The Basics of Medicare: How to Choose the Right Plan for You

The Basics of Medicare: How to Choose the Right Plan for You

When you reach 65, you face an important milestone: You are now eligible for Medicare.

Contrary to popular belief, Medicare is not free, and it’s important to understand the ins and outs of Medicare before you sign up. Making the wrong choices can be expensive.

Even if you’ve been on Medicare for years, you may want to re-evaluate your options annually to make sure you’ve got the right plan. The annual open enrollment period, during which you can switch Medicare plans, runs Oct. 15 through Dec. 7.

“I think everyone should consider switching,” says Lita Epstein, author of “The Complete Idiot’s Guide to Social Security and Medicare.” “Plans change, benefits change and the premiums change.”

It’s especially important to re-evaluate your options if you have a Medicare Part D drug plan or a Medicare Advantage plan because those plans can change significantly from year to year, dropping and adding drugs and doctors or changing copays and deductibles. “Even if they’re completely happy with their plan, they have to look because things change,” says Diane J. Omdahl, founder and Medicare expert at 65 Incorporated, which helps people choose Medicare coverage.

Medicare plans are actually broken into multiple parts:

  • Part A covers hospital care, skilled nursing, hospice and some home health care. If you or your spouse has at least 10 years of Social Security work history, this part is free. If you don’t have that work history, it can be up to $413 per month. Your premium amount is determined by how many Social Security work credits you have.
  • Part B covers doctor visits, preventive care, outpatient care and hospitals, and some home health care. In 2017, this part will average $109 a month for most Medicare beneficiaries whose incomes are $85,000 a year or less ($170,000 for a couple) and up to $428.60 for those whose annual income exceeds $214,000 ($428,000 for a couple). About 30 percent of beneficiaries will pay $134 per month, up from $121.80 in 2016. Most people find they need a Medigap plan in addition to parts A and B.
  • Part C is also known as a Medicare Advantage plan. It substitutes for parts A and B and, in most cases, Part D, the drug plan. Premiums range from zero dollars to more than $100 a month, varying by location and coverage. According to the Centers for Medicare & Medicaid Services, the average premium in 2017 will be $31.40, down slightly from 2016.
  • Part D covers prescription drugs. Premiums are about $15 to $50 per month, with the average in 2017 expected to be $34 per month, up about $1.50 from the previous year.

About 32 percent of Americans are expected to choose Medicare Advantage plans next year, according to the Centers for Medicare & Medicaid Services. Those plans, a combination of HMOs and PPOs, have an out-of-pocket limit, and the average out-of-pocket limit was $5,223 in 2016, according to the Kaiser Family Foundation. Customers tend to pay more in copays and coinsurance than they do with traditional Medicare, plus have access to fewer doctors and hospitals. Some of the plans include vision, dental and hearing coverage, which is not covered by traditional Medicare, but those services are offered from a limited network of providers. “If you’re healthy and you’re younger … it can be cheaper,” Epstein says. “If you absolutely can’t afford to take a Medigap supplement, a Medicare Advantage plan is going to be the best option.”

Her advice to those who can afford it, however, is to choose traditional Medicare with a supplement because that option offers greater access to top specialists and doesn’t require the insurance company to approve specific treatments. “Managed health care is going to be managed by the insurance company,” she says.

“It’s very, very important that you look at those copays and compare them,” Epstein says. “By the time you figure in one hospitalization, it’s about the same,” she says of the total cost of traditional Medicare and Medicare Advantage plans.

No matter what your retirement age, you become eligible for Medicare when you turn 65and you can sign up the three months before your birthday, your birth month and the three months after. If you don’t sign up during this seven-month period, even if you’re still working, you may face a long-term penalty. “They cannot wait until the last minute because of the backlog at Social Security,” Omdahl says.

She warns those signing up for Medicare to pay attention or they may be enrolled in a plan they don’t want. Insurance companies are allowed to sign current customers up for their Medicare Advantage plan unless they specifically say they don’t want the plan. To opt out, they have to respond to a letter from their current carrier, which can easily get lost in all the ads for new Medicare members.

