During the week of July 15, CMS released additional guidance regarding Medicare Prescription Payment Plan (MPPP) outreach and education. The MPPP, sometimes referred to as “smoothing,” was established in the Inflation Reduction Act (IRA) and allows Medicare beneficiaries with Part D to opt into an alternative payment structure for their cost-sharing for covered Part D medications.

Starting in 2025, people enrolled in a Part D plan will have the option to spread their out-of-pocket Part D costs over the calendar year rather than paying directly at the pharmacy counter. It is critical to keep in mind that the program does not reduce or increase a person’s Part D cost-sharing obligations–it only shifts them. This program launches at the same time as other Part D restructuring changes included in the IRA, most notably the establishment of a $2,000 out-of-pocket cap.

As described by the IRA and CMS, when someone opts into the MPPP, their plan will communicate that election to their chosen pharmacy as part of their payment transaction. At the point of sale, the person will not be charged. Instead, the plan will pay the beneficiary’s cost-sharing obligation–deductible, coinsurance, or copay, depending on their plan details–to the pharmacy. Then, using a formula outlined in the IRA statute, the plan will send the beneficiary a monthly bill. Opting into the program does not change how enrollees move through the Part D benefit or what counts toward their deductible or $2,000 out-of-pocket cap.

Whether the MPPP will be a good choice for a particular beneficiary will depend on a variety of individual circumstances and preferences. In the most recent guidance, CMS requires plans to identify and conduct outreach to individuals who are likely to benefit from the program–those who incurred $2,000 in Part D cost-sharing expenses between January 1 and September 30 of 2024, and those who, in 2025, incur out-of-pocket costs for a single prescription that equal or exceed $600. The guidance also provides some examples of beneficiaries less likely to benefit from the MPPP. For example, people with relatively low or stable Part D cost-sharing across the plan year and those who are unlikely to reach the $2,000 cap could see a less even distribution of costs under the MPPP, with higher bills in the later months of the year. This is due to the cumulative effect of one’s prescription drug costs and the MPPP’s monthly billing structure. The guidance also notes that people are unlikely to experience significant benefit from opting into the program late in the year, since their costs could only be spread over the remaining calendar months and directs plan outreach to focus on pre-plan year and early month education.

CMS also released model materials and a MPPP timeline. This and previous guidance is available on the CMS page devoted to the Inflation Reduction Act, under the “Part D Improvements” tab. CMS also announced that Medicare Plan Finder will feature a cost preview feature that incorporates the MPPP as an option and plans for training for SHIPs and other partners to take place this summer and in early fall.

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Published by: AARP

Sometimes we forget to think things through before wrapping up our financial year. That’s why AARP is offering this unusual year-end advice list to retirees: financial moves you should not make before the end of 2023.

Much of the list is solid advice about financial moves you’d be smart to hold off — for tax purposes — until 2024. In other cases, it’s simply a reminder that while the end of the year is typically a terrific time to review your portfolio, that doesn’t mean you should make a bunch of financial moves just for the sake of making them.

1. Don’t realize capital gains before the year-end unless you use them to offset losses. “It’s the biggest mistake people make,” says Tom Balcom, a certified financial planner in Lauderdale-By-The-Sea, Florida. By patiently waiting until the calendar changes to January, you can delay paying taxes on these gains until 2025, he says.

Most people don’t even think about this, and if they need cash for, say, college tuition or a car payment, they sell without considering the potential tax implications, Balcom says.

2. Don’t take home a workplace bonus in December that you can possibly delay and accept in January. If you delay the bonus until January, that relieves you of any tax implications for a full year, Balcom says.

While it’s true that many companies won’t delay the year-end bonus until the following year, it’s worth asking because the worst they can say is no, he says.

3. Don’t spend money you don’t have. While retired folks, in particular, might like to give generously to kids and grandkids at holiday time, don’t give or purchase anything that you can’t pay off within a few months, says Crystal McKeon, a certified financial planner in Houston.

4. Don’t get divorced in December. Instead, for the best tax filing outcome, it’s usually best to wait until January, says Sara Stolberg Berkowicz, a certified financial planner in Skokie, Illinois.

She knows this very personally because that was the advice she received — and heeded — two decades ago when she divorced. After all, married couples typically receive better breaks on their taxes, and their filing status is determined on Dec. 31. So, for example, if your divorce is finalized on Dec. 30, your tax status for the entire year will be single — not married — even though you were married for 99 percent of it.

