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Chris Hardin has over twenty-four years experience with Medicare supplement insurance and related products. He can also assist you with Life Insurance, Long Term Care Insurance, Annuities, and Estate Planning.

Medicare Quality Improvement Organizations (QIOs) work with consumers, physicians, hospitals, and other caregivers to refine care delivery systems to make sure patients get the right care at the right time, particularly among underserved populations.

Financial planning is the process that can help you pursue your goals by evaluating your whole financial picture, then outlining strategies that are tailored to your individual needs and available resources. Just as the success of a military mission is dependent upon proper planning, your financial success may be dependent upon creating a sound financial plan as well.

Why is financial planning important?

While being tasked with the burdens of protecting our country, members of the military also need to be aware of how their military service impacts their personal finances. In addition, servicemembers have sources of income and savings options that aren't available to civilians. Understanding these benefits and taking advantage of them could not only help you to work toward financial goals for you and your family, but you may be able to focus better on the demands of your service commitment.

The financial planning process

Developing a comprehensive financial plan and putting it in place generally involves the following steps:

  • Take account of your income, assets, taxes, regular monthly expenses, and liabilities; evaluate your insurance (life, health, property and casualty, etc.), your investments and savings, and your estate plan
  • Establish and prioritize your financial goals and set a time frame for each
  • Identify areas of financial concern and financial strengths
  • Familiarize yourself with specific financial products available to you and incorporate them into your financial plan where appropriate
  • Monitor your plan and make adjustments as your goals, time frames, and circumstances change
  • Use the services of financial professionals such as financial planners, accountants, and estate attorneys who have the expertise necessary to provide objective information and help you implement your plan results

Set and prioritize financial goals

Determining financial priorities and goals is ultimately the responsibility of you and your family. Start by making a list of your short-term goals (e.g., new car, vacation) and your long-term goals (e.g., home purchase, child's education, retirement). Then try to prioritize those goals. How important is each goal to you and your family? How much will you need to save in order to reach each goal? Once you have a clearer picture of your goals, you can work toward establishing a budget that can help you pursue them.

Establish a budget

Creating and maintaining a budget may not only help you target your financial goals, but regularly reviewing and updating your budget can help keep you on track, particularly when your circumstances change. To develop a budget that is appropriate for your lifestyle, you'll need to identify your current monthly income and expenses. Start by adding up all your income. A servicemember's income can come in several forms of monetary and nonmonetary compensation. In addition, some forms of income are taxable while other types of income are nontaxable.

Understanding whether income is taxed is very important because disposable income, or income that's left after paying taxes, is what you have available to pay bills and save for future goals. Taxable basic pay varies with rank and time of service, so changes in base pay should be factored into your budget. Several forms of military compensation are nontaxable, such as Basic Allowance for Subsistence, Basic Allowance for Housing, uniform and clothing allowance, hostile fire pay, basic pay and occupational incentive pay during periods of deployment to a hostile theater, and family separation allowance.

In addition to your military income, be sure to include other types of income, such as dividends, interest, a spouse's civilian pay, and child support. Next, add up all your expenses. It helps to divide them into two categories: fixed expenses (e.g., housing, food, clothing, and transportation) and discretionary expenses (e.g., entertainment, vacations, and hobbies). You'll also want to make sure that you have identified any out-of-pattern expenses, such as holiday gifts, car maintenance, and home repair.

Once you've added up all your income and expenses, compare the two totals. If you find yourself spending more than you earn, you'll need to make some adjustments. Look at your expenses closely and cut down on your discretionary spending.

Saving starts with an emergency fund

A sound financial plan could help ensure that you are protected when financial emergencies arise. Having a cash reserve or emergency fund may help you avoid taking on additional debt when you don't want to. The amount of your reserve depends on your own personal situation, but it's generally suggested that your cash reserve should equal three to six months of ordinary living expenses.

Choosing your savings vehicles

The savings vehicles you use should depend on two factors: your time horizon and risk tolerance. Generally, the longer the time horizon, the more risk you may be able to assume. Bank savings options include savings accounts, money market accounts, and certificates of deposit. These are typically more stable choices with the lower risk; other alternatives include investments that can go up or down in value and may or may not pay interest or dividends.

Note:  All investing involves risk including the loss of principal. Before investing, carefully consider its investment objectives, risks, charges, and fees, which can be found in the prospectus available from the fund. Read the prospectus carefully before investing.

Saving for retirement

One of the most important financial goals is saving for retirement. Even if you expect to qualify for a military pension, it probably won't provide all of the retirement income you'll need. A retirement savings option available to members of the military is the government's Thrift Savings Plan (TSP).

The TSP is like the government's version of the private-sector 401(k) plan. Your contributions are deducted directly from your paycheck before taxes (which can lower your current taxable income), and your contributions and earnings accumulate tax deferred until withdrawn, at which time you'll generally pay income taxes on the amount you take out of the TSP. There are limits on how much you can contribute each year. You can also contribute after-tax dollars to a Roth TSP account, from which qualified withdrawals are generally received tax free.

Safeguard with insurance

Insurance programs are often a vital part of a sound financial plan. Auto insurance, homeowners or renters insurance, health insurance, and life insurance should be investigated, with the cost of each type of coverage factored into your budget.

Life insurance provides financial protection for your family and loved ones. Servicemembers' Group Life Insurance (SGLI) is part of a servicemember's benefit package. Basic SGLI coverage is provided automatically when you join the military (although you can opt out or elect lesser coverage amounts), and premium costs are deducted from your pay.

