Uncategorized - American Insurance Benefits

Retirees on Medicare Advantage are missing out on crucial coverage, and their health could suffer because of it.

Many seniors choose a Medicare Advantage plan over traditional Medicare because they hope the plan will provide broader coverage. In fact, an estimated 32.8 million people — more than half of all Medicare recipients — were enrolled in an Advantage plan as of 2024.

Unfortunately, these Medicare Advantage plan enrollees are at risk because of a serious gap in coverage. This troubling news comes from a report released by the Office of the Inspector General.

Here are some details on the coverage gap, along with some insight into what this could mean for retirees.

Inspector General reveals that Medicare Advantage has a serious gap in coverage

According to a report prepared by the IG for the Department of Health and Human Services, behavioral healthcare is covered by managed care plans for the majority of Medicare enrollees.

Behavioral healthcare is care for mental health conditions and substance abuse disorders. When this care is available as part of a managed care plan, it is typically covered only if plan enrollees can find an in-network doctor.

Advantage plans must provide a list of in-network providers. This helps seniors enrolled in these plans understand their care options and find a provider who will take their insurance.

Unfortunately, the Inspector General’s report revealed that the majority of Medicare Advantage plans had “limited networks of behavioral health providers.”

Even worse, many of the providers listed as participating in the plan were “ghost providers.” Their showing up on the list makes the network look larger, but they don’t actually provide any services to enrollees.

This is a huge issue, as the networks look comprehensive, but seniors who are signed up for Medicare Advantage plans end up with few to no options for behavioral healthcare.

Missing out on behavioral healthcare can be a huge problem

Previous IG reports have shown that there were fewer than five active behavioral healthcare providers per 1,000 enrollees in Medicare Advantage plans.

Since the Centers for Disease Control and Prevention has warned that around 4% of adults 70 and over suffer from depression, and roughly 17% of the elderly have health problems resulting from drug and alcohol abuse, a lack of access to behavioral healthcare providers could be a huge problem.

Unfortunately, covering this treatment out-of-pocket could put a significant strain on retirees, many of whom struggle to cover their expenses on Social Security and retirement plan distributions.

Retirees who are exploring their Medicare Advantage options should be alert to these issues and should compare plans carefully.

How can Medicare Advantage plan enrollees protect themselves?

If an Advantage plan lists a provider as being in-network, retirees may wish to call and verify this so they ensure they aren’t tricked by a ghost provider. Otherwise, they may not get the care they need, or may have to pay for it out of retirement savings from a 401(k) plan or other sources.

This is just one of many access-to-care issues retirees may face.

While Medicare and Medicare Advantage help provide coverage, there are gaps. Retirees should ensure they invest wisely, so they have the funds they need to cover any medical services that may be required.

Don’t put yourself at risk. We can help with a true Medigap plan that will protect you against these pitfalls.

Andy Orlikoff

www.AZhealth.us

623-742-3878

#surprise,AZ #SunCity,AZ #medicare

8 Sneaky Medicare Penalties That Can Cost You Big (And How to Avoid Them)

Andy | January 21, 2026

Katy Willis

Older woman with white hair looking at paperwork worried

Avoid higher Medicare bills by steering clear of key traps.

You work hard, save what you can for retirement, and then hit 65, only to find out that one missed deadline can increase your Medicare premiums for the rest of your life.

This isn’t obvious when you’re first signing up for Medicare. But these penalties can easily cost you significant money and potentially derail your retirement plan.

If you know the rules ahead of time, you can avoid wasting your retirement savings on sneaky Medicare penalties.

Part A late enrollment penalty

Most people pay $0 for Medicare Part A because they or a spouse paid Medicare taxes for at least 10 years. But if you don’t have enough work credits, you may have to buy Part A and pay a monthly premium instead. In 2026, that’s $311 or $565, depending on how many work credits you have.

If you fall into this group and delay signing up, your Part A premium goes up by 10% for twice the number of years you went without coverage. If you or your spouse doesn’t have enough work credits for free Part A coverage, plan for this during the initial enrollment period, which starts three months before the month you turn 65 and ends three months after.

Part B late enrollment penalty

Part B covers things like doctor visits, outpatient care, lab tests, and equipment. In 2026, the standard monthly premium is $202.90 per month.

But if you sign up late and don’t qualify for a special enrollment, that premium can jump and stay higher for life. You’ll pay an extra 10% for every full year that you could’ve had Part B but didn’t, for as long as you have Part B.

