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Here’s what you should know about Florida Blue Medicare Advantage.
Florida Blue Medicare Advantage pros and cons
Florida Blue’s offerings have advantages and disadvantages.
Pros
-
Members give high marks: Member experience ratings on metrics like customer service and getting needed care are above the average for major providers.
-
Mix of plans: Florida Blue offers both HMO and PPO plans, giving members more options for care.
Cons
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Below-average star ratings: Florida Blue Medicare Advantage plans score slightly below the industry average star rating from CMS — 3.74 for 2024 plans versus 4.04 for the industry as a whole.
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Limited availability: Florida Blue offers Medicare Advantage plans in Florida only.
Florida Blue Medicare star ratings
Average star rating, weighted by enrollment: 3.74
The Centers for Medicare & Medicaid Services maintains star ratings for Medicare Advantage plans on a 5-point scale, ranking plans from best (5 stars) to worst (1 star). The agency bases these ratings on plans’ quality of care and measurements of customer satisfaction, and ratings may change from year to year.
Based on the most recent year of data and weighted by enrollment, Florida Blue’s 2024 Medicare Advantage plans get an average rating of 3.74 stars
.
For comparison, the average star rating for plans from all providers is 4.04
.
What does Florida Blue Medicare Advantage cost?
Costs for Medicare Advantage plans depend on your plan, your geographic location and your health needs.
Premiums
One of the costs to consider is the plan’s premium. In 2024, about two-thirds of Florida Blue Medicare Advantage plans (65%) that aren’t special needs plans (SNPs) have a $0 premium
.
Even as a Medicare Advantage user, you’ll still be responsible for paying your Medicare Part B premium, which is $164.90 per month in 2023 ($174.70 in 2024)
, although some plans cover part or all of this cost. (Most people pay this standard amount, but if your income is above a certain threshold, you’ll pay more.)
Copays, coinsurance and deductibles
Requirements for copays, coinsurance and deductibles vary depending on your plan, location and the services you use. Other out-of-pocket costs to consider include:
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Whether the plan covers any part of your monthly Medicare Part B premium.
-
The plan’s yearly deductibles and any other deductibles, such as a drug deductible.
-
Copayments and/or coinsurance for each visit or service. For instance, there may be a $10 copay for seeing your primary doctor and a $45 copay for seeing a specialist.
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The plan’s in-network and out-of-network out-of-pocket maximums.
-
Whether your medical providers are in-network or out-of-network, or how often you may go out of network for care.
-
Whether you require extra benefits, and if the plan charges for them.
To get a sense of costs, use Medicare’s plan-finding tool to compare information among available plans in your area. You can select by insurance carrier to see only Florida Blue plans or compare across carriers. You can also shop directly from Florida Blue’s website by entering your ZIP code.
Available Medicare Advantage plans
There are a few kinds of Florida Blue Medicare Advantage plans, and they vary in terms of structure, costs and benefits. Florida Blue offers Medicare Advantage prescription drug plans (MAPDs) as well as Medicare Advantage plans without drug coverage. Florida Blue also offers Medicare Part D prescription drug plans.
Plan offerings include the following types:
A health maintenance organization (HMO) generally requires that you use a specific network of doctors and hospitals. You may need a referral from your primary doctor in order to see a specialist, and out-of-network benefits are usually very limited.
HMO-POS plans
HMO point of service (POS) plans are HMO plans that allow members to get some out-of-network services, but they’ll pay more for those services.
Preferred provider organization (PPO) plans provide the most freedom, allowing you to see any provider that accepts the insurance. You may not need to choose a primary doctor, and you don’t need referrals to see specialists. You can seek out-of-network care, although it may cost more than seeing an in-network doctor.
Special needs plans (SNPs) restrict membership to people with certain diseases or characteristics. Hence, the benefits, network and drug formularies are tailored to the needs of those members. Florida Blue offers one type of SNP:
-
Dual-Eligible SNP: For people who are entitled to Medicare and who also qualify for assistance from a state Medicaid program.
Florida Blue Medicare Advantage service area
Florida Blue offers Medicare Advantage plans in Florida only and covers about 185,000 members
.
Compare Medicare Advantage providers
Get more information below about some of the major Medicare Advantage providers. These insurers offer plans in most states. The plans you can choose from will depend on your ZIP code and county.
Find the right Medicare Advantage plan
-
What are the plan’s costs? Do you understand what the plan’s premium, deductibles, copays and/or coinsurance will be? Can you afford them?
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Is your doctor in-network? If you have a preferred medical provider or providers, make sure they participate in the plan’s network.
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Are your prescriptions covered? If you’re on medication, it’s crucial to understand how the plan covers it. What tier are your prescription drugs on, and are there any coverage rules that apply to them?
-
Is there dental coverage? Does the plan offer routine coverage for vision, dental and hearing needs?
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Are there extras? Does the plan offer any extra benefits, such as fitness memberships, transportation benefits or meal delivery?
Source: nerdwallet.com
Apache is functioning normally
Inside: Are you finding yourself struggling to cover unexpected expenses? This guide will teach you how to create a financial plan and budget that will help you avoid costly surprises.
Life is full of surprises, and not all of them are pleasant. Sometimes, these surprises come in the form of unexpected expenses, hitting when one least expects them.
This can leave you devasted financially. Over the years, we have been slapped with unplanned costs and left scrambling.
However, you can successfully navigate through the rollercoaster ride of money management.
The key is knowing “What are unexpected expenses?’ Along with the knowledge equips you to avoid or mitigate them.
This post may contain affiliate links, which helps us to continue providing relevant content and we receive a small commission at no cost to you. As an Amazon Associate, I earn from qualifying purchases. Please read the full disclosure here.
What are Unexpected Expenses?
In the realm of personal finance, unexpected expenses are costs you haven’t foreseen or budgeted for. They strike out of nowhere, leaving you scrambling to balance your finances.
These expenses differ from other cost categories such as fixed expenses (weekly, monthly, and recurring costs like rent) and variable expenses (those that do not happen regularly but vary in cost like groceries).
The crux lies in not being able to anticipate these unplanned expenses, making them disruptive to financial plans.
What is an example of unplanned spending?
Unplanned spending often occurs when there’s an unforeseen event that demands immediate financial attention.
Picture this scenario: You take your car for a routine inspection; however, the car fails the inspection due to a defective part that needs immediate repair. Initially, you hadn’t allocated funds for this, but now you have to deal with this unforeseen cost – a classic case of unplanned spending.
Common Examples of Unexpected Expenses
Unforeseen financial events can leave many unprepared and struggling, adding unnecessary stress. This section will delve into examples of typical unexpected expenses that individuals often encounter, providing key insights into how to efficiently incorporate these into your financial plan.
By understanding and preparing for these unexpected expenses, one can effectively mitigate the surprise factor they pose, promoting a healthier and more secure financial state.
We have overcome many times and you can too!
1. Medical Emergencies and Healthcare Costs
Medical emergencies are prominent examples of unexpected expenses. Even with health insurance, costs can amass, thanks to high deductibles, co-payments, and therapies not covered by insurance.
One factor is paying for the medical costs, but the other weighing factor is loss of income when dealing with medical emergencies or critical diseases like cancer.
Overcome this by:
- Contributing the max each year to your Health Savings Account (HSA). This way you have a bucket of money just for medical expenses.
- Look into short-term disability insurance that can cover part of your lost wages while you can’t work.
2. Automatic Home or Vehicle Repair Needs
Home and vehicle repairs often sneak up as unexpected expenses. Time, accidents, natural disasters — all can cause wear and tear that demands immediate repair. The consequences of ignoring these repairs can be hefty.
Similarly, significant home repairs such as fixing a faulty HVAC system or leaky roof can set you back by thousands of dollars.
Overcome this by:
- Be proactive with routine maintenance. Take care of your house and car before problems escalate.
- Save the same amount each month for home and vehicle repairs separately.
