 |  |
 |  |
Do you have a loved one that is currently on Medicare? Or do you work in the senior care industry helping seniors set up their MA plans?
If so, then you know how confusing it can be to navigate the maze of Medicare Advantage. There are just too many options and not enough information out there to help seniors make an informed decision; Seniors are more likely to feel like they are victims instead of empowered. There are so many different plans, carriers, and deductibles. Picking the wrong one will cause you financial ruin! With so much to consider it can be hard to know where to start.
Senior often find themselves in this situation. They are given a long booklet about insurance, but they are not told which one to buy. The booklet is 150+ pages long, so it is hard for them to understand it. Then they have to compare all the different plans which include prescription drug coverage, vision or dental care, gym memberships, or even travel discounts. The key is finding one that provides what you need at an affordable price without sacrificing the quality of service.
Join me in a conversation with Danielle Roberts. We will talk about navigating the maze of Medicare Advantage.
——————–
Bio:
Danielle Roberts is a Medicare expert and has been providing education to the public in 48 states for over 10 years. She’s helped tens of thousands of people learn more about their coverage, what it covers, and how to save money on healthcare costs. Danielle is also the co-founder of Boomer Benefits, an award-winning agency that helps baby boomers navigate Medicare nationwide.
Follow Danielle on:
Linkedin: https://www.linkedin.com/in/daniellekunkle/
Facebook: http://www.facebook.com/BoomerBenefits
Twitter: https://twitter.com/BoomerBenefits
Transcript:
Hanh:
Hi, I’m Hanh Brown. And thank you for tuning in this conversation is live streaming on the various social media platforms. Do you have a loved one that is currently on Medicare, or do you work in the senior care industry, helping seniors set up their Medicare advantage plans? Well, if so then, you know how confusing it can be to navigate the maze of Medicare advantage. Well, there are too many options and not enough information out there to help seniors make an informed decision. Seniors are more likely to feel like they are victims instead of empowered. There are so many different plans, carriers and deductibles picking the wrong one can cause you financial ruin, especially if you are on a fixed income. So with so much to consider, it can be hard to know where to start. Seniors often find themselves in this situation, they are given a long booklet about the insurance, but they’re not told which one to buy. So the booklet is about 150 pages long, so it’s hard for them to understand it. And then they have to compare all the different plans, which include prescription drug vision and dental care and gym membership or even travel discounts. So the key is finding one that provides what you need at an affordable price without sacrificing quality of service. So join me today in conversation is Danielle Roberts. We will talk about navigating the maze of Medicare advantage. Danielle Roberts is a Medicare expert and has been providing education to the public in 48 states for over 10 years. She’s helped tens of thousands of people learn more about their coverage, what it covers and how to save money and healthcare costs. Danielle is also the co-founder of boomer benefits and award-winning agency that helps baby boomers navigate Medicare nationwide. So Danielle, welcome to the show.
Danielle:
Hello. My pleasure. Thank you for having me.
Hanh:
Great. You know, from what I gathered, there are four parts of Medicare, A B, C, and D. Now, A provides inpatient hospital coverage and B provides outpatient Medicare coverage while C offers an alternate way to receive your Medicare benefits. And I think D provides prescription drug covered. So can you bring us up to date or on the same page, the distinctions of ABC and D?
Danielle:
Yes, of course. So Medicare came out in the sixties back when we had most of the insurance was an old blue cross and blue shield style, which we had the hospital side and the medical side. And that is how Medicare was set up after those original plans and original Medicare itself parts A and B. That’s the foundation of your coverage. And like you said, it covers inpatient hospital. It also covers outpatient medical. Those two pieces together are called original Medicare or traditional Medicare. And they’re the only two parts that you will sign up for through social security or the railroad retirement board. If you retired from there, parts C and D came later and they are optional. So part C is the Medicare advantage program. This is a way that you can get your benefits. You can get your A and B benefits and healthcare services through a private insurance company that operates a local network of providers. So you have an alternate way to get your Medicare and D is the voluntary prescription drug program. And it’s a really important part of Medicare because for over 40 years, we had no outpatient drug coverage on Medicare. This was rolled out in 2006. And it allows you to enroll in a plan that will help to pay for your prescription medications and make them much more affordable for you. It is optional. However, if you don’t have another form of drug coverage, we don’t recommend that you skip it because we never know when we’ll get sick. And it’s important to have drug coverage as well as hospital and out patient.