5. Don’t pay all bills exactly when they are due. For example, many folks have property taxes due or want to give sizable charitable donations at the end of the year. You might, instead, choose to make two property tax payments (or two “annual” charitable deductions) in one year, Berkowicz suggests.

This way, instead of receiving the standard deduction, if you bunch the payments into one year you might qualify for a more tax-advantageous itemized deduction. That’s ending the year tax-smart.

6. Don’t let unused services follow you into 2024. Use the end of the year as a reminder to review your recurring bills and make certain that you are using all of the services for which you’re paying, McKeon says.

7. Don’t forget to take your required minimum distributions (RMDs). The actual age for RMDs seems to be a moving target. In 2023, the federal government raised the age at which you must begin taking RMDs to the year after you turn 73.

If you fail to take the RMD — and the IRS catches you — it can penalize you up to 50 percent of the value of the distribution. “It’s really crazy that the IRS charges that high a fee,” says McKeon, so it’s critical to remember to take the distributions.

8. Don’t buy mutual funds in December. If you purchase mutual funds in December, there’s a good chance you’ll be on the hook for a capital gains tax payout for 2023, notes Balcom. If you buy today and get a capital gains distribution next week, you’ll owe taxes on money you didn’t earn.

9. Don’t forget to choose the appropriate tax filing status. This might sound simple, but there can be a more nuanced approach, says Sullivan. Your filing status is determined by your status as of the last day of the year. If your marital status has changed or one of your kids has aged out and there’s a change in the number of dependents in your family, you want to ensure that’s clear on your tax form.

The post 9 Financial Moves to Avoid Before the New Year appeared first on C-Medisolutions.

Part A and B, or the “Original Medicare,” is run by the federal government. You will pay your Medicare Part B premium and your Part A premium if you have a premium directly to your Medicare. There are several methods to establish your payments:

• You can enroll in Medicare Easy Pay. This free online system allows Medicare to automatically deduct your premium from your bank account. To register, you will need to mail in a form and wait six to eight weeks for processing.
• Suppose you are already receiving retirement benefits through Social Security or the Railroad Retirement Board. In that case, your premium or monthly payments will be automatically deducted from your benefits payment.
• Suppose you are a Federal retiree receiving an annuity from the Federal Office of Personnel Management. You do not receive Social Security. In that case, you will not have your premium automatically deducted from your annuity payments. However, you can request automatic deductions through Medicare.
• You can also take advantage of your bank’s automated bill payment system, if available to you. Your bank will automatically make the payments from your account each period.
• If you don’t like automated payments, you can mail a check or money order, credit or debit card payment manually.

When your payment is not withdrawn from Social Security

If you do not receive Social Security retirement benefits yet, Medicare will send you a bill in form CMS-500. It will list the dates your payment will cover, usually the next three months. If you missed a payment or had a change in your premium amount, your bill shows that. Usually, you will receive your invoice around the 10^th of each month. Payment is due on the 25^th. Medicare bills quarterly, so you can expect a bill every three months. However, if paying a full quarter at once creates financial difficulties, you can contact your local Social Security office to request monthly bills.

Although your bill will be due on the 25^th of each month, Medicare offers a three-month grace period for you to make your payment. After this grace period finishes, you will receive two notices in the mail to remind you to pay. After which, Medicare may disenroll you from Part B. If your Part B coverage is disenrolled, you will need to re-enroll during the next open enrollment period. Your coverage will not start again for a couple of months after that. You could also face permanent late enrollment fees, which could increase your premium for the rest of your life.

Paying for Part D

Suppose your income is below $87,000 per year or $170,000 if you’re married and file jointly. In that case, you can simply pay your Medicare Part D premium directly to the private insurer that issued the policy. Suppose your income surpasses that level, though. In that case, you may be required to pay a Part D Income Related Monthly Adjustment Amount (Part D-IRMAA). If you are required to pay a Part D-IRMAA, you’ll make that payment directly to Medicare while paying your monthly premium to your Part D plan.

Don’t forget about IRMAA –if you fail to pay it, you can lose your Part D coverage and might not get it back. To simplify things, you can have your Part D premium automatically subtracted from your Social Security check. Still, you’ll have to contact your plan, not the Social Security office, to establish the payments.

Medigap and Medicare Advantage Payments

If you enroll in a Medigap plan, you’ll pay your Medigap premium to your Medigap insurer –not to Medicare. Similarly, if you choose Medicare Advantage, you’ll pay any related premium to the plan’s private insurer. It is likely to have those premiums automatically deducted from your benefits check. Still, you’ll have to contact the Social Security office to establish that.

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