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The United States is in the middle of a major shift in the way we provide and pay for medical services. When a doctor wants to bill an insurance company for a treatment they provided you, they have to submit a diagnosis code to the insurer. Recently, this system of codes went through an overhaul, in which many illnesses that had only one code now have four or five. This new system, ICD-10, enables doctors and insurers to communicate more clearly about a patient’s exact issues and what is being done to correct them. However, it’s also very complicated, and the transition has been murky, especially when it comes to Medicare.
It’s actually unclear right now whether this shift will have an impact on the amount of reimbursement doctors receive from Medicare. Medicare has granted a one-year grace period to providers, in which they will not reject a claim for having a code that isn’t quite right. However, in the years that follow it may be possible that more costs come back to the patient. After two years of examining how the codes impact the payment cycle, insurers may adjust their policies. This would mean doctors get less money from the insurer and have to ask the patient to pay more.
This shift is occurring at the same time as a complex increase in Medicare premiums. Since a cost-of-living adjustment wasn’t made to Social Security this year, individuals who pay for Medicare out of their Social Security won’t see a rise in premiums. But any individuals who pay out of pocket or who are new to Medicare will end up paying more. Originally it was projected that this increase could be as much as 59%, but a recent move by Congress to incorporate some relief into the budget has lessened that considerably. However, if a cost of living increase isn’t made to Social Security in 2017, the same issue will arise again—right around the same time the long-term effects of the ICD-10 coding system are becoming apparent.
What all this information tells us is that there’s a potential for Medicare patients to see an increase in the amount they’re required to pay to doctors. Around 1/3 of seniors will also end up paying more for Medicare. The thought of all those costs is overwhelming, especially when they’re costs you know you have to incur to live a healthy life. For Boomers, it may mean that a good chunk of their retirement money will go to inflated healthcare costs. That means adjusting investments and savings now to make sure their retirement money doesn’t run out. If you or a client needs a quick influx of cash, selling an unwanted or unneeded life insurance policy in a life settlement may be an option. You’ll be both saving the cost of the premium payment and receiving added value from the policy.
Life settlements may not work for everyone, but one may be a valuable asset as changes in healthcare continue to push retirees in different directions. Visit our qualification calculator to see if you qualify.
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