Active-duty servicemembers, retired servicemembers, their qualified family members and certain survivors may receive health-care coverage through TRICARE, the medical program for the U.S. military. Depending on your status, the availability of medical care at military facilities, and the TRICARE option you choose, you may receive care either through military or civilian providers.

Tips to help you stay on track

  • Stay disciplined: Make budgeting a part of your daily routine
  • Distinguish between expenses that are "wants" (e.g., new golf clubs) and expenses that are "needs" (e.g., groceries)
  • Avoid using credit cards to pay for everyday expenses: It may seem as though you're spending less, but your credit-card debt may continue to increase.

 

Copyright 2006-2015 Broadridge Investor Communication Solutions, Inc. All rights reserved.

What is it?

Paying for nursing home care is a burden that most Americans bear, whether directly or indirectly. Even if you never need nursing home care yourself, you are already paying for the nursing home care of others by paying income taxes that, in part, finance Medicaid and veterans' benefits.

What are long-term care Partnership policies?

The high cost of long-term care has placed a financial burden on individuals and state Medicaid programs. As the number of older Americans grows, the strain is likely to worsen, and containing Medicaid costs has become a priority for states and the federal government.

Introduction

Whether you should purchase a long-term care insurance (LTCI) policy depends on your financial ability, age, health status, retirement objectives, and whether you have assets you want to protect. Once you've made the decision to buy, you'll need to decide how much coverage is enough.

Long-term care insurance (LTCI)

In return for your payment of premiums, a long-term care insurance (LTCI) policy will pay a selected dollar amount per day (for a selected period of time) for your skilled, intermediate, or custodial care in nursing homes and, sometimes, in alternative care settings, such as home health care.

What is long-term care?

In general, long-term care refers to a broad range of medical and personal services designed to assist individuals who have lost their ability to function independently. The need for this ongoing care arises when you have a chronic disability or when physical/mental impairments prevent you from performing certain basic activities, such as feeding, bathing, dressing, transferring, and toileting.

Medicare Comments - Part B

Medicare Covered Services

Abdominal aortic aneurysm screening

Medicare covers a one-time screening abdominal aortic aneurysm ultrasound for people at risk. You must get a referral

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Advance Care Planning

Medicare covers voluntary Advance Care Planning as part of the Yearly  “Wellness” visit. This is planning for care you

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Alcohol misuse screening and counseling

Medicare covers one alcohol misuse screening per year for adults with Medicare (including pregnant women) who use

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Ambulance Services

Medicare covers ground ambulance transportation when you need to be transported to a hospital, critical access hospital

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Ambulatory surgical centers

Medicare covers the facility service fees related to approved surgical procedures provided in an ambulatory surgical

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Blood

If the provider gets blood from a blood bank at no charge, you won’t have to pay for it or replace it. However, you’ll

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Bone mass measurement (bone density)

This test helps to see if you’re at risk for broken bones. It’s covered once every 24 months (more often if medically

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Breast cancer screening ( mammograms)

Medicare covers screening mammograms to check for breast cancer once every 12 months for all women with Medicare who

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Cardiac rehabilitation

Medicare covers comprehensive programs that include exercise, education, and counseling for patients who meet at least

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Cardiovascular disease (behavioral

Medicare will cover one visit per year with a primary care doctor in a primary care setting (like a doctor’s office) to

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Cardiovascular disease screenings

These screenings include blood tests that help detect conditions that may lead to a heart attack or stroke.

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Cervical and vaginal cancer screenings

Part B covers Pap tests and pelvic exams to check for cervical and vaginal cancers. As part of the pelvic exam,

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Chemotherapy

Medicare covers chemotherapy in a doctor’s office, freestanding clinic, or hospital outpatient setting for people with

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Chiropractic services (limited coverage)

Medicare covers manipulation of the spine if medically necessary to correct a subluxation (when one or more of the

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Chronic Care Management Services

If you have 2 or more chronic conditions that are expected to last at least a year, Medicare may pay for a health care

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Clinical research studies

Clinical research studies test how well different types of medical care work and if they’re safe. Medicare covers some

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Colorectal cancer screenings

Medicare covers these screenings to help find precancerous growths or find cancer early, when treatment is most

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Continuous Positive Airway Pressure

Medicare covers a 3-month trial of CPAP therapy if you’ve been diagnosed with obstructive sleep apnea. Medicare may

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Defibrillator (implantable automatic)

Medicare covers these devices for some people diagnosed with heart failure. If the surgery takes place in an outpatient

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Depression screening

Medicare covers one depression screening per year. The screening must be done in a primary care setting (like a

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Diabetes screenings

Medicare covers these screenings if your doctor determines you’re at risk for diabetes. You may be eligible for up to 2

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Diabetes self‑management training

Medicare covers diabetes outpatient self-management training to teach you to cope with and manage your diabetes.

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Diabetes supplies

Medicare covers blood sugar testing monitors, blood sugar test strips, lancet devices and lancets, blood sugar control

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Doctor and other health care provider

Medicare covers medically necessary doctor services (including outpatient services and some doctor services you get

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Durable medical equipment (DME)

Medicare covers items like oxygen equipment and supplies, wheelchairs, walkers, and hospital beds ordered by a doctor

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EKG or ECG (electrocardiogram) screening

Medicare covers a one-time screening EKG/ECG if referred by your doctor or other health care provider as part of your

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Emergency department services

These services are covered when you have an injury, a sudden illness, or an illness that quickly gets much worse.

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Eyeglasses (limited)

Medicare covers one pair of eyeglasses with standard frames (or one set of contact lenses) after cataract surgery that

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Medicare & You 2017 Guide

Medicare & You Guide

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