Hanh:
Thank you for that. So now will a senior be automatically enrolled in. Medicare part B at 65 years old?
Danielle:
Good question. So you can take social security as early as 62. And if you enroll in social security income benefits before you become eligible for Medicare at 65. Then they will notice that. And they’ll say, you know, I bet that that person is no longer working. That’s why they’re taking social security. So they probably don’t have employer health coverage either. We will automatically enroll them in Medicare. So if you take your social security prior to 65, you will be automatically enrolled in parts A and B and your Medicare card will just show up in your mailbox a couple of months before you turn 65. But if you delay those social security benefits, which a lot of people do these days to earn the delayed retirement credits, make your check bigger. Then at 65, you need to enroll yourself into Medicare during your seven month initial enrollment period. So it depends on when you take your social security.
Hanh:
Okay. Now, is there a monthly fee? And if yes, like how much seniors have to pay for medicare?
Danielle:
Yeah. So if you have worked 10 years in your lifetime, or you’re married to someone who did, and during that work, you had FICA taxes. Pulled out of your check for Medicare, then you will not pay anything for part A, but part B does have a standard monthly premium in 2021 part. B is $148 and 50 cents a month for most enrollees, about 95% of people. Pay that roughly $150, but about 5% of people who have higher incomes will pay more for Medicare part B. And this is something that affects, like I said, about 5% of individuals. So if they filed their taxes and they earned more than 88,000 as an individual filer or 176,000 as a joint filer, then they will want to head over to the Medicare website. Look up the chart there and estimate what they will pay for part B people in the highest income bracket pay over $500 a month for part B. So it’s really important to look at that before you retire, before you leave your working income so that you can accurately estimate what you’re going to spend for your Medicare benefits. Once you enroll.
Hanh:
Hmm. So now, when is it advantageous to sign up for medicare?
Danielle:
If you are going to have Medicare as your primary insurance, and you’re as opposed to, if you’re still working at 65 for a large company, you might decide to stay with that employer coverage. And then you could delay enrollment into certain parts of Medicare so that you don’t pay for those benefits twice. But if you don’t have other creditable coverage like that. Then you have a seven month initial enrollment period for Medicare. It starts three months before your 65th birthday. It goes through that birthday month and runs for three months after. And that’s when you want to enroll in Medicare. And that is your primary coverage. That will be effective. Soon after you enroll. And it’s really important to understand that if you miss that window, And you don’t have other creditable coverage. You may incur a late enrollment penalty later on. So if it’s going to be your primary coverage, make sure that you enroll in that seven month window so that you don’t end up down the road paying a penalty that you didn’t expect.
Hanh:
Maybe this what you said could answer this next question. So when should people start preparing for when they will be eligible for Medicare in order to get the most out of their coverage and avoid paying more than necessary and premiums and deductables?
Danielle:
Yeah, it’s a great question because so many people. Put off learning about Medicare, because how fun is it to go and study about a national health insurance program? It’s not something fun. So when we have someone come to us at boomer benefits and it’s the day before they turned 65 and they’ve never looked at anything, there’s a huge amount of information that they need to absorb very quickly. So what we recommend is that you should start your research process no later, than 64 and a half. So six months prior to when you need to enroll so that you can learn about some of the things, which I’m sure we’ll discuss today, like your original Medicare, how that works. If you had a Medicare supplement, how it works differently, if you have a. Medicare advantage plan, whether or not enrolling in part D makes sense for you. We find that if people start that research early and they look at some of the resources online, you can go to medicare. Gov and you can read there, you can read the Medicare and you handbook. You can go to YouTube and our boomer benefits channel has a lot of great information. There’s many other channels, also educating people about Medicare, start watching some of that familiarize yourself with the terminology so that when it gets close to the time that you’re ready to sign up for your coverage, you have sort of a working idea of which route you want to go. And then you’ve worked with a broker or an insurance company to pick the plan that’s ultimately going to be best for you.
