5 Rules to Follow if You Want Good Credit

There are the financial gurus or advisers on TV, radio, and in print that advise their followers to cut up all their credit cards and go on a cash only basis. 

These advisers often already have a great cash flow either from their book sales, their speaking engagements, their media gigs, their investments, or any combination of the above. Ironically, often they used credit to get to the point where they are and now they are advising all of us to stop using credit.

However, for most of us, carrying a few credit cards is the norm. Nevertheless, if you want to keep your already good credit or want to improve your credit even more, there are some things you should not do: 

1. Don't miss a payment and end up paying 30 days late. This results in an immediate negative impact on your credit score.

2. Don't resume paying a delinquent account if it is over two years old unless you are applying for a mortgage loan and the lender requires it to be paid off. Delinquent account over two years old have minimum impact on your credit score and if you start paying it again, the algorithms at the credit bureaus will treat it as if it was a recent entry. Please avoid doing this. Do not feel guilty that you didn't pay this obligation, it has been charged of as a bad debt by the creditor.

3. Don't accumulate more than five revolving credit cards (for example, Master Cards, VISA cards, and Discover cards) and always ignore the instant credit offers from retail stores giving you 10% off. They almost always have a higher interest rate and besides these stores accept Master and VISA cards anyway. They just want to make extra money off of you.

4. Don't allow your credit to exceed 30% of your credit limit. For example, you have a credit limit of $1000 your balance should not be more than $300. The larger the spread between your balance and your credit limit the better. If you can afford to pay off your balance each month prior to the due date on your statement, that would be even better.

5. And finally, don't close your credit cards that have these low balances and transfer these balances to new credit cards offering lower interest rates. That will result in you having fewer credit cards with higher balances thus impacting your credit score negatively. Instead, negotiate with your current creditors for a lower interest rate. You already have a good record with them and chances are they will not want to lose your business. 

Make these don'ts a habit and you will continue to maintain your good credit, and even see it improve.

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Medicare Most Frequently Asked Questions - Part 1

Understanding the Medicare system can be confusing. Here are answers to Frequently Asked Questions on Medicare. 

1. What is Medicare?

Medicare is the Federal health insurance program established in 1965 which is administered by the Centers for Medicare and Medicaid Services (CMS) of the U.S. Department of Health Services. Medicare is health insurance for the following people:

  • Age 65 or older;

  • Under age 65 with certain disabilities who qualify for disability benefits from Social      Security or Railroad Retirement Board (RRB);

  • Any age with End-Stage Renal Disease (ESRD) (permanent kidney failure requiring dialysis or a kidney transplant);

  • Diagnosed with ALS (Amyotrophic Lateral Sclerosis), also called Lou Gehrig's disease) the month your disability benefits begin.

2. How do I enroll in Medicare Part A (Hospital) and Part B (Medical)?

  • If you aren't getting Social Security or Railroad Retirement (RRB) benefits, you will need to sign up in one of three ways: 1) online at www.socialsecurity.gov; 2) call Social Security at 1-800-772-1213, or; 3) visit your local Social Security office.

  • In most cases, if you're already getting benefits from Social Security or the Railroad Retirement Board (RRB), you will automatically get Part A and Part B starting the first day of the month you turn 65. If your birthday is on the first day of the month, Part A and Part B will start the first day of the prior month.

  • If you're under 65 and disabled, you automatically get Part A and Part B after you get Social Security disability benefits (SSDI) or certain disability benefits from the RRB for 24 months.

  

3. What does Medicare Part A (hospital) cover?

  • Inpatient care in hospitals;

  • Inpatient care in a skilled nursing facility (not custodial or long-term care);

  • Home health care services;

  • Hospice care services;

  • Blood.

4. What does Medicare Part B (medical) cover?

  • Doctor's services and tests

  • Outpatient care

  • Home health care services

  • Durable medical equipment and other medical services  

  • Ambulance services

  • Chiropractic services

  • Diabetes supplies

  • Preventive services

5. What is NOT covered by Medicare Part A and Part B?

Medicare doesn't cover everything. If you need certain services that Medicare doesn't cover, you will have to pay for them yourself unless you have other insurance to cover the costs. Even if Medicare covers a service or item, you generally have to pay deductibles, coinsurance, and copayments. Some of the items and services that Medicare does not cover include the following:

  • Long-term care;

  • Routine dental care;

  • Dentures;

  • Cosmetic surgery;

  • Acupuncture;

  • Hearing aids;

  • Exams for fitting hearing aids.