Personally, we save $100 monthly for car repairs as one is a beater car. This amount will be increased to $350 to start saving for a new car. Conversely for home repairs, we keep a minimum of $1000. This amount will fluctuate depending on when we last did a major repair. Since we just replaced our HVAC, our funds are lower.
3. Natural disasters
Natural disasters, such as hurricanes, earthquakes, wildfires, and floods, lead to unexpected spending. The impact of these events can cause significant damage to homes, cars, and other property, leading to repair and replacement costs.
Furthermore, these situations might also necessitate expenses for emergency supplies, temporary shelter, and other necessities. For instance, Hurricane Katrina inflicted a staggering $196.3 billion in damage, illustrating the overwhelming cost of such unpredictable events.1
Overcome this by:
- Make sure you have proper insurance whether it is renter insurance or flood/wildlife insurance. Also, make sure you have the proper amount of insurance. As highlighted by the Marshall Fire where most people were underinsured. 2
- Storing cash on hand at home in case of an emergency. A cushion of money will always be helpful.
4. Increase in Bills
Monthly bills are a constant in our lives, but what’s not constant is their amount. Landlords may raise the rent when leases are up for renewal, utility companies could increase their rates, and insurance premiums may also inflate periodically.
All these scenarios lead to higher monthly expenses. For example, the U.S. energy costs per household rose by 13% in 2022 reaching the highest percentage increase since it was measured. 3
Being unprepared for these increases can cause significant financial strain.
Overcome this by:
- Get one month ahead on your bills. Then, you will start building a cushion. Also, known as aging your money – thanks to YNAB.
- Be proactive and realize that with inflation high. All of your bills will likely increase in cost.
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- Superior synchronization skills make it the winner in this area.
- YNAB has extra features like goal setting for budgeting, shared budgeting tools for partners.
- Option to manually add and upload transactions from accounts each month.
- YNAB prioritizes user privacy.
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5. Overlooked Taxes
Overlooked taxes pose another source of unexpected expenditure.
A higher than expected tax bill can indeed surprise and unbalance your budget. This happened to my friend when she started her own fitness coaching business.
Uncertainties in estimating the exact tax amount, mathematical errors in filing, or an overlooked quarterly tax payment often culminate in an escalated tax bill. An audit from the IRS, though it may find no additional taxes owed, can lead to expensive fees from a CPA or tax attorney.
Overcome this:
- Use a tax calculator to know what your estimated tax payment due.
- Understand the common reasons you may owe higher taxes this year.
6. Pet Emergencies
Pet emergencies can bite a large chunk out of your budget without warning. For instance, if your cat suddenly starts having seizures or your dog gets hit by a car, the medical costs associated can spiral rapidly.
Emergency vet care can range between a few hundred dollars to several thousand dollars. For instance, a poisoning can range from $200-$3000. 4
Overcome this by:
- Prevention methods like pet insurance can help you manage these costs effectively.
- Decide in advance the maximum you are willing to spend on emergency vet care.
7. Delayed payments
Delayed payments may not be an external expense, but the repercussions can be just as financially challenging. This affects your income stream, potentially leading to difficulty in managing your financial obligations.
For example, if an employer goes bankrupt, salaries might be delayed or even indefinitely withheld. According to research, late payments can cost businesses $3 trillion globally, affecting both personal financial planning and business operations.5
This is a highly stressful situation.
Prepare yourself financially by:
- Aging your money. By getting one month ahead of your bills, you can scrap through a delayed payment. YNAB coined this term.
- Start saving for a large rainy day fund.
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8. Gifts and Special Occasions
Commemorating special occasions can lead to unexpected expenses. Life events such as birthdays, weddings, baby showers, and retirements, traditionally require gift-giving.
While typical gift giving on Christmas or birthdays should be part of your planned variable expenses. Saying yes to being a bridesmaid can definitely set you back a few thousand dollars. These are costs that we often fail to factor into our budgets.
Overcome this by:
- Setting aside money monthly to cover gifts and special occasions.
- If saying yes to a special event will hamper your finances, then you may have to politely decline the invitation.
9. Unexpected Travel Costs
Unexpected travel costs can significantly impact your budget, particularly when they arise from unplanned events such as attending a funeral or a wedding. The costs of last minute travel can vary widely depending on the destination, distance, and mode of transportation.
To manage these expenses, consider driving or taking public transportation for shorter trips, exploring less expensive lodging options, and creating a meal plan that limits dining out.
Overcome this by:
- Setting aside a regular amount in a travel fund can help prepare for these unexpected costs that tend to crop up every year.
- Decide if taking the unplanned trip is something you can feasibly manage with your current financial situation.
10. What You Forget to Budget for
Some subtle but regular expenses often sneak past our budget plans. This is why we have a full list of budgeting categories so hopefully, you don’t miss anything!
Consider online subscriptions and memberships: Many services offer free trials, but the charges kick in if not canceled. Other overlooked budget items may include pet care, parking fees, and toll fills—small amounts that may seem insignificant but can considerably dent your budget over time.
Overcome this by:
- Review your checking account and credit card bills to see all of your expenses for the past year. Write down those unexpected expenses that came through.
- Now, make a plan for how to spend your money in advance with your findings.
This helps you prepare for unexpected expenses
Here are simple tips to make sure you employ the habits of a financially stable person.
Tip #1 – Building an Emergency Fund
Building an emergency fund is a fundamental strategy to brace for unexpected expenses. This fund acts as a financial buffer, providing the economic security to cover unexpected costs without tapping into monthly budgets or savings aimed at other goals.
As a starting point, aim to save $1000 and then work your way up to save a month’s paycheck. Start small and build over time – every penny set aside helps to mitigate future financial stress.
Tip #2 – Properly Utilizing Sinking Funds
Sinking Funds are a sagacious tactic to prepare for larger, infrequent expenses. They allow you to systematically and gradually save up for anticipated financial obligations such as vacations, holiday gifts, car maintenance, etc.
By assigning a specific amount to save each month, by the time the need arises, you’ll have a pool of money ready. With platforms like YNAB, creating sinking funds becomes easier, letting you monitor your progress month by month.
This is how we have less frequent unplanned costs than we did in our 20s.
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Tip #3 – Saving for the Larger Rainy Day
Beyond smaller emergency funds and sinking funds, saving for the ‘larger rainy day’ is a crucial tactic to avoid financial duress caused by unexpected expenses. This refers to padding your savings to cover larger, more substantial financial shocks that might require more than just a few months’ worth of expenses.
It may take time to build such a fund, but even a small contribution each month can result in substantial savings over time.
Tip #4 – Pick up a Side Hustle
One way to strengthen your financial resilience against unplanned expenses is to start a side hustle. This could mean picking up extra shifts at work, selling handcrafted items online, or using skills like photography or writing for freelance work.
With the rise of the internet, making money online is really easy and simple to get started. We have a few side hustles to shield against unforeseen costs.
Tip #5 – Budget Properly and Stick to It
Budgeting is an essential line of defense against unexpected expenses. By tracking your income and comparing it against both predictable and variable expenses, you can calculate how much money can be saved each month.
Regular budget check-ins help ensure you’re staying on track, steadying your financial footing.
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Tip #6 – Regular Review of Financial Plans
Regularly reviewing and updating your financial plans can serve as a preventative measure against unexpected expenses. Consider changes in income, expenses, and lifestyles, and adjust your savings and spending plans accordingly.
Tip #7 – Utilizing Digital Banking Features for Money Management
Digital banking tools have revolutionized financial management and can be part of a robust strategy to avoid unexpected expenses.
Features such as instant account balance checking, transaction alerts, set-and-forget savings transfers, budgeting tools, and proactive spending categorization help you grasp where your money is and how it’s being spent.
Tools to Ward Off Unexpected Expenses and Not Go into Debt
Unexpected expenses are inevitable, yet going into debt to cover these costs can lead to financial strain due to accumulated interest and fees.
Here are crucial steps in preventing unexpected expenses from turning into debt.
Dealing smartly with Credit Cards options
Credit cards can serve as a lifeline during a financial crunch but should be employed judiciously.
