lists, making careful selection critical. Ramsey emphasizes that having a clear understanding of Medicare's structure and eligibility requirements empowers Americans to make informed decisions about their health care, reducing unnecessary financial strain. Ramsey clarifies why Medicare exists and the reason it is an important part of one's retirement goals. "Medicare is the government's answer to skyrocketing health insurance costs as folks age," Ramsey wrote. He added that that, fundamentally, it is a federally run health insurance program for people over age 65 and the disabled. More on retirement: Dave Ramsey sounds alarm for Americans on Social SecurityScott Galloway warns Americans on 401(k), US economy threatShark Tank's Kevin O'Leary has message on Social Security, 401(k)s To qualify for Medicare, individuals must be either U.S. citizens or legal residents, Ramsey explained. Lawful permanent residents (LPRs) must have continuously lived in the country for at least five years before they can apply for coverage. Those who do not have legal residency status are not eligible for Medicare benefits. Medicare is funded through payroll contributions from millions of workers who pay Social Security taxes, Ramsey clarified. To ensure fairness, eligibility for certain benefits, such as premium-free coverage, is tied to work history. This prevents people who have never contributed through employment from accessing the full range of Medicare benefits without meeting specific requirements. Related: Shark Tank's Kevin O'Leary makes bold prediction on U.S. economy Ramsey describes how a stay-at-home parent can be eligible for premium-free Medicare Part A. "You can qualify off your spouse's work history - even if they've passed away or you're divorced," Ramsey wrote. But Americans have to meet a few conditions to qualify, he explains. Your marriage must have lasted at least one year before you can submit an application. If you're divorced, your marriage must have lasted a minimum of 10 years, and you must have been divorced for at least two years. If your spouse has passed away, you need to have been married for at least nine months before their death, and you must currently be unmarried. If one's work history doesn't meet the requirements, things can get a bit tricky. Even if a person does not qualify for premium-free Part A, they still have the option to purchase it by paying monthly premiums. However, if a person fits into this category, enrolling in Part B is mandatory - it's no longer something one can skip, Ramsey explains. The amount they will owe for Part A depends on how many yearly quarters they have contributed to Social Security, whereas Part B costs the same for everyone. If a person continues working and paying into Social Security, they may eventually qualify for lower Part A premiums - or even eliminate them altogether. Related: Dave Ramsey sends strong statement on Costco The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc.
Miami Herald
30-05-2025
- Business
- Miami Herald
Dave Ramsey sounds alarm for Americans on Medicare
One fundamental fact prevails and persists about Medicare: It's complicated. That said, Americans need to choose from several Medicare options, and one good place to start is to identify the highest priority tasks to understand. As a second step, one can move on to the many other lower-priority choices one must confront. Don't miss the move: Subscribe to TheStreet's free daily newsletter Dave Ramsey, the prominent personal finance author and radio host, emphasizes the complexity of Medicare's enrollment timelines, regulations, and choices. He warns individuals about a potential financial risk, encouraging them to fully understand the system to avoid unnecessary pitfalls. Medicare is divided into four distinct parts, each covering different aspects of healthcare. Part A, which covers hospital insurance, provides coverage for inpatient hospital stays, skilled nursing facility care, hospice services, and certain home health treatments. Medicare Part B, for medical insurance, helps cover expenses related to doctor visits, outpatient treatments, medical supplies, and preventive healthcare services. Unlike Part A, this portion of Medicare comes with a monthly premium, the amount of which is determined by an individual's income level. Related: Shark Tank's Kevin O'Leary sends strong message on Social Security Medicare Part C, often referred to as Medicare Advantage, is an alternative to Original Medicare and is offered through private insurance companies. These plans typically bundle coverage from Parts A and B while also providing additional benefits, such as vision, dental, and hearing care. Some Medicare Advantage plans even incorporate prescription drug coverage, creating a more comprehensive health care solution. Medicare Part D focuses solely on prescription medication costs, offering financial assistance for those who require ongoing prescriptions. These plans, administered by private insurers, come with varying premiums, deductibles, and covered drug lists, making it important to choose one that best fits individual healthcare needs. Ramsey explains that a thorough understanding of Medicare's structure - and enrollment periods - allows individuals to make informed decisions about their health care and to minimize financial burdens. Ramsey stresses that one of the most significant financial missteps individuals can make is failing to enroll in Medicare on time. He underscores the importance of keeping track of key enrollment periods, particularly the Initial Enrollment Period (IEP). Missing this window, unless one qualifies for a Special Enrollment Period (SEP), results in permanently increased premiums. This fact elevates understanding the IEP to priority number one. More on retirement: Dave Ramsey sounds alarm for Americans on Social SecurityScott Galloway warns Americans on 401(k), US economy threatShark Tank's Kevin O'Leary has message on Social Security, 401(k)s And Ramsey warns that the longer a person delays enrollment, the higher the financial penalties become. The Initial Enrollment Period is the first chance an individual has to sign up for Medicare, beginning three months before their 65th birthday and extending for three months afterward. If this timeframe is missed due to circumstances such as living abroad, a person may still be eligible for a Special Enrollment Period. Other situations that can trigger an SEP include leaving a job and losing employer-sponsored health coverage, losing equivalent prescription drug coverage, or relocating to an area where their current Medicare Advantage plan is unavailable. Ramsey emphasizes that understanding these enrollment rules is essential to avoid unnecessary financial penalties and ensure uninterrupted health care coverage. Related: Jean Chatzky warns Americans on Social Security, 401(k)s People who miss their Initial Enrollment Period (IEP) or Special Enrollment Period (SEP) still have the option to sign up for Medicare, Ramsey explains. However, he strongly advises against relying on the steps required to correct this mistake, as it can lead to significant financial consequences. Another opportunity to enroll is available during the General Enrollment Period (GEP), which occurs annually from Jan. 1 to March 31. Ramsey cautions that waiting until this time can result in a costly and long-term setback. He emphasizes that delaying enrollment to this extent is rarely a wise decision and should generally be avoided. "Using the GEP to enroll usually comes with a penalty in the form of higher premiums - and they last for the rest of your life," Ramsey wrote. The Open Enrollment Period (OEP) occurs from Oct. 15 to Dec. 7, but Ramsey clarifies that this is not meant for first-time Medicare enrollment. Instead, it allows current beneficiaries to modify their coverage, including switching plans or adjusting existing options. Additionally, the Medicare Advantage Open Enrollment Period runs from Jan. 1 to March 31, providing opportunities to change Advantage plans, revert to Original Medicare, or update prescription drug coverage. Related: Dave Ramsey sounds alarm for Americans on Social Security The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc.
Health Line
23-05-2025
- Health
- Health Line
Medicare Part C Costs
Medicare Part C (Medicare Advantage) plans are provided by private insurance companies, which means that cost varies by provider, type of plan, and location. Original Medicare (Part A and Part B) and Medicare Part C (Medicare Advantage) are different insurance options with different costs. Medicare Part C might be a good option if you're eligible for Original Medicare but want additional coverage for prescription drugs and other services. Several factors determine Medicare Part C costs, such as: premiums deductibles copayments coinsurance These amounts can range from $0 to hundreds for monthly premiums and yearly deductibles. Most of your Medicare Part C costs will be determined by your chosen plan. However, your lifestyle and financial situation can also have an effect on your costs. Read on for everything you need to know about Part C-associated costs. Deductibles and Premiums While some Part C plans don't have a monthly premium, others do. According to the Centers for Medicaid & Medicare (CMS), the average monthly premium for Part C plans is around $17.00 in 2025. Even with a zero-premium Medicare Advantage plan, you may still owe the Part B premium. That said, some Part C plans may cover your Part B premium. In addition, Medicare Part C plans have a plan deductible and a drug deductible if the plan includes drug coverage. As with premiums, some plans may offer a $0 plan deductible. When the deductible is greater than zero, you'll need to meet this amount first before your plan will offer coverage. Once it does, your plan usually covers a certain percentage of the cost; the rest comes from your pocket. as copayments or coinsurance. Managing Part C costs One of the first things you can do to manage your Medicare Part C costs is to read through the following annual notices from your plan: evidence of coverage (EOC) annual notice of change (ANOC) These notices can help you determine exactly what costs you'll pay out of pocket for your plan and any price changes that will take effect the following year. Other factors affecting costs While Original Medicare covers services