Observation status doesn’t count.
Advisors should inform clients about this rule and encourage them to verify their hospital status to avoid unexpected SNF costs.
Olivia’s Medicare Advantage Relief
Olivia had enrolled in a Medicare Advantage plan that featured a maximum out-of-pocket limit, or MOOP limit.
This gave her peace of mind when her healthcare costs started rising, as she knew her out-of-pocket spending was capped for the year.
Unlike Original Medicare, Medicare Advantage plans include an annual cap on out-of-pocket spending.
Advisors should encourage clients to consider MOOP limits when selecting a plan, especially for those with anticipated higher healthcare needs.
Roberto’s IRMAA Surprise
As a high-income retiree, Roberto was surprised to discover that his Medicare premiums were higher than expected due to the income-related monthly adjustment amount, or IRMAA.
This surcharge raised his Part B and Part D premiums based on his income from two years prior.
Advisors should discuss IRMAA with high-income clients, helping them plan for the surcharge.
Advisors can also assist clients with appealing IRMAA if their income drops significantly due to retirement or other qualifying events.
Olivia and Roberto’s Travel Plans and Medicare’s Limited Coverage Abroad
Both Olivia and Roberto had always dreamed of traveling during retirement.
However, they were both surprised to learn that Medicare offers very limited coverage outside the United States.
In most cases, Medicare doesn’t cover medical services abroad unless it’s an emergency.
Advisors should inform clients who frequently travel abroad that Medicare doesn’t provide comprehensive foreign healthcare coverage.
The experiences of Olivia and Roberto highlight the importance of understanding the lesser-known aspects of Medicare coverage.
Advisors play a critical role in helping clients avoid costly mistakes by explaining Medicare’s lesser-known rules.
By guiding clients through enrollment, coverage selection, and planning for out-of-pocket expenses, advisors can help ensure their clients are well-prepared for retirement with a solid Medicare plan in place.
Bethany Cissell is director of business development and a Medicare expert at Allsup, a national disability representation provider based in Belleville, Illinois.