To smartly deal with unexpected expenses, consider options like 0% or low-interest credit card offers – these are particularly useful if you can pay off the balance during the introductory period. But tread with caution: high-interest rates can cause difficulties if you can’t pay off the balance in time.
Profit from Asking for a Paycheck Advance
In times when emergency expenses arise, asking for a paycheck advance can help. Some employers offer this as part of their policy to assist employees dealing with abrupt financial needs. A salary advance allows you to ‘borrow’ from your future earnings and repay the amount through future pay deductions.
Budgeting apps like Chime not only help in tracking expenses, but they also enable early access to your paycheck, up to two days before payday. This feature ensures you avoid running short of money at the end of the week or month, allotting you ample room to plan, track, and adjust your spending and savings.
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Exploring Personal Loans for Emergency Situations
Personal loans are a convenient option during urgent monetary needs. They are unsecured loans and therefore don’t require collateral.
However, they’re typically accompanied by relatively high-interest rates. Consider using online prequalification tools for personal loans to determine if you’re eligible and view potential interest rates.
Explore different lenders, but be wary of the terms and conditions to make sure you don’t invite more financial trouble.
Which of the following is true regarding unexpected expenses?
- Unexpected expenses are costs that are not anticipated or planned for, such as sudden car repairs or medical emergencies.
- To efficiently manage unexpected expenses, it’s recommended to make them a part of the monthly budget. A suggested approach is to analyze past “unexpected expenses”, then estimate their costs and timing, which can provide an estimate of how much should be saved each month.
- While basing future expenses on past ones only furnishes savings guidelines, this method can prevent an unexpected expense from turning into a severe financial emergency.
- Planning for unexpected expenses by setting aside money from each paycheck can protect individuals from unforeseen financial difficulties.
- Understanding what types of unexpected expenses might occur can help in the development of strategies to handle them successfully, reducing the impact of any unpleasant financial surprises.
Yes, all of the statements above are true.
What is not true about unexpected expenses?
- Unexpected expenses are entirely out of our control.
- Unexpected expenses can be completely avoided.
- These unanticipated costs only occur irregularly or infrequently.
- You can’t prepare for unexpected expenses.
All of these statements are not true. While the occurrence of these expenses might be unexpected, they’re not entirely unpredictable. Many times, they are the result of poor financial planning or management as they are often unforeseen costs that were not anticipated or included in a budget.
Frequently Asked Questions (FAQ)
Plan Ahead to Avoid Unforeseen Expenses
While unexpected expenses are an inevitable part of life, their financial stress isn’t.
Through effective planning and budgeting, you can cushion their blow, ensuring they don’t throw you into financial turmoil. Around here at Money Bliss, we strive for our readers to have less stress with money.
No matter how well you plan, unexpected costs can still arise from time to time. They can happen quite regularly, which is why it’s crucial to include them in budget planning.
By setting aside a portion of each paycheck in a savings account, you can be better prepared for such costs when they arise.
Remember, every dollar saved is a step towards greater financial stability, helping you to navigate life’s uncertainties with confidence and peace of mind.
Now, make sure you are financially sound.
Source
- NOAA.gov. “Costliest U.S. Tropical Cyclones.” https://www.ncei.noaa.gov/access/billions/dcmi.pdf. Accessed December 1, 2023.
- Colorado Public Radio. “Most people who lost homes in the Marshall Fire were underinsured, Colorado insurance regulators say.” https://www.cpr.org/2022/05/02/most-people-who-lost-homes-in-the-marshall-fire-were-underinsured-colorado-insurance-regulators-say/. Accessed December 1, 2023.
- U.S. Energy Information Association. “U.S. residential electricity bills increased 5% in 2022, after adjusting for inflation.” https://www.eia.gov/todayinenergy/detail.php?id=56660. Accessed December 1, 2023.
- BetterPet. “Average emergency vet costs: what to expect.” https://betterpet.com/emergency-vet-costs/. Accessed December 1, 2023.
- Mastercard. “Your real-time guide to real-time payments.” https://www.mastercard.com/news/perspectives/2023/real-time-payments-what-is-rtp-and-why-do-we-need-instant-payments/. Accessed December 1, 2023.
Did the post resonate with you?
More importantly, did I answer the questions you have about this topic? Let me know in the comments if I can help in some other way!
Your comments are not just welcomed; they’re an integral part of our community. Let’s continue the conversation and explore how these ideas align with your journey towards Money Bliss.
Source: moneybliss.org
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Whether you’re purchasing a new pair of eyeglasses, stocking up on over-the-counter medications, or paying for your child’s daycare, there may be certain expenses your health insurance plan doesn’t cover.
In those cases, having a flexible spending account, or FSA, could help you save money. This special savings account lets you set aside pretax dollars to pay for eligible out-of-pocket healthcare expenses, which in turn can lower your taxable income.
Let’s take a look at how these accounts work.
What Is an FSA?
An FSA is an employer-sponsored savings account you can use to pay for certain health care and dependent costs. It’s commonly included as part of a benefits package, so if you purchased a plan on the Health Insurance Marketplace, or have Medicaid or Medicare, you may no longer qualify for a FSA.
There are three types of FSA accounts:
• Health care FSAs, which can be used to pay for eligible medical and dental expenses.
• Dependent care FSAs, which can be used to pay for eligible child and adult care expenses, such as preschool, summer camp, and home health care.
• Limited expense health care FSA, which can be used to pay for dental and vision expenses. This type of account is available to those who have a high-deductible health plan with a health savings account.
How Do You Fund an FSA?
If you opt into an FSA, you’ll need to decide on how much to regularly contribute throughout the year. Those contribution amounts will be automatically deducted from your paychecks and placed into the account. Whatever money you put into an FSA isn’t taxed, which means you can keep more of what you earn.
Your employer may also throw some money into your FSA account, but they are under no legal obligation to do so.
You can use your FSA throughout the year to either reimburse yourself or to help pay for eligible expenses for you, your spouse, and your dependents (more on that in a minute). Typically, you’ll be required to submit a claim through your employer and include proof of the expense (usually a receipt), along with a statement that says that your regular health insurance does not cover that cost.
Some employers offer an FSA debit card or checkbook, which you can use to pay for qualifying medical purchases without having to file a reimbursement claim through your employer.
💡 Quick Tip: When you have questions about what you can and can’t afford, a spending tracker app can show you the answer. With no guilt trip or hourly fee.
What Items Qualify for FSA Reimbursement?
The IRS decides which expenses qualify for FSA reimbursement, and the list is extensive. Here’s a look at some of what’s included — you can see the full list on the IRS’ website.
• Health plan co-payments and deductibles (but not insurance premiums)
• Prescription eyeglasses or contact lenses
• Dental and vision expenses
• Prescription medications
• Over-the-counter medicines
• First aid supplies
• Menstrual care items
• Birth control
• Sunscreen
• Home health care items, like thermometers, crutches, and medical alert devices
• Medical diagnostic products, like cholesterol monitors, home EKG devices, and home blood pressure monitors
• Home health care
• Day care
• Summer camp
Are There Any FSA Limits?
For 2023, health care FSA and limited health care FSA contributions are limited to $3,050 per year, per employer. Your spouse can also contribute $3,050 to their FSA account as well.
Meanwhile, dependent care FSA contributions are limited to $5,000 per household, or $2,500 if you’re married and filing separately.
Does an FSA Roll Over Each Year?
In general, you’ll need to use the money in an FSA within a plan year. Any unspent money will be lost. However, the IRS has changed the use-it-or-lose-it rule to allow a little more flexibility.
Now, your employer may be able to offer you a couple of options to use up any unspent money in an FSA:
• A “grace period” of no more than 2½ extra months to spend whatever is left in your account
• Rolling over up to $610 to use in the following plan year. (In 2024, that amount increases to $640.)
Note that your employer may be able to offer one of these options, but not both.
One way to avoid scrambling to spend down your FSA before the end of the year or the grace period is to plan ahead. Calculate all deductibles, copayments, coinsurance, prescription drugs, and other possible costs for the coming year, and only contribute what you think you’ll actually need.