nationwide, most Medicare Advantage plans are location-based. If you travel often, you may find yourself stuck with out-of-town medical bills. Other factors that can affect costs include: Plan type: Your plan can also impact how much your Medicare Part C plan may cost. For example, if you're on an HMO or PPO plan but choose to visit an out-of-network provider, this can increase your costs. Spending limit: All Part C plans have an out-of-pocket maximum. This amount varies, but according to one 2021 study, the average out-of-pocket maximum for Part C plans was $5,000. Extra benefits: Many Part C plans offer additional benefits to Original Medicare. For example, in 2025, over 97% of Medicare Advantage plans include dental, hearing, and vision coverage, though extra costs may apply for specialized services like dentures or specific lenses. Income limits Your yearly gross income can also factor into how much you'll pay for your Medicare Part C costs. For people with a lack of income or resources, there are programs that can help lower their Medicare costs. These are called Medicare Savings Programs (MSPs). The federal government funds these programs, but Medicaid administers them in each state. These programs are: Medicare Part C plans have different costs. Your costs may vary depending on your coverage, plan type, and whether you receive additional financial assistance. Below is a small sample of Medicare Part C plan costs from major insurance providers in cities around the United States: Plan City Monthly premium Health deductible, drug deductible Primary doctor copay Specialist copay Out-of-pocket max Anthem Select (HMO-POS) Los Angeles, CA $0 $0 $0 in network $0 in network $800 in network Cigna Preferred Medicare (HMO) Denver, CO $0 $0 $0 $25 per visit $3,550 in network Humana Choice H5216-006 (PPO) Dane, WI $37 •$0 •$250 $0 in network $45 in network per visit •$4,900 in network •$10,100 in and out of network Humana Gold Plus H0028-042 (HMO) Harris, TX $0 •$0 •$300 $0 $20 $3,450 in network Aetna Medicare Value Plus (PPO) Nashville, TN $11 •$0 •$250 •$0 in network •$10 out of network •$35 in network •$45 out of network •$6,750 in network, •$7,750 in and out of network Kaiser Permanente Medicare Advantage Standard MD (HMO-POS) Baltimore, MD $21 $0 •$5 in network •$0 to 25 out of network •$25 in network •$0 to 50 out of network $6,900 in network The estimates above are for 2025 and are only a sampling of the many plan options offered in each area. For a more personal estimate of Medicare Part C plan costs based on your individual healthcare situation, visit this plan finder tool and enter your ZIP code to compare plans near you. Is Medicare Advantage more expensive than Original Medicare? While it may seem that Medicare Advantage plans cost more than Original Medicare, they can actually help reduce medical expenses. A 2017 study that compared Medicare Advantage to Original Medicare found that physician costs were lower for people who were enrolled in Medicare Advantage plans. In addition, Medicare Advantage plan beneficiaries saved more money on things like medical equipment and lab tests. How do I pay my Part C bill? Most companies offering Medicare Part C plans have various ways to pay your premium. These options include: online bill payment automatic withdrawal from your bank account automatic withdrawal from your Social Security or Railroad Retirement Board benefits check check or money order Help paying for Medicare If you're having trouble paying your Medicare Part C costs, there are resources that can help: Medicaid: This program helps people with low-income pay for medical costs. Medicare savings program (MSP): This benefit helps Medicare beneficiaries with low-income pay plan costs, such as premiums and copayments. Supplemental Social Security: Some individuals can apply for Supplemental Social Security benefits, which are monthly payments that help pay for Medicare costs. PACE: This program can help you get coordinated care within your local community. Extra Help: If you meet certain income and resource limitations, you may qualify for this Medicare program, called Extra Help, to pay for prescription drug costs, premiums, deductibles, and more. The takeaway Medicare Part C (Medicare Advantage) is a great coverage option for Medicare beneficiaries seeking additional coverage. Your Medicare Part C costs include premiums, deductibles, copayments, and coinsurance. Your costs will also be determined based on your plan type, how often you need medical services, and what type of doctors you see. If you're age 65 or older or have certain disabilities, you're eligible to apply for Medicare. Visit the Social Security Administration website for more information on how to apply and enroll. The information on this website may assist you in making personal decisions about insurance, but it is not intended to provide advice regarding the purchase or use of any insurance or insurance products. Healthline Media does not transact the business of insurance in any manner and is not licensed as an insurance company or producer in any U.S. jurisdiction. Healthline Media does not recommend or endorse any third parties that may transact the business of insurance.
