Health and Education Updates

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It’s Veterans Day, and before I touch on the financial topics, I must send my thanks to all those who have risked their lives to protect our world – not just my fellow armed forces veterans, but police and firefighters as well. And to my father (and all you Army veterans out there), you have my deepest sympathy regarding the crushing defeat of the Black Knights by the Falcons last Saturday – Go Air Force! Beat Army.

Medicare Part B Premium Changes  Medicare Part B premiums may rise 52% in 2016 for some Social Security Recipients. Are you part of the 30% of Social Security Recipients who will be hit with the 52% increase in Part B costs? If you pay standard Part B premiums and have them deducted from your Social Security check, then you do NOT need to worry about this increase. Those who do face the increase include:

  • People who pay higher-income Part B premiums
  • People enrolled in Part B but pay premiums directly to Medicare (perhaps because they’ve delayed Social Security benefits)
  • People who pay permanent penalties because they signed up late for Part B
  • Those who are not yet enrolled in Part B, but will sign up in 2016

There are several great articles on the ironically titled “Medicare Hold-Harmless Provision.” Just google ‘Medicare 2016 premium increase’ and read the stories from Kiplingers, AARP, or other news sources.

Education Planning – FAFSA UPDATE  The FAFSA (Free Application for Federal Student Aid) filing timeline is changing next year. Students will be able to file a 2017–18 FAFSA as early as Oct. 1, 2016, rather than beginning on Jan. 1, 2017. The earlier submission date is a permanent change which will allow students to complete and submit a FAFSA as early as October 1 every year. (There is NO CHANGE to the 2016–17 schedule, when the FAFSA will become available January 1 as in previous years.)

In addition to the earlier FAFSA timeline, parents will now use earlier income information on the FAFSA. This is an important change for financial planning purposes – not only because your financials become important a year earlier – as soon as your child is a sophomore in high school, but also because colleges won’t be looking at your financials for that child once they are a junior in college. ATTENTION GRANDPARENTS: Please forward this information to your child if you have a grandchild in 9th, 10th, or 11th grade.

STUDENT LOAN UPDATE: The federal government has created a new income-driven repayment program called REPAYE, which stands for Revised Pay As You Earn. The REPAYE Plan enables Direct Loan borrowers to cap their monthly student loan payment amount at 10% of monthly discretionary income, without regard to when the borrower first obtained the loans. The REPAYE Plan improves upon the current Pay As You Earn Plan while extending its protections to all student borrowers with Direct Loans. In addition to the monthly payment cap, REPAYE will forgive remaining debt after 20 years for those who borrowed only for undergraduate study and 25 years for those who borrowed for graduate study. The REPAYE Plan also will provide a new interest subsidy benefit to prevent ballooning loan balances for those whose income-driven payments cannot keep up with accruing interest.

Health Insurance Open-Enrollment Season is Here  Individuals and families may apply for new health insurance or switch to a different health-care plan through a Health Insurance Marketplace between November 1, 2015 and January 31, 2016.

You can use Health Insurance Marketplaces to compare health plans for benefits and price, and select a plan to fit your needs. If enrolled by December 15, 2015, coverage starts January 1, 2016. Coverage starts February 1, 2016, for those enrolling in or changing plans between January 2, 2016, and January 15, 2016. Enrollments or changes between January 16 and January 31 take effect March 1, 2016. Go to https://www.healthcare.gov/ for details. Check out http://health-plan-compare.com/ for a health plan comparison calculator.