Hanh:
Great. Great. Now it’s true that Medicare only covers 80% of the healthcare costs after they meet the deductible limit?
Danielle:
Yeah, that’s right. And I think people find this confusing because the first thing they’re confused about is they’re surprised that it’s not free because they know they paid those FICA taxes and they don’t realize that that only pays for part. A that they have to pay for part B. Right. And then of course, once they enroll in Medicare and they have the co-insurance Medicare only pays 80% of your outpatient expenses. So both part A and B have deductibles that you pay up front and then. Medicare kicks in and on the part B side, 80% may sound like a lot, but if you have something under part B like chemotherapy or dialysis or an MRI or a CT scan, and you have to pay 20% of the cost of that, it’s quite expensive. So probably the biggest gap in Medicare that we need to fixed with either a Medicare supplement or Medicare advantage plan, is that 20% and something about that 20%, that’s different than what people are used to is. You and I, when we’re under 65 and we have employer health coverage, or an individual plan through the health care exchange, we have a deductible. Then we pay a co-insurance and then there’s an out-of-pocket maximum limit where if you reach a certain dollar level of spending, you’re done for the rest of the year, well, Medicare doesn’t have that. You pay that 20% forever. With no cap, which leads of course, to medical bankruptcy when people have serious illness. And that’s of course, why insurance companies came up with Medicare supplements and Medicare advantage plans in the first place to give people some affordable options to take care of those deductibles, to pay that co-insurance for you to eliminate or lower your co-pays. And so that’s all of the things that you’re deciding when you’re getting ready to go in and how you’re going to get those benefits. And it’s a lot to learn. So again, that’s why it’s so important to start early.
Hanh:
Now, if someone has just left a job and they know their coverage will be ending soon, what can the person do ahead of time, so if not to interrupt their care right away once coverage in?
Danielle:
Yeah. So you can actually start looking at all of your options before you leave your job. So let’s say that you worked until age 67 and now it’s October and you’re getting ready to retire at the end of the year. Well, you don’t have to wait until January to set up your coverage. You can contact an agent now and start preparing for everything that you need to do. If you have large employer coverage, you may have only enrolled in part A when you turn 65. And so there’s paperwork that you need to do with the social security office to sign up for part B. Your employer needs to fill out a form showing verification that you had that creditable coverage since you turned 65, so that you can prove to social security that you don’t owe a late penalty. These are all things that take time and super important to get done early.
Hanh:
Now, would it be better if they go straight from employer sponsored insurance, Medicare, or directly go on the marketplace instead, since they’ll be paying for it all themselves towards I guess towards the end anyways?
Danielle:
Yeah. So if you’re under 65 and then, and you won’t have insurance, you won’t have Medicare for a while yet. Then of course, you want to go to the health care exchange, healthcare. Gov and sign up for a marketplace plan. But once you’re 65, you definitely need to leave the marketplace and transition to Medicare. The reason is. Marketplace plans are not creditable coverage for Medicare. So if you stayed on a marketplace plan, not only would it be expensive, but later when you left it, you would end up owing a penalty added to your part B premium, and that you pay that penalty every month for the rest of your life. So you don’t want to be in that situation. The other thing is that if you are someone who’s going to get premium free part A on Medicare, when you turn 65 and you didn’t know that. This rule, then you could stay on an ACA plan and you could be collecting a subsidy from the federal government. That’s reducing the cost of that. And that is not yours anymore. Once you turn 65. So once the health care exchange catches up to the fact. That you’re still taking a subsidy after 65, when you should have gone to. Medicare, they can back bill you for all of that subsidy that you collected. It could be hundreds or even thousands of dollars, and you never want to be in that situation. So, when you turn 65, the only reason. That somebody might stay on a marketplace exchange plan would be if they’re not eligible for Medicare yet, or they’re not eligible for premium free Medicare because they haven’t been in the United States long enough, or don’t have enough work history to qualify for that free part A.