6. What are Medicare Advantage (MA) plans (Part C plans)?

Medicare Advantage plans are offered by private insurance companies that contract with Medicare to provide Part A and Part B benefits to people with Medicare who enroll in the plan.  

7. What is Medicare Part D (Prescription Drug Plan)?

Medicare offers prescription drug coverage to everyone with Medicare. Even if you don't take a lot of prescriptions now, you should still consider joining a Medicare Prescription Drug Plan (PDP). To get Medicare prescription drug coverage, you must join a plan run by an insurance company or other private company approved by Medicare. Each plan can vary in cost and drugs covered. Take time and read the Formulary for each company.. If you decide not to join a Medicare drug plan when you're first eligible, and you don't have other creditable prescription drug coverage, you will likely pay a late enrollment penalty.

8. How can I get help paying for my prescription drugs?

Frequently Asked Questions by Medicare Beneficiaries I Senior Advocacy Services

You may qualify for "Extra Help", also called the low-income subsidy (LIS), from Medicare to help pay prescription drug costs if your yearly income and resources are below the following limits: Single Person: Monthly income less than $1,471 and resources less than $13,640; Married Person Living with a Spouse and no other Dependents: Monthly income less than $1,991 and resources below $27,250.

9. What other Low-Income programs are available?

You may qualify for the Medicaid program or any of the Medicare Savings Programs (MSP) if you meet certain monthly income and asset levels. 

10. What are Medicare Supplement plans (Medigap plans)?

A Medigap policy, sold by private insurance companies, can help pay some of the health care costs ("gaps") that Original Medicare doesn't cover, like copayments, coinsurance, and deductibles. Some Medigap policies also offer coverage for services that Original Medicare doesn't cover, like medical care when you travel outside the U.S.

If you have Medicare Parts A and B and you buy a Medigap policy, Medicare will pay its share of the Medicare-approved amount for covered health care costs. Then your Medigap policy pays its share. Medicare doesn't pay any of the premiums for a Medigap policy. 

11. What if I am still covered by my Employer Group Health Plan when I become eligible for Medicare (either while I am still working or now that I have retired)?

Do you have, or are you eligible for other types of health insurance or prescription drug coverage (like from a former or current employer or union)? If so, read the materials from your insurer or plan, or call them to find out how the coverage works with Medicare. If you have coverage through a former or current employer or union or other source, talk to your benefits administrator, insurer, or plan before making any changes to your coverage. If you drop your coverage, you may not be able to get it back.

In Part 2, I will answer additional questions. So be sure to send yours if you have particular ones. Be sure to watch for my next blog on how to qualify for Medicare Advantage Plans all year around.  Call (773) 614-3201 or e-mail me at bwillbar@gmail.com with your urgent questions.

Know These Three Health Care Terms Before Obtaining Obamacare

Until Obamacare is repealed and replaced, you are stuck with it unless the new President is a Republican. 

If Hillary becomes President, Obamacare will continue and both the cost and the penalties will just get worse along with your choice of doctors and hospitals being seriously diminished. 

Nevertheless, here are the three health insurance terms you need to know before buying an Obamacare policy or just a regular health insurance policy.

Premium

The total amount paid to the insurance company for health insurance coverage. This is typically a monthly charge. Within the context of group health insurance coverage, the premium is paid in whole or in part by the employer on behalf of the employee or the employee's dependents. Unearned premium is the portion of a premium already received by the insurer under which protection has not yet been provided. The entire premium is not earned until the policy period expires, even though premiums are typically paid in advance.

Deductible

The amount of loss paid by the policyholder. A specific dollar amount that your health insurance company may require that you pay out-of-pocket each year before your health insurance plan begins to make payments for service or claims. Not all health insurance plans require a deductible. As a general rule (though there are many exceptions), HMO plans may or may not typically require a deductible, while most Indemnity and PPO plans do. In general, the bigger the deductible, the lower the premium charged for the same coverage.

Coinsurance

The amount that you are obliged to pay for covered medical services after you've satisfied any co-payment or deductible required by your health insurance plan. Coinsurance is typically expressed as a percentage of the charge or allowable charge for a service rendered by a healthcare provider. For example, if your insurance company covers 80% of the allowable charge for a specific service, you may be required to cover the remaining 20% as coinsurance. After paying 80 percent of losses up to a specified ceiling, the insurer starts paying 100 percent of losses.


Call (773) 641-3201 for answers to your health care questions or to get a quote. 

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