The key to protection is “credible coverage” from current work. If you’re 65+ and covered by an employer health plan from a company with 20 or more employees, you can usually delay Part B without penalty and then enroll during a special enrollment period after your job-based coverage ends.

Part D late enrollment penalty

Medicare Part D helps cover prescription drugs. You don’t have to take a Part D plan at 65. But going without drug coverage or not having a creditable plan can trigger a penalty of around 1% of the national base premium per month that you don’t have coverage.

With the 2026 base premium being $38.99 in 2026, if you went 20 months without coverage, your penalty would be an increase of 20%, or roughly $7.80 extra per month for life.

To avoid triggering this penalty, either enroll in Part D when you first qualify or make sure any other drug coverage you have is considered creditable.

HSA contribution penalties once you’re on Medicare

Health savings accounts (HSAs) have tax-deductible contributions, tax-free growth, and tax-free withdrawals for qualified medical expenses. But once you enroll in Medicare Part A or B, your HSA contribution limit drops to zero, even if you still have a high-deductible health plan through work.

Any contributions after Medicare enrollment count as excess contributions and are subject to a 6% excise tax every year until you withdraw them. You may also suffer an extra 10% tax and back taxes if you sign up for Medicare during the HSA testing period, which is usually one full year from when you sign up for your HSA.

Other ways you could end up paying more for Medicare

Not every extra Medicare cost is labeled a penalty, but some mistakes can end up feeling like one. For example, if you miss your initial enrollment period and don’t qualify for a special enrollment period, you may have to wait for the general enrollment period.

In that case, your coverage may not start until later in the year. That can leave you paying full price for care in the meantime, only to owe late-enrollment penalties on top.

Income-related monthly adjustment amounts (IRMAA)

If your income is higher, Medicare charges more for both Part B and D through income-related monthly adjustment amounts (IRMAA). In 2026, the first IRMAA tier starts for single filers earning more than $109,000 and joint filers earning over $218,000.

For the first tier, you’ll pay an extra $81.20 per month for Part B and $14.50 for Part D, or roughly $1,150 per year per person. At the highest tier, you could pay around $6,936 in extra premiums per person per year.

Some retirees avoid or minimize IRMAA by spreading large IRA withdrawals across several years, using Roth accounts, or making qualified charitable distributions from IRAs. You may also get IRMAA reduced or removed if your income has dropped sharply due to a significant life change, such as retirement, widowhood, or divorce.

Losing your Medigap guaranteed-issue rights

Medigap (also called Medicare Supplement insurance) helps pay Original Medicare’s deductibles, copays, and more. For many people who want the freedom to see almost any doctor that takes Medicare, Medigap is what makes that possible.

You get a six-month Medigap open enrollment period that starts when you’re 65 or older and enrolled in Part B. During that time, insurers can’t deny you a policy, charge you more because of your health, or make you wait for coverage of pre-existing conditions. After that window, in most states, insurers are allowed to use medical underwriting, review your medical history, charge higher premiums, or even refuse you coverage.

Ignoring who pays coverage first

Many people keep employer coverage, Consolidated Omnibus Budget Reconciliation Act (COBRA) coverage, or a retiree plan after 65 and assume it will keep paying their medical bills. But Medicare usually pays first when an employer has fewer than 20 employees. And, once you’re eligible for Medicare, many COBRA and retiree plans also expect Medicare to pay first.

If you don’t enroll in Part A and B when you should, your plan can deny claims or claw back past payments, and you can face big bills plus permanent late penalties. When Medicare is supposed to be the primary, plan to enroll in Part A and B on time, even if you keep your other coverage.

Bottom line

Most Medicare penalties are the result of missing deadlines, skipping coverage, or not understanding how income and HSAs interact with the rules. The problem is that once they hit, they’re often impossible to reverse.

You can avoid wasting money on Medicare penalties by knowing your enrollment dates, income level, HSA contributions, and Medigap timing. If you’re unsure, it’s worth getting advice from a professional.

We can help with your Medicare Insurance in Arizona!

www.azhealth.us

Andy Orlikoff

623-742-3878

Time is Running Out: Navigating the 2026 Health Insurance “Rate Cliff”

Andy | January 19, 2026

It’s January 19, 2026, and if you haven’t secured your health insurance for the year yet, the clock isn’t just ticking—it’s practically screaming. While Open Enrollment for the Health Insurance Marketplace officially closed for most of the country on January 15, a few states (like California, New York, and New Jersey) have extended deadlines through the end of the month.