Yahoo
20-02-2025
- Business
- Yahoo
I Plan to Withdraw $110k From My 401(k) This Year. Will This Cause My Medicare Premiums to Go Up?
SmartAsset and Yahoo Finance LLC may earn commission or revenue through links in the content below. Your 401(k) withdrawals can affect how much you spend on Medicare. While few households pay premiums for Medicare Part A, most households do pay premiums for Medicare Part B and Part D. These premiums are based in significant part on your taxable household income. If your income goes up, such as by making a withdrawal from a taxable retirement account, your premiums can increase too. The good news is that your premiums are recalculated each year, so if your income goes back down your premiums will too. For example, say that you plan on withdrawing an additional $110,000 from your 401(k) this year. This would almost certainly cause your Medicare premiums to temporarily increase, but not necessarily right away. Here are some things to know. Consider speaking with a fiduciary financial advisor for specific guidance. You can use to match and speak with vetted advisors for free. Medicare is a government health care program for Americans age 65 and older. There are four parts to this program, Parts A through D. Each part has a different cost structure: Medicare Part A: No costs for most households. A flat monthly premium, typically either $285 or $518, for households that do not have enough working credits to qualify for free Medicare. Medicare Part B: Monthly premiums that range between $185 and $628.90 based on household income. Medicare Part C: Monthly premiums based on the individual plan that you choose. Medicare Part D: Monthly premiums based on the individual plan that you choose, with an additional surcharge that ranges from $0 to $85.80 based on your household income. As with all government programs, these numbers are periodically updated to reflect inflation. These numbers are accurate as of 2025. Medicare Part A typically has no costs. Medicare Part C is a public-private partnership in which households buy private insurance with Medicare funding. The premiums under this program are based on the individual plan that you select. Medicare Part B and Part D each have monthly premiums that can increase based on your annual income. For Part B and Part D, premiums are calculated based on a concept called IRMAA, or "Income-Related Monthly Adjustment Amount." This is the index for how Medicare adjusts your monthly premiums based on your annual taxable income. In 2025, the IRMAA for Part B is as follows: Below $106,000 Single/$212,000 Joint: Monthly Premium $185.00 Between $106,001 and $133,000 Single/$212,001 and $266,000 Joint: Monthly Premium $259.00 Between $133,001 and $167,000 Single/$266,001 and $334,000 Joint: Monthly Premium: $370.00 Between $167,001 and $200,000 Single/$334,001 and $400,000 Joint: Monthly Premium: $480.90 Between $200,001 and $500,000 Single/$400,001 and $750,000 Joint: Monthly Premium: $591.90 Above $500,001 Single/$750,000 Joint: Monthly Premium: $628.90 For Medicare Part D, you pay a monthly premium based on the plan you select. You might then pay an additional surcharge based on your income. In 2025, the IRMAA for Part D is as follows: Below $106,000 Single/$212,000 Joint: Monthly Addition $0 Between $106,001 and $133,000 Single/$212,001 and $266,000 Joint: Monthly Addition $13.70 Between $133,001 and $167,000 Single/$266,001 and $334,000 Joint: Monthly Addition $35.30 Between $167,001 and $200,000 Single/$334,001 and $400,000 Joint: Monthly Addition $57.00 Between $200,001 and $500,000 Single/$400,001 and $750,000 Joint: Monthly Addition $78.60 Above $500,001 Single/$750,000 Joint: Monthly Addition $85.80 The IRMAA is calculated annually based on a two-year lookback, meaning that each year your Medicare premiums are based on your income from two years ago. So, for example, in 2025 your premiums would be based on your taxable