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Two Blokes Jul 7 -
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Given the amount of news flow we’re dealing with right now around Medicare, Medicaid, and all other proponents of Trump’s so-called “Big Beautiful Bill,” investors of all ages have plenty to consider when it comes to retirement planning. How Medicare evolves over time is anyone’s guess. Administrations change, and policies around how Medicare and other government healthcare programs evolve will likely continue to change with future administrations. Key Points Trump’s so-called “Big Beautiful Bill” has ushered in some big changes for soon-to-be retirees. Here are a few of the biggest changes those nearing retirement should be watching closely. Are you ahead, or behind on retirement? SmartAsset’s free tool can match you with a financial advisor in minutes to help you answer that today. Each advisor has been carefully vetted, and must act in your best interests. Don’t waste another minute; get started by clicking here here.(Sponsor) But for anyone over 60 looking to plan for retirement, Medicare is certainly one of the most important pieces of the social safety net to assess. Here are three of the most pertinent changes upcoming I think soon-to-be retirees should be watching closely given the recent news. Expanded Health Savings Account Access An HSA form on a table with a stethoscope and money One of the most powerful savings tools available to investors of all ages is the Health Savings Account (HSA). This account is triple-tax-advantaged, meaning those who contribute to such plans can get a tax break on the amount put into such plans (capped at $4,300 per year for individuals, with higher limits for those filing jointly and those nearing retirement), pay no taxes on the gains in one’s account over one’s lifetime, and all proceeds can be pulled tax-free for qualified medical expenses, or rolled into an IRA at the end of the day. However, under previous law, it wasn’t possible for those enrolled in Medicare Part A to contribute to HSAs, even if those individuals were covered by a high-deductible plan (a requirement of being able to invest in an HSA). The new bill allows those who are still working and eligible for Part A to enroll in a high deductible health savings plan, and contribute to their future healthcare needs (and retirement, if those funds aren’t used). Additionally, higher contribution limits for those earning less than $75,000 per year have been pushed through. Individuals earning less than the $75,000 threshold are now able to contribute an extra $4,300 per year to their individual HSA or an extra $8,550 for their family. These amounts will be indexed for inflation over time. Enhanced Eligibility Requirements A senior thinking Now, it’s not all sunshine and rainbows on this front. In life, things rarely are. In addition to the improved HSA access and contribution limits, this bill also introduces stricter eligibility and verification requirements for Medicare overall. In order for seniors to claim Medicare, they may be required to verify their income and residency more often. Heightened penalties for non-compliance are being put in place, with the goal of such verification processes seemingly aimed at verifying the government is paying for services only for the portion of the population that is truly eligible. One of Trump’s campaign promises has been to cease paying for government services paid out to undocumented immigrants, and those who fall into this category will be excluded from Medicare coverage. So no surprise there. But it will be interesting to see just how much fraud and improper payments will be identified as a result of this shift, with critics of the bill suggesting that increased documentation and verification requirements could mean that some who are eligible for Medicare may not receive their benefits. Rural Hospitals Feeling the Love In a bid to conjure up votes from a number of lawmakers who sat on the sidelines until the 11th hour, Trump agreed to some provisions in this bill around expanding the definition of what qualifies as a “Rural Emergency Hospital (REH),” a key sticking point for some lawmakers in states that may not have the most well-funded hospital systems due to where they’re located. The key change is pushing more funding to underserved markets in areas that are rural (or semi-rural), with the goal of keeping the doors open at such locations. Given the reality that government spending on key Medicare and Medicaid programs is expected to decline as a result of this bill, the goal of this provision is to prevent a continued decline of rural hospital infrastructure in key markets. How will the government pay for this provision? Critics suggest that rollback of Medicare Advantage expansions could possibly lead to higher premiums or reduced coverage for some enrollees, so we’ll have to see how everything ultimately shapes up. The post 3 Facts About Medicare That Every American Over 60 Needs to Know appeared first on 24/7 Wall St..
