By Elliot Raphaelson
From the Tribune Content Agency
question: Can you explain the difference between the different Medigap plans and which options are no longer available?
answers: An excellent source of information on Medigap alternatives is Medicare & You 2023, the official US Medicare handbook. The publication is free and mailed to every Medicare household each fall.
You can download the brochure as a PDF from medicare.gov; it is available in several languages and in large print format. You can also download it as an eBook for Kindle. If you need it in Braille or audio format, or if you would like to receive a printed version, call 1-800-MEDICARE or TTY 1-877-486-2048.
The portion of Medicare & You 2023 that relates to this question is Section 5, Medicare Supplemental Insurance.
Medigap policies are sold by private companies and are designed to help those who have Original Medicare pay for some remaining healthcare costs for services and consumables such as co-payments, coinsurance, and deductibles.
There are 10 Medigap plans, and the benefits offered by each of these plans are conveniently listed in a table included in Section 5 of Medicare & You 2023. In general, Medigap does not cover long-term care, eye or dental work, hearing aids, glasses, or private health care.
Medigap must comply with federal and state laws that are structured to protect you. All plans offered offer the same basic benefits, but some, like Plan G, offer additional benefits. In Massachusetts, Minnesota and Wisconsin, Medigap plans are standardized in a different way. If you live in one of these states and would like more information, go to: Medicare.gov/medigap-supplemental-insurance-plans.
Medicare plans available to people new to Medicare on or after January 1, 2020 may not cover the Part B (health insurance) deductible. For this reason, Medigap plans C and F are no longer available for people new to Medicare on or after January 1. However, if you were eligible for Medicare before January 1, 2020 but are not yet enrolled, you may be able to purchase plan C or F. Individuals new to Medicare after January 1, 2020 are eligible to purchase the instead Purchase Plans D and G, which have comparable coverage.
The best time to purchase a Medigap policy is during your Medigap enrollment period. This six-month period begins the first month you have Medicare Part B and are 65 years of age or older. (Some states have additional open enrollment periods.) After this enrollment period, you may not be able to purchase Medigap. It may cost more. If you have delayed enrolling in Part B because of your current employment or that of your spouse, your Medigap Open Enrollment Period will not begin until you enroll in Part B.
If you would like unbiased advice on purchasing Medigap or Medicare Advantage plans, you can request a free consultation from a representative at your State Health Insurance Assistance Program (SHIP). You can find your state contact phone number online or on the back cover of your Medicare manual.
question: I have a retirement plan and I need to withdraw minimum required distributions (RMDs) from the plan each year. I also make annual charitable deductions. I would like to use the Qualified Non-Profit Distribution (QCD) option. I can switch from my retirement plan to a traditional IRA. My advisor suggested that I make the switch to an IRA this year and make a charitable donation through the IRA’s custodian.
answers: I reviewed this option with an attorney from Ed Slott and Co. (IRAhelp.com). She indicated that you could do a QCD of the newly created IRA this year. However, since there was no IRA balance in the IRA at the end of 2021, there is no tax benefit for you from the QCD this year. Only if you perform do you have a charity tax deduction. Since there would be an IRA balance at the end of 2022, next year you could do a QCD in 2023 and get a tax deduction on your 2022 tax return next year since you will have an IRA balance at the end of 2022, and a required RMD based on your age and IRA balance at the end of 2022. It is true that you can only take a QCD-related tax deduction from an IRA, not a retirement plan.
(Elliot Raphaelson welcomes your questions and comments at [email protected].)
©2022 Elliot Raphaelson. Distributed by Tribune Content Agency, LLC.
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