Recommended: Flexible Spending Accounts: Rules, Regulations, and Uses
How Can You Use Up Your FSA?
You can consider some of these strategies to get the most out of your FSA:
• Buy non-prescription items. Certain items are FSA-eligible without needing a prescription (but save your receipt for the paperwork!). These items may include first-aid kits, bandages, thermometers, blood pressure monitors, ice packs, and heating pads. Check out the FSA Store to find out which items may be covered.
• Get your glasses (or contacts). You may be able to use your FSA to cover the cost of prescription eyeglasses, contact lenses, and sunglasses as well as reading glasses. Contact lens solution and eye drops may also be covered.
• Keep family planning in mind. FSA-eligible items can include condoms, pregnancy tests, baby monitors, fertility kits. If you have a prescription for them, female contraceptives may also be covered.
• Don’t forget your dentist. Unfortunately, toothpaste and cosmetic procedures are not covered by your FSA, but dental checkups and associated costs might be. These could include copays, deductibles, cleanings, fillings, X-rays, and even braces. Mouthguards and cleaning solutions for your retainers and dentures may be FSA-eligible as well.
💡 Quick Tip: Income, expenses, and life circumstances can change. Consider reviewing your budget a few times a year and making any adjustments if needed.
Flexible Savings Account (FSA) vs. Health Savings Account (HSA)
You may have heard of a health savings account (HSA). It’s easy to confuse it with an FSA, as they share some similarities.
Both types of accounts:
• Offer some tax advantages
• Can be used to pay for co-payments, deductibles, and eligible medical expenses
• Can be funded through employee-payroll deductions, employer contributions, or individual deductions
• Have a maximum contribution amount. In 2023, people with individual coverage can contribute up to $3,850 per year, while those with family coverage can cset aside up to $7,750 per year.
That said, there are some key differences between HSAs and FSAs:
• You must be enrolled in a high deductible health plan in order to qualify for an HSA.
• HSAs do not have a use-it-or-lose-it rule. Once you put money in the account, it’s yours.
• If you quit or are fired from your job, your HSA can go with you. This happens even if your employer contributed money to the account.
• If you’re 55 or older, you can contribute an additional $1,000 to your HSA as a catch-up contribution — similar to the catch-up contributions allowed with an IRA.
• If you withdraw money from your HSA for a non-qualified expense before the age of 65, you’ll pay taxes on it plus a 20% penalty.
• If you withdraw money from your HSA for any type of expense after age 65, you don’t pay a penalty. However, the withdrawal will be taxed like regular income.
Recommended: Benefits of Health Savings Accounts
The Takeaway
Flexible spending accounts are offered by employers and can be a useful tool for paying for health care- or dependent-related expenses. Notably, you fund the account with pretax dollars taken from your paycheck, which can lower your taxable income and help you save money.
You typically need to spend your FSA money within a plan year, though your employer may give you the option to either roll over a portion of the balance into the next year or use it during a grace period. There are also guidelines around what you can spend the FSA funds on and how much you can contribute to your account.
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Each calendar year brings a new set of changes to Medicare, from premiums and deductibles to rules and regulations. To get the most from Medicare in 2024, it’s helpful to understand what will be different.
Here’s a primer on 2024 Medicare changes:
Part A costs will mostly go up
Medicare Part A covers your hospital care as well as care in a skilled nursing facility (SNF). Most people get Part A for free, but for those who haven’t worked enough quarters to get free Part A, premiums will stay about the same. If you have to buy Medicare Part A, you’ll pay $278 or $505 per month in 2024, compared with $278 or $506 in 2023.
The inpatient hospital deductible, which you’ll pay before Medicare starts covering costs, will be $1,632 in 2024, up from $1,600 in 2023. (Note that certain Medigap plans do cover your Part A deductible.) You’ll pay the Part A deductible for each inpatient hospital or SNF benefit period — a new benefit period starts if you haven’t received inpatient hospital care or SNF care for 60 days in a row.
Medicare covers the first 60 days in a hospital or the first 20 days in a skilled nursing facility (once you hit the deductible). Copays for the rest of your stay are slightly higher in 2024, and are as follows:
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$408 per day for days 61 to 90 in a hospital (up from $400 in 2023).
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$816 per day for lifetime reserve days in a hospital (up from $800 in 2023). (These are any days over 90 days; you have 60 lifetime reserve days.)
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$204 per day for days 21 to 100 in a skilled nursing facility (up from $200 in 2023).
Part B costs will go up
Medicare Part B covers your visits to medical providers, as well as things like ambulance services and durable medical equipment. Everyone pays a premium for Part B, even if you have a Medicare Advantage plan.
Premiums for Medicare Part B will be $174.70 per month in 2024, up from $164.90 in 2023. The Part B deductible will be $240 in 2024, up from $226 in 2023. You pay the Part B deductible just once per year.
Compare Medigap plans
Medicare Advantage plan ratings are lower — again
In 2024, the average star rating for Medicare Advantage plans, weighted by enrollment, is 4.04 stars, down from 4.14 stars in 2023. And about 42% of Medicare Advantage contracts received a rating of 4 stars or higher from the Centers for Medicare & Medicaid Services (CMS), compared with about 51% in 2023.
“CMS attributes the additional decline in star ratings to methodological changes, new measures factoring into the ratings, as well as the overall performance of plans,” Meredith Freed, a senior policy analyst with the Program on Medicare Policy for KFF, a health policy nonprofit, said through email.
That said, approximately 74% of Medicare Advantage enrollees will be in plans with 4 stars or higher in 2024, similar to 72% in 2023, according to CMS.
Part D catastrophic drug costs will be eliminated
Currently, once Medicare Part D enrollees reach the “catastrophic” level of prescription drug spending — which is $7,400 in 2023 — they pay up to 5% of the cost of their drugs for the remainder of the year. It doesn’t sound significant, but it can be expensive.
“If you have medication that costs $30,000 a month — retail price — 5 percent of $30,000 is $1,500 a month,” says Melinda Caughill, co-founder and CEO of 65 Inc., which offers Medicare guidance. And there are many medications that cost $30,000 a month, Caughill says. “That’s a big deal.”
Next year, once enrollees hit the 2024 catastrophic limit of $8,000 in drug spending, there’s no more coinsurance required. Your prescription drug expenses are essentially capped. (Drug spending includes what enrollees pay out of pocket, plus the discount you get from manufacturers on drugs when you’re in the “coverage gap” phase of drug coverage. So that $8,000 isn’t entirely out of your pocket.)
“This is a policy change that will greatly help those people with very high-cost prescription drugs,” Gretchen Jacobson, vice president of the Medicare program for The Commonwealth Fund, a private foundation with the mission of promoting a high-performing health care system, said through email. “An out-of-pocket limit can also provide peace of mind to people whose expenses are below the limit.”
More people will be eligible for Extra Help
Under the government’s Extra Help program, people with limited resources and income may be able to get cost help with prescription drug plan costs, such as premiums, deductibles and prescription copays.
In 2024, thanks to the Inflation Reduction Act, more people will be eligible for full benefits, saving nearly $300 more per year on average compared with savings for partial benefits. (Full Extra Help benefits are worth about $5,300 per year in 2023, according to the Social Security Administration.) Eligibility will be expanded to people with income and resources up to 150% of the federal poverty level, according to the Department of Health and Human Services.
Unfortunately “many Medicare beneficiaries are not aware of either the Extra Help program, which helps with Part D costs, nor the Medicare Savings Programs, which help with Part A and B costs,” Freed said. “So it is important for them to check their eligibility for these programs.”
Source: nerdwallet.com
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Adopting a rescue or shelter dog doesn’t just give a needy animal a home. It can provide a playmate for your kids, a jogging buddy for you and a loyal companion for everyone to cuddle with on the couch. But a new pet can also come with unexpected vet bills, which is why you might want to consider pet insurance.
Pet insurance policies can help pay for treatment if your furry friend gets sick or hurt. In some cases, they may also cover vaccinations and other routine care. Here’s how to decide whether pet insurance is right for your rescue dog.