“Anybody turning 65 will tell you that your mailbox is not big enough for all the insurance mail that you get,” Omdahl says. This practice, called “seamless conversion,” has existed for a while, but more insurance companies appear to be using it, she says.

If you start with traditional Medicare and a Medigap supplement, your supplement rate is not based on your health record. But if you start with a Medicare Advantage plan and then switch to traditional Medicare later, the company offering the supplemental coverage will base your premium on your health history and may even deny coverage. “It’s a real risk because everybody’s going to get something as they get older,” Epstein says.

Americans who are very low income may be eligible for extra help with Medicare premiums and health care costs. Beneficiaries in this financial situation can find additional guidance from

The system is complex, and most people should seek help when choosing a plan. The U.S. News Best Medicare Plans site can help you navigate the options and get the right medical coverage, and you can also find information at and If you’re considering several Medicare Advantage plans, call the company that offers each one to verify that the coverage is what you think it is.

You can find ratings of Medicare Advantage plans from the National Committee for Quality Assurance. You can also get phone or in-person help from your State Health Insurance Assistance Programs. Those agencies often maintain office hours at senior centers or other locations. U.S. News also highlights the Best Medicare Advantage Plansand Best Medicare Part D Plans.

4 Ways to Protect Yourself From Financial Disasters

4 Ways to Protect Yourself From Financial Disasters

Here’s how to prepare for unexpected bills and survive financial disasters.

Woman worried about financial problems.

Don’t let unanticipated expenses derail your financial plans.

 When it comes to unexpected bills, such as car repair or medical bills, most of us are not prepared. And as financial disasters, such as a job loss or a debilitating medical condition, get more serious, the less prepared we are. A 2015 study from the Pew Charitable Trusts found that more than half of Americans are not prepared for unexpected bills. Another Pew study from 2015 found that 55 percent of American households did not have the cash savings to replace one month of income. While worrying about the unexpected will keep you up at night, there are some simple steps you can take to prepare your finances and ease your mind.

Understand your current finances: You can’t prepare your finances unless you have a clear picture of your income and spending. First, determine your average monthly income, including salary and any other money you bring in. Then list your average monthly spending, including everything from your student loan debt or car payment to what you spend on hobbies or entertainment. Add up all your spending and that is your total expenses for the month. If your income is higher than your expenses, then the difference is what you can apply to saving for the unexpected. If your expenses are higher than your income, then you need to evaluate your finances and find ways to reduce your spending.

Make an emergency budget: Once you have a clear picture of your finances, you need to calculate the minimum you need every month to cover your expenses. Start by prioritizing your bills. Look at your expenses and list just your monthly necessities. These are expenses you couldn’t live without or need to pay every month, such as rent, mortgage, car payment, groceries and utilities. Now list your optional spending, such as a gym membership, cable TV, eating out and Netflix. The total of your necessities is what you need on hand every month.

Examine your optional spending and see if there is anything you can drop or reduce. Instead of going out to lunch every day, go out every other day. Instead of the full cable package, go for the basic channels. Whatever is left on the list is now your emergency budget. If something unexpected does happen, the emergency budget is the first place you can go to drop the spending you can live without and lower your expenses.

Get your finances in order: With all your information in front of you, now is the time to evaluate your finances. If you have credit card debt, look to pay off or pay down your credit card balances. Keeping your credit card balances down gives you more available credit for emergencies. Is the interest rate on your mortgage high? You might be able to refinance at a lower rate. Make sure you’re contributing the full amount to your retirement fund or 401(k).

You should also check whether you are adequately covered with insurance. Check your health insurance to see whether you and your family have the right coverage in case of a medical emergency. Check your homeowners or rental insurance to make sure you are covered in the event of a natural disaster. Consider getting optional coverage such as life insurance or disability insurance to make sure you and your family are taken care of if the worst happens.

Build an emergency fund: One of the most important tools you can have to prepare for financial disasters is an emergency fund. Usually kept in a savings account, so you can easily access it when you need to, an emergency fund is money you set aside to cover your essential bills. The goal is to have at least enough money to cover you for three months. This money would go to living expenses such as food and rent. Most households don’t have that much, so don’t panic.