Hanh:
I see, I see so much to navigate. I’m trying to process what you were saying. It is confusing. And like I said earlier, boy is someone that’s 64, 65, and beyond, it’s so easy to feel like they’re kind of a victim of all these complexities in. And often, although they’re supposed to get help, whether it’s online or by a family member, I mean, how much is a family member understands and how readily are the information online? Easy to understand, know, so I feel for the folks that are going through this process and thankful for there are professionals like yourself to help navigate this. And help them navigate through this journey to now, what are the differences between traditional Medicare and the Medicare advantage plan?
Danielle:
Yeah. So original Medicare means that you’re getting your part A and. B health care services paid for by the federal government. And these are the benefits that you’ve worked your whole life to qualify for the advantages of staying with original Medicare and adding a Medicare supplement are that you have freedom of access. You can see any of the 1 million providers that accept Medicare across United States. 93% of providers do accept Medicare. You can use your coverage in Texas, in New York, in Washington. So if you are going to travel in retirement, like so many people do that original Medicare coverage is really. Helpful in terms of, if you get sick, no matter where you are, that coverage is going to work for you. And you can enroll in a Medicare supplement to pick up that 20% to pay your deductibles. And it won’t matter if that Medicare supplement is from blue cross or Aetna or. Humana or one of a dozen other carriers, it doesn’t matter because the network is Medicare itself and you will be able to see those providers anywhere you go. That coverage is also. Original Medicare plus a Medigap plan is very comprehensive. So it doesn’t leave a lot for you to spend on the backend. But if you’re going to do original Medicare and purchase a Medicare supplement, the premiums for a Medicare supplement are higher and you have less spending on the backend. If you go the other route, which is the Medicare advantage program, you have lower premiums upfront, but more spending as you go. The Medicare advantage program is you opting to get those A and B services through a local insurance company that operates a private network in your area. So instead of being able to see any of the 1 million providers, you might have a few thousand providers in your county, or a couple of counties near where you live and you have this network that you access. And if you do the Medicare advantage plans and you decide to operate with that network, there could be some things that would benefit you there. As long as you choose a plan that has your doctors in the network and has your drugs on the formulary. You could get a plan where you have your part D rolled in, instead of separate. Some people like having just one ID card where you can show it at the doctor, showed at the pharmacy, show it at the hospital and it’s all in one place. But the challenges of getting that coverage through, through a Medicare advantage plan are that, when you have a network, this hassles that you may have to deal with, for example, if you enroll in a Medicare advantage HMO plan, the premiums are going to be very low. Sometimes the premiums can even be zero for the plan itself. But you enrolling in a plan where you’re going to have to choose a primary care doctor. You may have to see that doctor first for a referral. When you want to see a specialist of some HMO plans, have no out of network coverage except in emergencies. And this could be a real problem. For example, down here in Texas if you were in Fort worth and you enrolled in a local Medicare advantage HMO, and then 10 years later you developed cancer. You might want to go to Houston and treated MD Anderson, which is arguably one of the best cancer hospitals in the United States, but you don’t have any coverage there. So you’re going to have to stay locally and get that coverage through local doctors. And maybe they don’t have the same programs that you could access at MD Anderson. So anytime you choose the Medicare advantage route, You want to know what some of those limitations are. There’s often more prior authorizations for bigger procedures. You have an insurance company helping to make those decisions instead of original Medicare. So there could be delays when something needs to be prior authorized. So those are all things that you need to think about. If if you like that idea, is it worth the trade-off to get that much lower premium? And then you want to look in the plan summary benefits, because with an advantage plan, you have costs as you go. It might be $10 when you visit your primary care doctor 40, when you see a specialist, it might be $200 a night when you go into the hospital up until the plans maximum out-of-pocket limit. And so because those two types of coverage work so differently, you really need to look at them very carefully to decide which one is the right fit for you, based on your needs, your budget and your health condition.