Estimate the cost of vet care
It’s impossible to know which medical problems a given pet may have in the future. However, researching the breeds you’re interested in can help you get a sense of which health conditions are most likely to crop up, says Dr. Antonio DeMarco, chief medical officer at GoodVets, a chain of animal hospitals with locations across the U.S. Some of these conditions can be both serious and expensive to treat, he says.
For example, large-breed dogs like golden and Labrador retrievers are prone to hip dysplasia, a deformity of the hip joint. Some dogs may need surgery to treat it, costing thousands of dollars.
A local vet can advise you on potential health concerns and how much it might cost to manage them. They can also help you estimate the price of routine care.
Understand pet insurance
Pet insurance likely won’t reimburse every dollar you spend at the vet. For example, most plans won’t cover pre-existing conditions that your dog had before you bought the policy. So if you adopt a senior dog with diabetes, you’ll need to pay for the treatment yourself.
For the same reason, you can’t simply wait to get a policy until your vet diagnoses an injury or illness. DeMarco has had pet owners ask him if they can buy insurance after their dog tears an ACL. “[You] sure can, but this isn’t covered,” he tells them.
Most pet insurance plans pay to treat illnesses and injuries but won’t help with routine care unless you buy extra coverage. That coverage may be worth adding for certain dogs, says Maureen Sosa, director of pet support at the Humane Rescue Alliance in Washington, D.C. Smaller dogs are more prone to dental disease and benefit from regular cleanings, which wellness plans can help pay for.
When shopping for pet insurance, check for deductibles and copays. Say your plan will pay 80% of your expenses after you’ve met the $500 annual deductible. That means you’d have to spend $500 on your pet’s treatment in a given year before your plan would start reimbursing you.
Your policy may also have a maximum payout limit, such as $5,000 or $10,000 per year.
Get pet insurance quotes
The average cost of accident and illness coverage for a dog is about $640 per year, according to the North American Pet Health Insurance Association. However, you might pay more or less depending on where you live, the coverage options you choose and the breed and age of your dog.
You can get online quotes from most pet insurance providers. Check rates from at least three companies to make sure you’re getting the best price for the coverage you want.
Pet insurance isn’t worth the cost for every rescue dog. Policies may be prohibitively expensive for older dogs, especially if they already have chronic conditions that the policy won’t cover. In these cases, you may be better off skipping insurance and setting up an emergency fund for vet expenses.
Consider your peace of mind
One of the biggest benefits of pet insurance is avoiding heart-breaking financial decisions. Sosa has seen owners forced to surrender pets because they couldn’t afford to treat their medical conditions. “The economy is in a really bad place,” she says. “That’s trickling down and affecting what people are able to afford.”
Even worse, some owners may have to euthanize their dogs if the treatment for a serious condition is simply too expensive, DeMarco says. “As veterinarians, that is the worst-case scenario for us.”
You may go years without having to use your pet insurance. But in a crisis, having the policy can give you peace of mind, DeMarco says. You’ll know that “if those situations arise, you’re going to be able to handle them financially and not have to make decisions based on finances rather than what’s best for your animal.”
This article was written by NerdWallet and was originally published by The Associated Press.
Source: nerdwallet.com
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Open enrollment is no one’s idea of a good time, but health coverage is a crucial part of your financial health. Whether you’re getting insurance through an employer or the Affordable Care Act marketplace, it’s important to ask the right questions before you choose a health plan for 2024.
“Open enrollment is a great time to do a personal health audit,” says certified public accountant Charlene Rhinehart, a personal finance editor at drug savings site GoodRx. “Understanding your current and anticipated health care needs will help you decide which plan is the best fit.”
Here’s how to weigh your options.
Are your doctors in network?
Plan networks change from year to year. If you love your doctor or specialist, make sure they’re still in the network of the plan you’re considering for 2024.
You should also consider whether you want the option to go out of the network — which you can usually do in a preferred provider organization, or PPO, plan, although it will cost more. Health maintenance organizations, or HMOs, tend to be cheaper but lack the out-of-network flexibility.
Are your medications covered?
If you’re on prescription medications, check plan formularies to make sure you understand how your drugs will be covered in 2024. Drug coverage can change from year to year, even if you stick with the same plan.
“Even if you were in an Aetna plan before, and you say, ‘Well, I’ll stay with Aetna again,’ you still want to look and make sure the medication you’re taking is still on the formulary,” says Abbie Leibowitz, chief medical officer and co-founder of Health Advocate, which provides integrated health advocacy and health benefits programs.
What are the out-of-pocket costs?
Every plan has set costs, like the monthly premiums, plus the costs of care, which include the deductible and any copays and coinsurance. Comparing plans means estimating how much health care you’ll use next year.
On the one hand, you have the costs you’d pay if you don’t use the plan much beyond preventive care. On the other hand, you have the maximum amount you could pay in each plan if you’re a heavy health care user. You can easily compare these situations.
There’s a squishy middle ground, however, where the best plan for you depends on the amount and type of care you’ll need next year.
“The tricky part is we never really know how much we’re going to spend in a given year if we’re in the middle,” says Adam Rosenfeld, a health care benefits expert and president of employee benefits company Rubicon Benefits. The best thing, he says, is to look at your current claims information and imagine that the next year will be identical. On which plan would you be better off?
“It’s the best predictive modeling you can do at this point,” Rosenfeld says.
Is a high-deductible plan right for you?
A high-deductible health plan, or HDHP, in 2024 is defined as a plan with a deductible of at least $1,600 for individual coverage or $3,200 for family coverage, with out-of-pocket maximums of no more than $8,050 or $16,100, respectively. HDHPs usually have lower premiums, and sometimes companies kick in a contribution to a health savings account, or HSA, to help cover the deductible.
An HDHP can be an appropriate plan for people in a variety of health situations, as long as they’re prepared to pay the deductible if they need health care.
“The question is, ‘Can you afford it?’” says Adria Gross, an insurance broker, consultant and founder of MedWise Insurance Advocacy, which helps clients and attorneys with medical claims issues. If you’re healthy, Gross says, go for the HDHP. But in the case of a bad accident, you’ll want to make sure you have the means to pay the full deductible.
Can you stack benefits?
You might have access to voluntary benefits through your employer that can help cover costs that your insurance doesn’t cover. For example, Aflac policies can help pay expenses if you have an accident or get cancer.
You may find that you can get a high-deductible health plan plus a supplemental plan that would help you cover your deductible for less than the cost of a traditional health plan. “It can be a lot less than moving to the next tier where the deductible is lower,” Leibowitz says.
Do you have special care needs?
Some insurance plans cover things like weight loss surgery or infertility treatments — but some don’t, and the exclusion can make a huge difference if it’s a procedure you’re considering. You might find that one insurance company covers a certain surgery or test while another views it as investigational and not medically necessary.
“I call them the fringes,” Leibowitz says. “They’re beyond the typical medical and surgery coverage.” The focus is narrow, he says, but the coverage can be important.
The underlying message, he says, is that just because it looks like the same plan from the same company you were with this year, don’t assume that it hasn’t changed in ways that are important to you. “Network, formulary, benefits,” Leibowitz says, “you have to do your homework.”
This article was written by NerdWallet and was originally published by The Associated Press.
Source: nerdwallet.com
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Like human health insurance, pet insurance helps cover unexpected medical expenses for our furry friends. One crucial component of that coverage is your pet insurance deductible. Understanding how deductibles work can help you choose the right plan for you and your pet.
What is a pet insurance deductible?
A pet insurance deductible is the amount you pay out of pocket for your pet’s veterinary care before the insurance company starts covering costs. It’s a set amount you choose when you purchase your policy.
For example, if your deductible is $250 and your pet’s vet bill is $1,000, you’ll pay the first $250, and the insurance company will help cover the remaining $750, depending on your policy’s terms. If you have an annual deductible, you’d have to pay this amount only once per year.
How do pet insurance deductibles work?