 Even if you are starting from zero, having that total of your essential expenses gives you the number you need to reach. Contributing what you can afford each month will still give you that much more of a cushion in case of an emergency. Once you reach your three-month number, don’t stop contributing. Financial disasters can come in unexpected ways, so the more you have, the better your chances to make it through.
7 Foods to Buy When You’re Broke

7 Foods to Buy When You’re Broke

If you’re confined to a strict food budget, you should consider green vegetables, brown rice or beans.

Woman reading her shopping list in the supermarket

Trying to live on a food budget of about $4 per day can be quite a challenge. People quickly discover this when they take the Food Stamp Challenge and try to learn what it’s like to be poor for a week.

The challenge mirrors what someone can get through the Supplemental Nutrition Assistance Program, or SNAP, the federal program that helps low-income people buy groceries. One in seven Americans receive the benefits, which were significantly reduced by Congress in November.

To qualify, a family of four can have an annual net income of up to $23,556, which puts them at the federal poverty level. They would then receive up to $632 a month in SNAP benefits, which equates to about $5.25 a day per person for food. The average SNAP recipient receives $4 per day, according to the Food Research and Action Center.

While getting this extra money can mean the difference between eating and going hungry, the limited funds can make it difficult to choose which food to buy. Getting the most nutrition for your money can be hard when you don’t have a lot of money for groceries, but it’s not impossible.

According to dieticians and nutritionists, some foods are better than others when you’re trying to stretch a dollar. Here are seven that you should consider when funds are tight:

Brown rice. The vitamins, minerals and antioxidants are some of the benefits, but one of the biggest pluses may be that the high amount of fiber in brown rice helps slow digestion and fill you up for a long time.

“Fiber is one of the best [nutritional components] that helps with satiety, or the feeling of fullness,” says Rachel Begun, a food and nutrition consultant in Boulder, Colo.”They also help to spread the food dollar because they’re a component of meals that can help you make a fulfilling dish.”

Beans. Like many items at the grocery store, buying in bulk can save a lot of money. Dry beans can cost about $1 per pound and expand to three times their volume when cooked, turning three to four cups of dry beans into nine cups when cooked, says Carol Wasserman, a certified holistic health practitioner in Manhattan.

And beans, like rice, can be flavored with spices and herbs to make the main portion of a meal.

“We have to kind of shift our thinking from having the meat be the center of the plate,” and be more creative with other dishes, such as rice and beans, says Julieanna Hever, a plant-based dietician in Los Angeles and host of a healthy living talk show on Veria Living.

Beans are also a very healthy choice. They are high in fiber and protein, low in fat and sodium and have minerals such as iron, potassium, magnesium, copper and zinc, along with vitamins such as folic acid, thiamin, niacin and B6.

Potatoes. These versatile vegetables can be added to casseroles and used in a variety of ways, and they’re every bit as nutritious as colored vegetables, Begun says. They contain 45 percent of the recommended daily nutritional intake of vitamin C, 18 percent of fiber and 18 percent of potassium, a mineral that regulates blood pressure, she says. They’ve been found to have the lowest cost source of dietary potassium.

The average potato is virtually fat free, with a high water and fiber content to make it ideal for weight-loss at 200 calories for an average baked potato, according to information from Be careful how you cook them. Frying a potato raises fat content from 0 to 8 grams.

Green vegetables. Any leafy greens, such as broccoli, spinach and kale, have lots of nutrients per calorie and help protect against inflammation and disease, Never says. Some lettuces can be bitter, she says, but can be offset in a salad with carrots, beets and other sweet vegetables.

“People aren’t really used to it,” she says of bitter greens such as kale. “It’s kind of a taste bud transition that some people have to get used to.”

Instead of buying an expensive dressing for any of these foods, Wasserman suggests mixing a tablespoon of extra virgin olive oil with juice from half of a lemon or lime.

Frozen vegetables. Buying fresh vegetables in season is an inexpensive way to get them, but frozen vegetables are a good option too, Begun says. They’re picked at the peak of their flavor and aren’t nutritionally inferior to fresh ones. The downside of fresh vegetables is they might be picked before their height of ripeness and often travel many miles to a grocery store, she says.