Whether you missed the deadline or were simply paralyzed by the “sticker shock” of this year’s prices, you aren’t alone. 2026 has brought some of the most significant changes to the health insurance landscape in nearly a decade.

The Perfect Storm: Rate Hikes and Subsidy Cuts

If you logged into the Marketplace this year and saw a premium that looked like a mortgage payment, there’s a reason for it. We are currently facing what experts are calling the “2026 Rate Cliff.”

The Expiration of Enhanced Subsidies: The extra financial help provided by the Inflation Reduction Act expired on December 31, 2025. For many families, this “cancellation” of extra credits means out-of-pocket costs have jumped by 75% or more for the exact same coverage.
Double-Digit Rate Increases: On top of the lost subsidies, insurers have raised base premiums by a median of 18–20% this year, citing rising labor costs in hospitals and the high price of new weight-loss and specialty medications.

For many, the “Affordable” Care Act simply doesn’t feel affordable anymore.

A Flexible Alternative: Short-Term Medical (STM)

If the Marketplace has priced you out, or if you missed the window to enroll, Short-Term Medical plans have become a go-to alternative for 2026.

Unlike the restrictive rules of previous years, many states now allow for extended STM plans that provide up to 3 years of coverage (through renewable 364-day terms).

Why consider Short-Term Medical?

Affordability: Monthly premiums are often 50–80% lower than unsubsidized Marketplace plans.
Speed: Coverage can often start as soon as tomorrow.
Flexibility: You can drop the coverage at any time if a better option (like a new job) comes along.

Note: These plans are best for healthy individuals. Because they are not ACA-compliant, they typically use medical underwriting and may not cover pre-existing conditions or maternity care.

Bridging the Gap with Supplemental Coverage

Because many of the “affordable” plans for 2026—including Bronze and Catastrophic plans—come with very high deductibles, Supplemental Coverage is more important than ever. These plans pay cash directly to you to cover your deductible if the worst happens:

Accident Expense: Covers out-of-pocket costs from ER visits or broken bones.
Critical Illness: Provides a lump sum if you are diagnosed with a major illness like cancer or a heart attack.
Hospital Indemnity: Pays you a set amount for every day you are confined to a hospital bed.

Don’t Go It Alone: Talk to a Local Broker

Navigating the 2026 market is like walking through a minefield. This is not the year to “DIY” your health insurance. A local independent broker is your best resource—and the best part? Their services are usually free to you.

A local broker knows which hospital networks are actually participating in which plans and can help you weigh the risk of a Short-Term plan versus an ACA plan.

How to find a pro:

When you search for a broker in your area, look closely at their Google Reviews. * Are they responsive?

Do they help when a claim gets denied?
Do they actually listen, or are they just “selling”?

A high rating from your neighbors is the best insurance that you’re getting honest advice.

More employers are giving workers money to buy their own health insurance

Andy | September 16, 2025

Kerry Hannon August 16, 2025

An increasing number of employers are offering their workers cash to buy their own health insurance.

Individual coverage health reimbursement arrangements, or ICHRAs, a type of health plan in which employers provide nontaxed contributions to employees to pay for medical expenses, including monthly insurance premiums, are picking up momentum.

According to data, the number of people covered by ICHRAs jumped 50% from 2024 to about 450,000 in 2025.

For decades, health policy analysts and employers have tossed around the concept of shifting from traditional employer-sponsored health insurance to a defined contribution approach — giving employees a fixed amount of money with which to buy health coverage themselves.

But there wasn’t a practical way to do that due to regulatory, market, and administrative hurdles, Paul Fronstin, director of health benefits research at Employee Benefit Research Institute (EBRI), a nonprofit, nonpartisan organization, told Yahoo Finance: “The emergence of individual coverage health reimbursement arrangements may finally offer a scalable vehicle for that long-anticipated shift.”

ICHRAs were created under regulations issued by the Trump administration in 2019 and have been gaining in popularity each year since.

This year, an estimated 500,000 people are covered through ICHRAs, according to data from the HRA Council, a trade association that works with vendors to help employers offer them. That’s up 50% from 2024, still a thin slice of the market for employer-sponsored health insurance coverage. About 154 million people were enrolled in coverage through their employers last year, according to KFF.

Who’s covered

The vast majority of ICHRA adoption is from small businesses with 20 or fewer employees, most of which are offering health coverage for the first time.