A deductible is a way for insurance companies to share the cost of vet bills with pet owners. Once you’ve met your deductible, the pet insurance company will pay any remaining portion of your vet bills that qualify for coverage.
In most cases, you’ll need to pay the full vet bill yourself and then file a claim for reimbursement with your pet insurance company. If there are any expenses insurance doesn’t cover, like taxes or waste disposal, the company will subtract them along with your deductible before reimbursing its share of the bill.
Raising or lowering your deductible will affect how much you pay for pet insurance. Selecting a higher deductible usually lowers your insurance premium but means you’ll pay more out of pocket when your pet needs care.
🤓Nerdy Tip
The amount you pay for routine care like vaccines or wellness visits usually doesn’t count toward your deductible. Even if you have separate coverage for preventive care, the deductible typically applies only to covered illnesses and accidents.
Types of pet insurance deductibles
There are two main kinds of deductibles: annual and per condition.
Annual pet insurance deductible
An annual pet insurance deductible is a set amount you pay each year before insurance starts covering your vet bills. You pay this deductible only once per policy term. It doesn’t reset until your policy renews, regardless of how many claims you make. This is the most common type of pet insurance deductible.
Say you have a $300 annual deductible. If your pet has a minor accident and the vet bill is $150, you pay the entire amount since it’s less than the deductible. (Note that you’d still want to file a claim so your pet insurance company can apply the amount you’ve paid toward your deductible.)
Later in the same year, your pet gets sick and racks up a $500 bill. You’d pay the remaining $150 of your deductible, and the insurance would cover a portion of the remaining $350, depending on your policy’s terms.
If your pet has more health issues within the same year, the insurance would continue to help cover the costs since you’ve already met the deductible. But once your policy renews, your deductible will reset and you’ll need to pay it again before receiving more insurance coverage.
Per-condition deductible
With a per-condition deductible, you pay a set amount out of pocket for each illness or condition your pet has. This type of deductible may also be called a per-incident deductible.
For example, if your pet gets an ear infection and later breaks a leg, you would pay your deductible twice: once for the ear infection and once for the broken leg.
After you pay the deductible for a specific condition, insurance helps cover additional costs for that condition over the life of your pet. This is beneficial if your pet develops a chronic problem that needs ongoing treatment each year. Once you meet the deductible for that condition, you don’t pay it again, whereas you’d pay it each year with an annual deductible.
The downside is that if your pet needs care for an unrelated problem later in the same year, you’re stuck paying the deductible all over again.
Did you know…
Very few pet insurers offer per-incident deductibles. Most have annual deductibles, so pet owners have to meet the limit only once per year.
Deductibles vs. copays and reimbursement rates
Deductibles, copays and reimbursement rates are different parts of how you and your insurance company share costs. Once you’ve paid your deductible, the insurance company uses the copay and reimbursement rate to calculate how much of the remaining vet bill it will cover.
A copayment, or copay, is your share of the vet visit cost after you’ve met your deductible. The reimbursement rate is the percentage of the bill the insurer will pay. For example, if your policy has a 70% reimbursement rate, that means your copay is 30%.
To see how these policy limits work together, imagine you have a $200 deductible, a 20% copay and an 80% reimbursement rate. If your pet’s vet bill is $1,000, you’d pay the $200 deductible first. Then, of the remaining $800, the insurance would pay 80% ($640), and you’d pay the 20% copay ($160). So, for a $1,000 vet bill, you’d pay $360, and the insurance would cover $640.
In general, a policy with a higher reimbursement rate will be more expensive, but the insurance company will cover more of your vet bills.
🤓Nerdy Tip
In addition to deductibles, copays and reimbursement rates, most pet plans have an annual coverage limit, which is the most your insurer will reimburse for vet care in a 12-month period. This limit is often customizable, and you may have the option to choose unlimited coverage. Your annual coverage limit is another factor that can influence the cost of pet insurance.
How to choose a pet insurance deductible
The goal when choosing a deductible is to strike a balance between good coverage and manageable out-of-pocket expenses.
First, determine how much you can comfortably pay for vet care. Imagine if your pet needed to visit an emergency vet tomorrow. How much of a deductible could you afford to pay? You shouldn’t struggle to cover your deductible in an emergency, so choose an amount that fits your budget.
Remember, the deductible is just one part of your policy. Consider it alongside copays, reimbursement rates and annual coverage limits to get the full picture. The more costs you take on yourself, the less you’ll pay for insurance, and vice versa.
If you’ve had your pet for a while, looking at what you’ve spent in vet care over the past year may help you predict future costs.
Compare deductible options from popular pet insurance companies
Pet insurance company |
Deductible options |
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$100 to $1,000 annually. |
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$100 to $500 annually. |
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$100 to $1,000 annually. |
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$250 to $2,500 annually. |
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$100 to $1,500 annually. |
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$100 to $500 annually. |
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$100 to $1,000 annually. |
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$100 to $500 annually. |
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$250 to $1,000 annually. |
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$0 to $2,500 annually. |
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$250 annually. (Other options may be available.) |
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$50 to $1,000 annually. |
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$100 to $1,000 annually. |
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$100 to $1,000 annually. |
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$0 to $1,000 lifetime per-condition deductible in most states; some states have no deductible. |
Source: nerdwallet.com
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Only 3 in 10 Medicare beneficiaries shop around during open enrollment, according to a 2022 analysis from KFF, a health policy nonprofit — and only 1 in 10 Medicare Advantage enrollees voluntarily switch plans. But a 2020 analysis of Medicare Advantage plan choices by the National Bureau of Economic Research found that more than half of beneficiaries overspent by more than $1,000 due to the plan they selected.
Medicare open enrollment is Oct. 15 to Dec. 7, giving people with Medicare a chance to change plans for the upcoming year. Although potential Medicare Advantage enrollees may be swayed by $0 premiums and extra perks like vision and dental coverage, there are more important features to explore when you’re choosing next year’s coverage.
Here are some practices to avoid as you shop for Medicare Advantage this fall.
1. Thinking Medicare Advantage is Medicare
If you’re considering Medicare Advantage, understand that it’s not the same thing as government-provided Medicare. It offers the same benefits, but Medicare Advantage is run by private health insurance companies and it operates differently.
“You are essentially taking the Medicare coverage that you’ve been provided by the government and turning that in,” says Melinda Caughill, co-founder and CEO of 65 Incorporated, which offers Medicare guidance.
You can switch back to Original Medicare during each year’s open enrollment period, but you may not be able to qualify for an affordable Medicare Supplement Insurance, or Medigap, plan once you’re past the one-time Medigap open enrollment period. (Medigap helps with certain out-of-pocket costs not covered by Original Medicare.)
2. Assuming your doctors are in network
Medicare Advantage plans operate within networks of medical providers, and you usually must see in-network doctors for covered care.
“A lot of people don’t realize that — especially those $0-premium plans — they tend to have fairly confined networks,” says Emily Gang, CEO of the Medicare Coach, a site that provides Medicare guidance. “You want to double-check that your doctor is actually an approved provider in that network.”
Ask your providers what insurance they’ll be accepting in 2024, suggests Sarah Murdoch, director of client services for the Medicare Rights Center, a nonprofit consumer advocacy organization. It’s easier than trying to check each plan’s network individually.
3. Not checking your drug coverage
Like network providers, Medicare Part D prescription drug coverage can also change each year. Your drug plan might cover one of your medications differently in 2024, leaving you with more out-of-pocket costs than you expected.
“If you take even one brand name medication, your need to compare plans is incredibly high,” Caughill says. No brand names on your list? Shop around if you take five or more medications in general.
4. Buying for the dental benefits
Medicare Advantage plans usually include benefits that aren’t part of Original Medicare, such as dental, vision or hearing coverage. These extras may be appealing, but don’t let them steer your plan choice.
“First of all, it’s health insurance — so how is it going to cover your health care providers and your medications?” says Katy Votava, who holds a doctorate in health economics and nursing and is president and founder of Goodcare, a consulting firm focused on the economics of Medicare. “If you pick [your plan] for a benefit that isn’t health insurance, you’re often picking wrong. And the dental benefit is pretty limited in all these plans — it’s a couple of cleanings and some bite wings.”