Peanut butter. This is another economic source of protein, rich in healthy fats, vitamins, minerals and antioxidants. Peanuts contain resveratrol, an antioxidant found in red wine, says Sharon Palmer, a Duarte, Calif.-based food and nutrition writer who covers plant-powered diets.

Protein bars. You may not want to make them the only part of your diet, but they obviously have protein in them and cost about $2 each. Andrew Ross and his wife, who live in Baltimore, eat a Quest protein bar from GNC every three hours from when the time they wake up until when they go to bed. They started this habit in April and he’s lost 78 pounds so far.

They also eat Power Pak pudding once a day, which contains 30 grams of protein per can and less than 200 calories. The protein bars have 20 grams of protein and less than 200 calories. Ross estimates that they spend less than $400 per month on food and drinks, saving money by buying in bulk during sales.

The best answer to getting the most nutritional foods for your buck may be to simply buy fresh food that’s in season and not to fall for the theory that fast food is cheaper than what you can purchase at the grocery store. “People don’t think out of the box,” Wasserman says. Fast food may be quicker than preparing a meal at home, but it won’t beat buying fresh fruit and vegetables in taste or cost, she says.

4 Simple Ways to Keep an Eye on Your Credit

4 Simple Ways to Keep an Eye on Your Credit

In the wake of the Equifax data breach, many Americans are rightfully concerned about their credit. Will someone be using their identities to take out loans? The fact that there’s wildly different advice from different sources makes things even more confusing.

In any situation where you feel uncertain about your credit and your identity, it’s a good idea to step back, take a breather and get back to the basics of simply keeping an eye on your credit. Not only is managing your credit a really good way to make sure that identity thieves stay away, it also helps ensure that you’re going to be able to get loans when you need them, be eligible for lower insurance rates and qualify for the other little perks that come with good credit.

Here are four steps you can take to always keep an eye on your credit and ensure that it’s healthy.


Keep your bills paid and don’t let your credit card balances grow. Believe it or not, your ordinary bills are one of your most powerful windows into your credit. Simply having your bills up-to-date and not carrying a large balance on your credit cards (small balances are OK) is enough to ensure that your credit is in pretty good shape, as those two factors are crucial elements in determining your credit score.

This part is as simple as can be. Just keep your bills paid. Don’t fall behind on them. If you can’t pay off your credit cards in full, at least make sure to make minimum payments on them and keep the balance well below your credit limit.

If you can do that, you’re guaranteed to have a strong credit foundation, regardless of any mishaps or anything else that happens, as those things are generally fixable. Having strong credit to begin with makes it easier to identify actual credit problems, fix those problems and recover from them.


Get your free annual credit report each year and review it. The Fair Credit Reporting Act requires each of the three major credit bureaus to provide a free copy of your credit report each year upon your request. These credit reports provide a direct look at your credit and can quickly help you identify whether or not you’ve got incorrect marks on your credit report that are dragging down your score.

Here’s the catch: A bunch of businesses have jumped onto that bandwagon and bundle your actual free credit report with a bunch of their own paid services that you don’t need and likely don’t even want.

The only place that the Federal Trade Commission has sanctioned to give you your credit report directly for free is At that site, you can access your credit report from each of the three credit-reporting bureaus every year and see for yourself what information is on them.

It’s a good idea to not access all three at once. Instead, examine your report from one bureau, then return in four months to examine your report from a second bureau, then return four months later to examine your report from a third bureau. After that, you can cycle back to the beginning. All of these reports are free – they’re your right as a citizen, so take advantage of them.

If you do find something incorrect in your credit report, track it down. Contact the company or organization that placed that incorrect information and see what needs to be done to have it fixed.


Review your bank statements and credit card transactions. Another nefarious way that your credit can be tainted via identity theft is if a hacker gains access to your credit card or to your bank account (often via a debit card). Often, the hacker will run small transactions through that account that won’t set off any red flags and won’t get noticed unless you pay attention.

The best way to detect this is to sit down with your monthly credit card and bank statements and review them transaction by transaction. If you see transactions you can’t identify, spend some time figuring out what they are. Contact the credit card company or your bank and ask about that transaction in detail.