“It’s definitely something for small businesses,” Fronstin said. “The market is developing from a group of employers that never offered health benefits or weren’t offering health benefits. It’s really turning into a new benefit for these people that didn’t have access to health coverage through the job. While they’re not actually getting health coverage through their job, they’re getting tax-free money from their employer to help pay for it.”

For now, ICHRAs are playing a role in expanding access to health coverage for people, rather than displacing traditional group plans among larger firms, he said.

Fronstin estimates that up to 700,000 people are in these arrangements.

“There are a number of factors that are driving the expansion of ICHRAs, but also some barriers that still need to be worked out to make it become a little bit more of a mainstay in the health insurance landscape,” Matt McGough, a policy analyst at KFF, told Yahoo Finance.

Nuts and bolts of do-it-yourself plans

It works like this.

Employers generally contract with an outside vendor or broker that helps employees navigate the process.

In Arizona contact:

Andy Orlikoff

623-742-3878

www.AZhealth.us

Workers do their own insurance shopping through individual insurance markets where they can typically find more choices for coverage than a traditional employer group plan that might offer only two or three choices of plans.

With a group plan, employers typically pay for the bulk of the premium. The employer contribution in a group plan depends on myriad factors, from the size of the firm to the industry, location, and the type of health insurance plan — Preferred Provider Organization (PPO) or Health Maintenance Organization (HMO).

While there are no annual minimum or maximum contribution requirements with these do-it-yourself arrangements, employers generally provide anywhere from $500 to $1,000 per month, depending on the cost of healthcare where the worker lives and whether it’s individual or family coverage.

The contribution amount may be a set dollar amount or a percentage of a premium charged by a certain plan. And the plans are portable. If you’re an employee, you can keep the coverage if you jump jobs, although you’ll no longer have the employer’s tax-free contribution.

For small businesses with no more than 50 employees, there is a tax incentive to offer these arrangements. They typically qualify for the health care tax credit, which adds up to roughly half of the employer contribution for two consecutive years.

What’s driving the interest in this coverage

The motivation for employers to offer an ICHRA: cost-control.

The set amount contribution allows employers to predict their costs more accurately than grappling with annual jumps in group plan healthcare premiums.

Half of large employers expect their average healthcare cost to rise by 6% next year, and they plan to reduce their employees’ health care benefits to address those rapidly growing costs, according to a recently released report from Mercer.

An increasing number of employers are seriously considering plan design changes that would shift more cost to employees, such as raising deductibles or out-of-pocket maximums.

No one is saying these ICHRA arrangements are about to overtake the market. It will be a slow and cautious process over the next several years.

“There are a growing number of vendors, many backed by venture capital firms who act as management systems that process the payment and make sure everything is IRS compliant for the tax-advantaged benefits,” McGough said. “And that’s certainly a signal of the market’s momentum.”

Have a question about retirement? Personal finances? Anything career-related? Click here to drop Kerry Hannon a note.

An echo of the shift from pensions to 401(k)s

As group coverage becomes more expensive and potentially unattainable for smaller businesses, an ICHRA could be more attractive, McGough said.

“We’ve heard over and over again from stakeholders across the board that this is like the transition from pensions to 401(k)s moving from that defined benefit to defined contribution,” McGough said. “Whether it will be as revolutionary as the 401(k) remains to be seen.”

“It’s similar in the sense that it’s shifting risk — investment risk and longevity risk from employers to workers,” Fronstin added.

They also shift the responsibility of plan selection and management to the individual.

What will push these arrangements to the next level is ”when a large employer moves into this market and goes out on a limb,” Fronstin said. “That’s going to get everyone else’s attention.”

And this may take a major economic jolt. “The next recession is going to put employers’ commitment to health benefits to the tests,” he said. “If unemployment goes back up to 10% for an extended period of time, like it was in 2010, employers may say, ‘Hey, I’ve got an opportunity here. I don’t need to offer health benefits anymore the way I’ve been doing so to attract and retain employees, so I’m going to do something different.’”

Generally, no employer wants to be the first to make a change that could be seen as radical, particularly in a tight labor market where recruitment and retention are top concerns, per Fronstin. Health insurance is by far the most mentioned benefit when a worker is deciding whether to stay at or leave a current job.

Kerry Hannon is a Senior Columnist at Yahoo Finance. She is a career and retirement strategist and the author of 14 books, including the forthcoming “Retirement Bites: A Gen X Guide to Securing Your Financial Future,” “In Control at 50+: How to Succeed in the New World of Work,” and “Never Too Old to Get Rich.” Follow her on Bluesky.

Category: Uncategorized

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