5. Looking at the premium only
The majority of Medicare Advantage enrollees are in plans with no premium, meaning you pay nothing each month for the plan. “People see that $0 premium and they’re like, ‘Oh, it’s free,’” Gang says. “And it’s not.”
Research the rest of the plan’s costs before you sign up, including deductibles, copays, coinsurance and the out-of-pocket maximum, which is the most you might have to spend on covered care in a year. In 2023, the out-of-pocket max can be as high as $8,300 for in-network care.
6. Buying because your friend has it
People eligible for Medicare are bombarded by information during open enrollment, and it can be overwhelming. “They don’t shop,” Votava says. “They go with name recognition or what their friend has.”
The better choice: Focus on your own situation and find the plan that meets your needs.
If you need help, contact your State Health Insurance Assistance Program, or SHIP, for free Medicare guidance. Just don’t wait until the last minute, because appointments fill up, Votava says. “If you need individual help, you’d better get on the list.”
This article was written by NerdWallet and was originally published by The Associated Press.
Source: nerdwallet.com
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This article originally appeared on RickOrford.com and has been republished here with permission.
Car owners throughout the U.S. almost always need to have a car insurance policy. With the financial considerations involved and the risks drivers face on the road, it’s important to weigh the cost of car insurance carefully. Do you think your car insurance is too high? If so, you can find cheap car insurance by shopping around.
In certain ways, your car insurance costs may be a reflection of you and your driving habits. Auto insurance providers often base the rates they charge on important factors. Some of these include your credit score, where you live, your driving record, and the type of car you drive. Therefore, if your premiums recently shot up or seem too high, you need to determine the possible reasons for it.
Reason #1: You Have Bad Credit
In most states, auto insurance companies use your credit score when calculating your car insurance premiums. Therefore, if you have a poor credit score, you may end up having to pay higher insurance premiums. However, the cost increase may depend on the auto insurance provider you choose and where you live.
According to the Insurance Information Institute, credit-based insurance scores are confidential ratings based on the insured individual’s credit information. Many insurance providers use credit scores in combination with other factors to help determine premiums. This is typically the case for insurance lines such as personal car insurance.
Reason #2: Poor Driving Record
Before giving you a car insurance policy, all insurance providers will want to know your complete driving record. This includes your traffic violations and accidents you had in the past. Even if the handful of accidents you had did not happen recently, you might still have to pay higher insurance premiums. The same applies to traffic violations.
However, if you have a clean driving record, you should enjoy lower insurance premiums. When it comes time to renew your policy, your insurance provider will check your driving record for DUIs, accidents, speeding tickets, and other traffic violations.
Your premiums may increase by as much as 20% after a speeding ticket. A DWI or DUI will cost you significantly more. You will also have to pay steep fines and attorney fees, in addition to an average premium increase of up to $800.
The reason for this difference in rates is that drivers with poor records are more likely to make more claims in the future.
Reason #3: Coverage Levels and Types
The type of coverage you choose and the level of insurance you have can greatly influence your insurance rates. Every state decides its own rules and requirements for minimum coverage requirements on any type of policy.
For example, some states have basic minimum requirements for property damage and bodily injury coverage. Others require additional coverages such as underinsured and/or uninsured motorists and personal injury protection or medical payments coverage.
A state like South Carolina, for instance, requires drivers to carry the following:
- A minimum coverage of $25,000 per person for bodily injury
- $50,000 per accident
- $25,000 in uninsured motorists’ coverage and property damage coverage within the same limits
Since the minimum requirements for drivers differ by state, you may start with different rates and coverages just on a basic liability insurance policy alone. Furthermore, if your car has a lien, you may need to have additional coverage or higher limits, which would affect your annual rates.
The answer to the question “Why is my car insurance so high?” may lie in the type of coverage you have. Generally, the more coverage your car has, the more you should expect to pay.
For example, do you have a full coverage insurance policy, which includes collision and comprehensive coverage? If so, it may cost you about 170% more in premiums than a policy with liability coverage only.
Reason #4: Your Claim History
Even if you only have a couple of accidents on your driving record, the resulting payouts will impact your insurance premiums. Of course, a driver with a couple of minor fender benders is a significantly lower risk than one who previously totaled several cars.
Whether the accidents were your fault or not, the number of claims you file will have an impact on your insurance rates. A no-fault accident can lead to a 10% increase in your premium and remain on your record for up to three years.
However, some states do not allow insurance providers to increase premiums after a no-fault accident. However, filing a claim for such an accident will still count towards your total number of claims.
Related read: How an Accident Can Affect Your Credit Score
Reason #5: Your Car
When setting premium rates, car insurance providers consider the type of car to be insured. Some types of cars are more likely than others to keep occupants protected in the case of an accident. This results in lower insurance rates.
However, drivers of high-powered cars such as sports cars are statistically more likely to drive recklessly. This makes these drivers more likely to cause accidents, resulting in higher insurance rates.
According to some studies, safer and bigger cars, such as small SUVs and minivans, tend to have the most reasonable rates of insurance. Smaller cars, on the other hand, have surprisingly high rates. One reason for this could be because they tend to sustain more extensive damage in a crash.
Reason 6: Where You Live
Car insurance costs vary widely across the United States. If you reside in Michigan, one of the most expensive states for auto insurance, you can expect to pay several times more than people living in Maine, for example.
Various factors affect insurance rates in each state. These include the number of uninsured drivers, condition of the road network, minimum coverage amounts, and more. That said, you need to understand that insurance rates can vary within a state or city as well.
For example, if you live in an area with narrow roads that frequently lead to accidents, you may have to pay more for insurance than you would if you lived elsewhere. Those who live in areas with high rates of auto thefts tend to pay more for car insurance as well.
Reason #7: Your Age or Gender
“Why is my car insurance so high?” This is a question many younger drivers tend to ask. According to the Insurance Information Institute, mature drivers tend to have fewer accidents than less experienced drivers, especially teenagers. This is the reason less experienced drivers pay more for car insurance.
Also, your insurer will charge you more if you let teenagers and young adults below 25 drive your car. If you have young drivers on your insurance policy, you may end up paying higher premiums.
Your gender may also affect how much you pay for car insurance. Statistically, men tend to get into more accidents and have more DUI-related accidents. Furthermore, they tend to have more serious accidents than women. These are the reasons why women tend to pay less for car insurance than men.
Young men are likely to pay a lot more for auto insurance. A 20-year-old man, for example, may have to pay about 16% more on his insurance premium than a woman of the same age.
However, as drivers age, the difference in rates tends to even out. Often, older women pay slightly more for car insurance than men of the same age. However, in this case, the difference in rates is quite small.
Reason #8: Your Insurance Company
Your car insurance may be expensive because your insurance provider charges higher rates. Rates vary dramatically among different insurance providers. Therefore, you could be paying significantly more than necessary.
According to one study, among the top ten auto insurance providers nationwide, the average price of basic coverage for a good driver is about $440 for six months. However, that same driver could be paying just $309 from one company or as much as $625 from another of the top companies.
Therefore, if you have a good driving record, you could save up to 51% in insurance savings by switching companies.
Reason #9: Your Driving Patterns
Simply put, you and your insurance provider are at higher risk the more often you’re on the road and the further you drive. If you travel great distances to and from work, driving your car may eliminate some of the inconvenience. You just listen to your favorite music or podcasts to pass the time as you drive to work every day.
However, you may be paying a higher insurance premium for that convenience. When you apply for insurance coverage, your insurance provider will want to know where you work and where you live. This will help them have a better idea of how far you drive regularly.
Reason #10: You Have Low Deductibles
When buying car insurance, car owners typically choose a deductible. This is the amount they would need to pay before the insurance provider picks up the tab in the event of theft, an accident, or any other type of vehicle damage.
Depending on the type of policy you choose, your deductibles may range from $250 to $1,000. However, there’s a catch. Generally, the lower your deductibles are, the higher your annual insurance premium is.