If you find transactions that you didn’t authorize, cancel your card and have a new one issued for the account. It’s likely that someone has unauthorized access to the account through your card. If it’s a bank account, talk to your bank about sensible next steps to take, as the breach may be affecting other accounts and may not necessarily involve your card.


Ask for your credit score when you’re actually using your credit. Many people want to know their credit score, as it is a good description of the relative health of one’s credit. Unfortunately, many services that allow you to see your credit score show estimates or bundle them with expensive packages.

One way to get around that is to simply ask to see your credit score when you’re in a situation where your credit score might be accessed or calculated, such as when you’re applying for a loan at a bank or credit union. Quite often, the financial institution will share that information with you at the end of the process of evaluating your application.

 Credit scores aren’t necessary information, but they do provide a useful summary of your credit history. If your score is lower than you expect, then you know it’s time to start doing some financial detective work.

Keeping an eye on your credit doesn’t have to be a full-time job, nor does it have to be an expensive process. Most of the tools you need are free and easily available. The key part of the equation is you – you have to sit down, go through those reports and see whether anything is amiss. Good luck

5 Secrets of Super Savers Living on a Single Income

5 Secrets of Super Savers Living on a Single Income

Think you can’t get ahead financially on a single income? These families show how it’s done.

A woman looking at a money jar

When your income rises, it’s tempting to upgrade your family’s lifestyle, but this can undermine savings goals. (Getty Images)

With many dual-income American couples living paycheck to paycheck, single-income families may feel even more pinched, especially since they don’t have the security of another income if one partner loses their job.


However, as these families prove, it’s not how much you earn, but rather how much you save that makes the difference, whether you’re a single parent, a stay-at-home mom or dad or you have another family structure. U.S. News talked to three families about how they managed to save a big chunk of a single income.


Focus on the big three costs. All three families committed to saving money rather than letting money slip through their fingertips. That mindset shift helped them make more purposeful spending decisions. Jackie Cummings Koski, a single mother in Southwest Ohio, a financial literacy advocate and author of the book “Money Letters 2 My Daughter,” suggests focusing on saving in three main expenses: housing, transportation and food.

“Rather than trying to cut expenses more if you feel like you’ve already cut to the bone, look at things that are already in your life that you might be able to do a little bit smarter,” Koski says. For instance, whenever she gets a car loan, Koski shops around for the best rate instead of just accepting whatever financing the dealer offers. She also recently compared prices on car insurance and saved $300 a year by switching insurers. While there’s nothing wrong with couponing, you’d have to clip many coupons frequently to save $300.

Rein in what you can. Kim Anderson was a stay-at-home mom in Georgia when she and her husband managed to pay off their $93,000 mortgage in two years on his income. “Just because [a non-working spouse is] not getting a paycheck doesn’t mean they can’t make forward progress,” Anderson says. “As a stay-at-home wife, I knew that there were things that I control financially, and the first thing I could do was groceries. I switched to only shopping with cash, so I wouldn’t be tempted to overspend.”


Anderson, who is author of the recently released book “Live. Save. Spend. Repeat.: The Life You Want with the Money You Have,” and now lives in North Carolina, stresses the importance of still enjoying life while aggressively saving or paying down debt. “We really valued still being social so we found ways to eat at home and feed a crowd,” she says.

Use retirement benefits. With one income, retirement savings become even more important. Koski says she spent time educating herself and taking advantage of everything that was available in her 401(k). Her employer offers a match on her 401(k) contributions, so she would not only get a match, but also max out that account, she says. Automatic contributions to a retirement account make it easier to save. Plus, the employer match amplifies her savings over time. Koski also contributes to a Roth IRAand a health savings account.

For couples who file joint taxes where one spouse isn’t working, the working spouse can contribute up to $5,500 per year (or $6,500 for those over age 50) to a spousal IRA. If the working spouse does not participate in an employer-sponsored retirement plan, the full contribution is tax-deductible. If the working spouse does participate in an employer-sponsored plan, the deductibility depends on income and tax filing status.

