Sound Advice

Medicare: A few more issues   Many people look forward to Medicare as the primary source of funding for health problems they will be facing as they get older.   No doubt, Medicare can be a big help, but there are several caveats. For one thing, physicians who accept Medicare patients may be doing so at costs that exceed the reimbursements they get from Medicare.   Those who do accept Medicare have to assume that the shortfall will be made up by other patients.   You may still be able to see a physician of your choice, but you will be responsible for payment.   Of the various medical specialties, psychiatry has the largest share of practitioners who have opted out of Medicare: 42%.   If you are enrolled in original Medicare and your doctor opts out of the Medicare program, you can find and compare health care providers near you at http://www.medicare.gov Medicare reimbursement rates have spiraled downward over the years and are typically even lower t...

FAANGs?   No, that’s not a typo.   It’s about the ongoing disparity between overall market returns and the price action of a few large tech companies for nearly a decade.   Until recently, FAANG stood for Facebook, Amazon, Apple, Netflix, and Google. Although Google renamed itself Alphabet and Facebook morphed into Metaverse, current conversations continue to speak of them as before. A distant cousin of the FAANGs emerged almost a half century ago.   That cousin was known as the Nifty Fifty, which included such names as General Electric, Coca-Cola, and IBM.   The Nifty Fifty group also included Xerox, Polaroid, and Eastman Kodak.   What the FAANGs have in common with their ancestors is extraordinarily high price-earnings ratios (i.e., valuations).   These were referred to as one-decision stocks. Wharton professor Jeremy Siegel suggested that investors could buy them and hold forever, but that suggestion didn’t turn out well.   The extreme be...

Medicare 301 Beyond the basics of Medicare Parts A, B, and D lies Medicare Advantage, an all-in-one plan that includes the major parts of Medicare as well as coverage for additional services.   The additional services covered include vision, hearing, and dental.   What’s more, these plans may have lower out-of-pocket costs.   Currently, more than 40% of Medicare beneficiaries are enrolled in Medicare Advantage plans.   That percentage is increasing.   Most of these plans are provided by UnitedHealthCare, Humana or BlueCross BlueShield. Medicare Advantage plans come in several varieties, though most are Health Maintenance Organizations (HMOs) or Preferred Provider Organizations (PPOs).   HMOs are usually the least costly and require that participants receive services from assigned providers.   What’s more, certain requirements must be met in case of emergencies before the plan will pay for services provided. PPO participants are free to use the ...

Medicare 201   Coverage of outpatient prescription drugs under Medicare Part D began on January 1, 2006.   Part D is an optional plan that is available to everyone enrolled in Medicare Part A and Part B.   There are numerous plans available and there are considerable differences in ongoing plan prices as well as drug costs. Let’s begin with some basics.   One of the most important is the formulary, the list of prescription drugs (both name brand and generic) preferred by the health plan.   There are copays for those that are on the list.   For drugs not on the list, the patient may have to pay full price.   Formularies change annually and drugs that have been included in the formulary may switch from preferred to nonpreferred or be removed entirely. Within the formulary there are different tiers for the drugs included.   Tier 1 is generic drugs, which have the lowest possible copayment.   Tier 2 includes brand-name drugs that do not hav...