income from 2023. In 2026, your premiums would be based on your taxable income from 2024. This formula uses what's called a "MAGI," or "Modified Adjusted Gross Income." An MAGI is your AGI, or "Adjusted Gross Income," modified by specific requirements of a given program. In the case of Medicare, an MAGI means your basic taxable with tax-exempt interest, some non-taxable Social Security benefits, and some deductions included. For most households, Medicare's MAGI will be similar, if not identical, to their standard taxable income. This will include all taxable sources of income, so Medicare premiums are affected by factors such as your Social Security benefits, all pre-tax portfolio withdrawals and all taxable portfolio withdrawals. Medicare premiums are not affected by Roth IRA or Roth 401(k) withdrawals. Consider speaking with a financial advisor for help integrating the elements of your retirement plan. In a word, yes. Unless you are at the top of the IRMAA brackets, an additional $110,000 in taxable income will almost always increase your Medicare Part B and Part D premiums. Exactly how much will depend on your underlying income and your marital status. For example, say that you are an individual with a combined $75,000 income from Social Security benefits and portfolio withdrawals. An additional $110,000 would push your total income to $185,000. This would increase your Medicare Part B premiums from $185 to $480.90 per month. It would increase your Part D surcharge from $0 to $57. Or, say that you're a married couple with a combined $200,000 income from benefits and portfolio withdrawals. An additional $110,000 would push your total income to $310,000. This would increase your Medicare Part B premiums from $185 to $370. It would increase your Part D surcharge from $0 to $35.30. The good news here is that, depending on your financial plans, this fluctuation may only be temporary. First, these premium increases will not take effect for two years. If you withdraw this money in 2025, for example, you have until 2027 to save up for those price hikes. Second, if this is a temporary withdrawal then it will be a temporary increase. If you return to your normal rate of withdrawals in 2026, then your premiums will go back down in 2028. However, if you continue to withdraw an additional $110,000 per year from your 401(k), your prices will remain higher. The right financial advisor can help you build and navigate your personal retirement strategy. Your Medicare premiums are based on your annual income. This is calculated with a two-year lookback, and if you aren't careful this price hike can surprise you. Do not forget the things Medicare doesn't cover. There are many healthcare issues, particularly long-term care, that Medicare simply leaves un-covered. As you prepare for retirement, make sure that you look into the kind of gap and long-term care insurance that will pay for this kind of care. Finding a financial advisor doesn't have to be hard. SmartAsset's free tool matches you with vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you're ready to find an advisor who can help you achieve your financial goals, get started now. Keep an emergency fund on hand in case you run into unexpected expenses. An emergency fund should be liquid — in an account that isn't at risk of significant fluctuation like the stock market. The tradeoff is that the value of liquid cash can be eroded by inflation. But a high-interest account allows you to earn compound interest. Compare savings accounts from these banks. Are you a financial advisor looking to grow your business? SmartAsset AMP helps advisors connect with leads and offers marketing automation solutions so you can spend more time making conversions. Learn more about SmartAsset AMP. Photo credit: © The post I Plan to Withdraw $110k From My 401(k) This Year. Will This Cause My Medicare Premiums to Go Up? appeared first on SmartReads by SmartAsset.