Get creative with housing. After living on a single low wage for several years with his young family, David Coss and his wife Kim managed to retire in 2012 at age 40. They’re currently in Brisbane, Australia, where Coss runs the blog One of the decisions that made early retirement possible on a single income was nontraditional living situations.

“Just after we got married, we had some Chinese homestay students,” Coss says. The trade-off was some loss of privacy but the students helped furnish their home. Later, they converted the house into two separate units. They moved into the upstairs unit and the rent from tenants downstairs subsidized their mortgage. They now rent out the entire house.

As their family grew, Coss ran a furniture business while his wife cared for the children. “Sometimes we weren’t earning any money at all,” he recalls. Still, they made it work because the furniture warehouse had a large area that was converted into living space. “It had a shower, toilet and kitchen, but everything was kind of basic,” Coss says. “In our bedroom, we had to tread quietly because it was over the next door business.” Coss admits that it wasn’t ideal, but says, “[not paying rent or a mortgage] saved us so much money.” When people asked when they were moving into a real house or told him that they couldn’t live in a warehouse, he shrugged them off.

Don’t fall for lifestyle inflation. When your income rises, it’s tempting to upgrade your family’s lifestyle, but this can undermine savings goals. Koski says she saved a bundle by staying in her home, even though she could have afforded a bigger or fancier property as her income grew. “There’s so much money that flies out the window when you’re moving often,” she explains. “I stayed in an area that has very low cost of living. [My daughter] loved that home. It was close to the schools, so we stayed in that home.”

The same applies to buying a car and making other major purchases. A more expensive home often means higher property taxes and more space to heat and cool, while a fancier car might require more expensive repairs and premium fuel. Instead of trying to keep up with the Joneses, Koski stayed content with what she had and invested money from her raises over time to grow her net worth.

Is Your Lender Judging You?

Is Your Lender Judging You?

How asking for a loan is a lot like asking someone on a date.


You may want to borrow money to reduce your stress, but your stress is what stresses out lenders.

Whether you realize it or not, asking for a loan can be a little like asking someone out on a date.

The moment a person is asked on a date, he or she obviously sizes up their prospective partner. Few people would say, “Yes, let’s go on a date,” if they didn’t think there was something positive about the person doing the asking.

Lenders are the same way. They’re going to size you up, and if they don’t like what they see, you’re going to be told in a cold Dear John letter that it’s you and not them (lenders don’t exactly let you down easy).

And while the credit score and credit history are the most important reasons why a lender, or its computer algorithm, will accept or reject you, there’s another, often forgotten, factor that can come into play: consumer behavior. It might be helpful the next time you’re in the market for a loan to remember that. Because, yes, your lender is judging you.

Lenders find it a turnoff when a borrower is in stress. Joshua Weiss is the CEO of TeliApp, a software company that is currently integrating and testing their artificial intelligence engine, Draconis, with two banks. Draconis, Weiss says, “detects and analyzes trends and predicts human behavior.”

You may want to borrow money to reduce your stress, but your stress is what stresses out lenders, according to Weiss.

Banks want to obviously predict which consumers are safer lending risks, Weiss says, adding: “These predictions are done based on their purchasing habits. Not just what they bought, but rather when they purchase the products, where they were when the purchases were made, what succession were the purchases made, there are dozens of valuable data points that, when analyzed, can tell us a lot about a person and their habits; not only purchasing, but even general likes and dislikes.”

So if you are under stress, and especially if you know you’re going to be applying for a loan in the near future, try to stay under the radar. In other words, go exercise. See a movie. Do something to ease your stress that a lender can’t criticize you for. If you’re going to take out a home equity line of credit or ask to have the credit line on your credit card raised in the near future, so you have extra financial padding, you probably don’t want to use your credit card at a handful of casinos and bars. Not that there’s anything wrong with either activity, but if you never go to a casinos and bars, and you suddenly do before taking out an expensive loan, a lender who learns of those activities could connect the dots and make some unhelpful conclusions.


You can scare lenders off by looking like you’re stretching yourself too thin. Generally, a lender won’t know if you’re on the verge of a divorce or in the middle of a court case in which you could lose your shirt, but if they find out, that can be a good reason to reject a loan.