Medigap policies that supplement Medicare’s basic coverage can cost vastly different amounts, depending on the company selling the policy, according to a new study. The findings highlight the importance of shopping around before purchasing a policy. 

When you first become eligible for Medicare, you may purchase a Medigap policy from a private insurer to supplement Medicare's coverage and plug some or virtually all of Medicare’s coverage gaps. You can currently choose one of eight Medigap plans that are identified by letters A, B, D, G, K, L, M, and N (If you were eligible for Medicare before January 1, 2020, but not enrolled, you may also be able to purchase Plans C and F, but those plans  are no longer available to people who are newly eligible for Medicare). Each plan package offers a different menu of benefits, allowing purchasers to choose the combination that is right for them. 

While federal law requires that insurers must offer the same benefits for each lettered plan–each plan G offered by one insurer must cover the same benefits as plan G offered by another insurer–insurers set their own prices for each plan. This means that the price of each plan varies considerably depending on the insurance company. 

The American Association for Medicare Supplement Insurance compared costs of plans in the top 10 metro areas and found huge cost differences. Using the most popular plan–Plan G–for comparison, the association found that in Dallas the lowest price for a 65-year-old woman to purchase a plan was $99 a month while the highest price was $381 a month. This is a yearly difference of more than $3,000 for the exact same plan. 

The association also found that no one company consistently offered the lowest or highest price. In their study, investigators discovered that 13 different companies had either the lowest or highest price. This means you can’t rely on just one company to always have the better price. 

When looking for a Medigap policy, make sure to get quotes from several insurance companies. In addition, if you are going through a broker, check with two or more brokers because one broker might not represent every insurer. It can be hard work to shop around, but the price savings can be worth it.

Federal law requires the state to attempt to recover the long-term care benefits from a Medicaid recipient's estate after the recipient's death. If steps aren't taken to protect the Medicaid recipient's house, it may need to be sold to settle the claim. 

For Medicaid recipients age 55 or older, states must seek recovery of payments from the individual's estate for nursing facility services, home and community-based services, and related hospital and prescription drug services. States also have the option of recovering all Medicaid benefits from individuals over age 55, including costs for any medical care, not just long-term care benefits.

There are a few exceptions. The state cannot recover from the estate of a Medicaid recipient who has a surviving spouse until after the spouse passes away. After the spouse dies, the state may file a claim against the spouse's estate to recover money spent for the Medicaid recipient's care. The state also cannot recover from the estate if the Medicaid recipient had a child who is under age 21 or a child who is blind or disabled.

While states must attempt to recover funds from the Medicaid recipient's probate estate, meaning property that is held in the beneficiary's name only, they have the option of seeking recovery against property in which the recipient had an interest but which passes outside of probate (this is called “expanded” estate recovery). This includes jointly held assets, assets in a living trust, or life estates. Given the rules for Medicaid eligibility, the only probate property of substantial value that a Medicaid recipient is likely to own at death is his or her home. However, states that have not opted to broaden their estate recovery to include non-probate assets may not make a claim against the Medicaid recipient's home if it is not in his or her probate estate.

In addition to the right to recover from the estate of the Medicaid beneficiary, state Medicaid agencies may place a lien on real estate owned by a Medicaid beneficiary during his or her life unless certain dependent relatives are living in the property. The state cannot impose a lien if a spouse, a disabled or blind child, a child under age 21, or a sibling with an equity interest in the house is living there.

Once a lien is placed on the property, if the property is sold while the Medicaid beneficiary is living, not only will the beneficiary cease to be eligible for Medicaid due to the cash from the sale, but the beneficiary would have to satisfy the lien by paying back the state for its coverage of care to date. In some states, the lien may be removed upon the beneficiary's death. In other states, the state can collect on the lien after the Medicaid recipient dies. Check with your attorney to see how your local agency handles this.

There are some circumstances under which the value of a house can be protected from Medicaid recovery. The state cannot recover if the Medicaid recipient and his or her spouse owned the home as tenants by the entireties or if the house is in the spouse's name and the Medicaid recipient relinquished his or her interest. If the house is in an irrevocable trust, the state cannot recover from it.

In addition, some children or relatives may be able to protect a nursing home resident's house if they qualify for an undue hardship waiver. For example, if a Medicaid recipient's daughter took care of him before he entered the nursing home and she has no other permanent residence, she may be able to avoid a claim against his house after he dies. Consult with your attorney to find out if the undue hardship waiver may be applicable.

Medicare's Open Enrollment Period, during which you can freely enroll in or switch plans, runs from October 15 to December 7. Don't let this period slip by without shopping around to see whether your current choices are the best ones for you.  