Reason 11: You Pay for Coverage You Don’t Need
If you think your car insurance is too costly, you need to take a closer look at your policy. Do you need to pay for things such as car rental coverage and roadside assistance? Although such coverage can provide some convenience, they are not the most important things to pay for.
Reason #12: You Have Gaps in Your Car Insurance
Many auto insurance companies consider the continuity of a car owner’s auto insurance. If you’ve had lapses or gaps in your car insurance history, you may be pegged as a high-risk car owner. As a result, your premium rates may increase by as much as 8% per year. The rate increase goes up to 35% if the coverage lapse extends beyond 30 days.
These penalties may also vary depending on your auto insurance provider. Make sure you ask your provider about how an insurance lapse would affect your premium rates.
The Bottom Line
To find out why your insurance rates seem to be expensive, you must first understand how auto insurance companies determine your rates. Fortunately, in most cases, you can do something about your unnecessarily high car insurance premiums. This may involve adjusting your driving habits or filing fewer claims, if possible.
In addition to shopping around for the best auto insurance rates and the right policy, you should look for discounts as well. These discounts may be applicable to drivers with good records, student drivers, and members of the military. Check your provider’s website to determine the types of discounts they offer.
The more information you have, the easier you can identify the factors contributing to your car’s high insurance rates.
Source: credit.com
Apache is functioning normally
Your pet is part of the family, and you’d do anything to keep them healthy and happy. But what happens if they need surgery? Will your pet insurance cover the cost? The answer isn’t always straightforward. Here’s when pet insurance typically covers surgery and when it doesn’t.
Does pet insurance cover surgery?
Pet insurance can help pay for surgery if your pet gets hurt or sick. This could include surgeries for broken bones, cancer, objects stuck in their stomach, emergencies, ligament problems or some dental issues. If you buy a wellness plan, you may also have coverage for spaying or neutering.
But pet insurance almost never covers surgeries for preexisting conditions or elective procedures like tail docking or dew claw removal.
Surgical procedures that pet insurance typically covers
Pet insurance policies typically pay for surgical procedures needed to treat an accident or illness. Depending on your policy, this may include:
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Cancer treatments like tumor removal.
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Removing objects like rocks, toys or sticks that pets accidentally swallow.
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Emergency surgeries for life-threatening situations like bloat or internal bleeding.
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Dental surgeries like tooth extractions or root canals caused by an illness or accident.
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Surgeries for ruptured knee ligaments or hip dysplasia.
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Procedures to treat hereditary and congenital conditions such as luxating patellas.
🤓Nerdy Tip
Many pet insurance companies won’t cover certain orthopedic issues for the first several months of your policy. Also, if your pet had a bilateral issue like hip dysplasia on one side of their body before you bought their policy, it may be considered a preexisting condition if it happens on the other side of their body. Pet insurance generally won’t pay to treat preexisting conditions.
Surgical procedures that pet insurance typically won’t cover
Pet insurance plans usually have a wide range of exclusions and limitations. Accident and illness plans often won’t cover:
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Surgeries to treat conditions your pet had before coverage began.
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Cosmetic or elective procedures like ear cropping, tail docking, gastropexy (a surgery to prevent bloat), microchipping, declawing or dew claw removal.
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Breeding-related procedures like cesarean sections, spaying or neutering.
Some pet insurance companies offer preventive care plans that will cover some of the procedures above (such as spaying, neutering, microchipping or gastropexy).
🤓Nerdy Tip
Many pet insurers will cover curable preexisting conditions like vomiting and gastrointestinal issues if your pet has been treatment- and symptom-free for a certain period of time. Check with your insurer to see if any of your pet’s previous conditions are considered curable.
Common pet surgical procedures
While pet insurance doesn’t cover every type of surgery, it can help you save money on many procedures caused by accidents or illnesses. Here’s a look at common pet surgical procedures and whether insurance generally covers them.
Pet surgery |
Generally covered by insurance? |
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ACL or CCL repair |
|
Amputation |
|
Cancer surgery |
|
Fractures and dislocation repair |
|
Hip dysplasia |
|
Intestinal obstruction due to foreign body |
|
Mass or tumor removal |
|
Skin lacerations |
|
Spay or neuter |
No, except with some wellness plans. |
How does surgery coverage work?
Surgery coverage is usually a standard part of accident and illness coverage. So if your pet needs surgery for a broken leg, tumor or cataracts — and it’s not related to a preexisting condition — insurance will likely cover it.
However, having pet insurance doesn’t guarantee that all veterinary bills will be paid. These policies typically have a deductible, a reimbursement rate and a maximum coverage limit per year or per incident. Depending on your insurer, you may also be responsible for paying exam fees related to the surgery.
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The deductible is the amount you must pay before your pet insurer will begin covering your vet bills. Most insurers charge an annual deductible, but some assess deductibles per condition.
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The reimbursement rate is the percentage of your vet bills your pet insurer will cover once you’ve reached your deductible. The percentage you cover is known as a copayment.
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The maximum coverage limit is the total amount your pet insurer will pay per year or per incident.
Say you have a pet insurance plan with a $500 deductible, 80% reimbursement rate and $10,000 annual limit. Your pet needs surgery to remove a tumor, which will cost $3,000.
First, you’ll need to pay the $500 deductible out of pocket. After that, your insurance will cover 80% of the remaining $2,500, which comes out to $2,000. You’ll be responsible for the remaining 20%, which comes out to $500.
So in total, you’ll pay $1,000 for the surgery ($500 deductible + $500 coinsurance), and your insurance will cover $2,000. If your pet needs follow-up care later in the year, you’ll have $8,000 left of your annual limit to cover any additional medical expenses.
How to file a claim for surgery costs
There are two ways to file a pet surgery claim.
The first way is with direct billing. With this option, you won’t have to pay your insurer’s part of the bill out of pocket. Instead, your pet insurance company will pay your vet directly.
Direct billing isn’t that common. Pets Best, Healthy Paws and Trupanion are some of the only pet insurance companies that will pay your vet directly. Your vet must also be willing to accept payments directly from providers.
The more traditional way to file a pet insurance claim for surgery is to pay the full amount upfront and then submit the claim to your insurance company for reimbursement. To do this, you’ll generally need to fill out your insurance company’s claim form and provide a copy of the itemized receipt or invoice from your vet.
Your insurance company will review your claim to make sure it meets the terms of your policy. If everything checks out, your insurer will reimburse you the covered amount, minus any deductible or copay.
Can you buy pet insurance before surgery?
Yes, you can buy pet insurance before your pet needs surgery, but that doesn’t mean your policy will pay for the procedure.
Pet insurance doesn’t cover preexisting conditions, so any medical condition your pet was diagnosed with before you bought the policy won’t be covered.
Pet insurance plans also have waiting periods, the length of time between when you buy your plan and when insurance will start covering eligible treatments. Common waiting periods are 14 days for illness coverage and 48 hours for accident coverage.
How top pet insurance companies cover surgery
To give you an idea of how different pet insurance companies cover surgery, we looked at three insurers from our list of the best pet insurance companies.
Embrace surgery coverage
Embrace‘s standard policy covers exams, treatment, hospitalization and surgery for injuries and illnesses, including cancer. But you’ll need to add a wellness plan to get coverage for spaying and neutering. Embrace won’t cover surgeries arising from preexisting conditions, fighting, racing or mistreatment.
Figo surgery coverage
Figo pet insurance covers surgeries, prescription medications and diagnostic testing for accidents and illnesses. But preexisting conditions aren’t covered unless they’ve been cured and the pet is symptom-free for at least 12 months. Figo has wellness plans for things like vaccines, routine exams, dental cleaning, and spay or neuter surgery.
Pets Best surgery coverage
Pets Best’s surgery coverage is included in its accident and illness plan. The policy can also cover pre- and post-surgical care like diagnostic tests, prescription medication and physical rehabilitation. Add a wellness plan if you want coverage for spay or neuter surgery.
Source: nerdwallet.com