During this period you may enroll in a Medicare Part D (prescription drug) plan or, if you currently have a plan, you may change plans. In addition, during the seven-week period you can return to traditional Medicare (Parts A and B) from a Medicare Advantage (Part C, managed care) plan, enroll in a Medicare Advantage plan, or change Advantage plans. Beneficiaries can go to www.medicare.gov or call 1-800-MEDICARE (1-800-633-4227) to make changes in their Medicare prescription drug and health plan coverage.

According to the New York Times, few Medicare beneficiaries take advantage of open enrollment, but of those that do, nearly half cut their premiums by at least 5 percent. Even beneficiaries who have been satisfied with their plans in 2019 should review their choices for 2020, as both premiums and plan coverage can fluctuate from year to year. Are the doctors you use still part of your Medicare Advantage plan’s provider network? Have any of the prescriptions you take been dropped from your prescription plan’s list of covered drugs (the “formulary”)? Could you save money with the same coverage by switching to a different plan?

For answers to questions like these, carefully look over the plan's “Annual Notice of Change” letter to you. Prescription drug plans can change their premiums, deductibles, the list of drugs they cover, and their plan rules for covered drugs, exceptions, and appeals. Medicare Advantage plans can change their benefit packages, as well as their provider networks.  

Remember that fraud perpetrators will inevitably use the Open Enrollment Period to try to gain access to individuals' personal financial information. Medicare beneficiaries should never give their personal information out to anyone making unsolicited phone calls selling Medicare-related products or services or showing up on their doorstep uninvited. If you think you've been a victim of fraud or identity theft, contact Medicare. 

Here are more resources for navigating the Open Enrollment Period:

• Medicare Plan Finder, which helps you find a plan to match your needs: www.medicare.gov/find-a-plan
• Medicare coverage options: https://www.medicare.gov/medicarecoverageoptions/
• The 2020 Medicare & You handbook, which all Medicare beneficiaries should have received. The handbook can also be downloaded online at:  medicare.gov/forms-help-resources/medicare-you-handbook/download-medicare-you-in-different-formats
• The Medicare Rights Center: www.medicareinteractive.org
• Your State Health Insurance Assistance Program, which offers independent counseling: https://www.shiptacenter.org

Asset protection planning is about protecting your assets from creditors — and it is not just for the super-wealthy.

Anyone can get sued. Lawsuits can stem from car crashes, credit card debt, bank foreclosures, or unhappy customers, among many other things. If someone wins a monetary judgment against you, your family could become bankrupt trying to pay it off. To keep your assets away from creditors, you need to move them somewhere where creditors can't reach them. Asset protection techniques include maximizing contributions to IRAs, moving funds to an irrevocable trust, retitling various assets, or using limited liability companies or family limited partnerships.

To develop an asset protection plan, you need to talk to your attorney. Your attorney can discuss your short- and long-term financial goals and help you create a plan that will work for you.

It is important to note that asset protection planning only works if you act before you are sued. Under the law, you may not defraud current creditors. If you are already being sued or if you know you are going to be sued and you transfer assets so that creditors can't reach them, the court will reverse the transfer. That is why it is a good idea to put a plan into place now — before it is too late.

Everyone has heard the terms “will” and “trust,” but not everyone knows the differences between the two. Both are useful estate planning devices that serve different purposes, and both can work together to create a complete estate plan.

One main difference between a will and a trust is that a will goes into effect only after you die, while a trust takes effect as soon as you create it. A will is a document that directs who will receive your property at your death and it appoints a legal representative to carry out your wishes. By contrast, a trust can be used to begin distributing property before death, at death, or afterwards. A trust is a legal arrangement through which one person (or an institution, such as a bank or law firm), called a “trustee,” holds legal title to property for another person, called a “beneficiary.” A trust usually has two types of beneficiaries — one set that receives income from the trust during their lives and another set that receives whatever is left over after the first set of beneficiaries dies.

A will covers any property that is only in your name when you die. It does not cover property held in joint tenancy or in a trust. A trust, on the other hand, covers only property that has been transferred to the trust. In order for property to be included in a trust, it must be put in the name of the trust.

Another difference between a will and a trust is that a will passes through probate. That means a court oversees the administration of the will and ensures the will is valid and the property gets distributed the way the deceased wanted. A trust passes outside of probate, so a court does not need to oversee the process, which can save time and money. Unlike a will, which becomes part of the public record, a trust can remain private.

Wills and trusts each have their advantages and disadvantages. For example, a will allows you to name a guardian for children and to specify funeral arrangements, while a trust does not. On the other hand, a trust can be used to plan for disability or to provide savings on taxes. Your attorney can tell you how best to use a will and a trust in your estate plan.