Hanh:
And everything that you described, you know what often, when we’re sitting here to read, compare, and then make those decisions, we’re not necessarily projecting 10 plus years from now is we should, you know what I mean? So it’s a needless to say it’s more than just complicated, so not what, okay. Hang on. So are there health questions, underwriting required to join this coverage?
Danielle:
Sometimes. So if you, when you join Medicare itself, there’s no health questions whatsoever. And that’s your primary coverage. So you have access to your primary coverage with no health limitations whatsoever. But if you decide to go with a more comprehensive coverage, the Medicare supplement, which is also called a Medigap plan, if you go with that coverage, you have six months from your part B effective date to join any Medicare supplement with no health questions asks. Once that window expires. Now, if you want to buy a Medicare supplement in most states, there’ll be a whole page of health questions. They want you to answer. They’re looking for you to answer no to those health questions and you’ll give them your medications. They’re going to pull your medical history. They’re going to look at your prescription history and that. Medicare supplement can decide whether to accept you, or decline you. And so it’s very important to know that if you’d like idea that peace of mind that comes with a more comprehensive coverage, it’s important to get enrolled during that window. If you have health conditions that might prevent you later from being able to pass the underwriting on the Medicare advantage side, there are no health questions. So that’s really good because it means that if you did decide to enroll in coverage, no matter what health condition you have, you could go ahead and enroll. In that coverage, but on the other side with the, I mean, seriously with the Medicare advantage plans. You have to do that during a valid election period. So this is something all totally new to people on Medicare, because they’re not used to that. So if you don’t sign up for a Medicare advantage plan, when you’re first eligible for one, let’s say maybe you did a Medigap plan first and later, you want to change. You have to wait for a valid election period, like the annual election period in the fall, which runs from October 15th to December 7th. And during that window, you can sign up. So what might happen is somebody may assume, well, I can just get that. Medicare advantage whenever I get sick. Well, if you get sick in February and the next annual election period, isn’t until October that coverage won’t start till the following January. And so you need to be careful to make sure that you want to have some coverage in place upfront. You never want to have just Medicare. You need to choose either a Medicare supplement or an advantage plan, and then you can make a change once a year. With Medicare advantage. If you want to go to a Medigap plan, then you have to do the underwriting, unless you’re still in that six month window. And these are all tricky things that as you know, all these people are trying to figure out as they come into Medicare. And as these annual election periods roll around, they see the commercials, they get mailers in their mailbox, telemarketers are calling them and sometimes they’re not sure what they’re supposed to be doing. And so a lot of ongoing learning that we have with Medicare itself to.
Hanh:
Absolutely. I’m seeing that, you know, when you and I are scheduled to talk. So I did a little bit of research. Boy, they are been borrowed it, and, and to be honest with you, I’m not sure if the best of these strategies have the seniors at best interests. I’m not sure. Cause I mean, I’m trying to absorb some of this and it’s still confusing. So now, if a person enrolls in a Medicare advantage plan, do they still have to pay for part B? And then when can seniors switch from one to the other?
Danielle:
So, yes, you do still pay for part B and people get confused by this. Because as I mentioned earlier, there are some Medicare advantage plans with the zero premium, which means. You don’t pay anything more than what you’re already paying for part. B, but people get confused by that. And they might think that when they enroll in an advanced plan, they don’t have to pay 14850 for part B anymore. That’s false. So whether you do a Medicare supplement or a Medicare advantage plan, you must be enrolled in both parts, A and B. If you were to cancel either of those, you would lose your other coverage would not be helpful to you. So you do have to keep paying for part B, unless you qualify for Medicaid. Based on low income, which can help to pay that for you. You’re going to always be paying the part B premium. And then once you are enrolled in a Medicare advantage plan, you let’s say you’re in a plan, that’s a zero premium. And then in September, they send you a notice that says next year, your premiums going to be $20 a month. Well, that may make you think, I’m going to see if there’s a different plan. That’s still has a zero premium in my area that I could switch to. So you’re given that annual election period in the fall to make a change so that if your existing plan. Change is something that you don’t like. Maybe it’s something really important. Like they’re dropping coverage for one of your expensive brand name, diabetes, medications. Then you want to take advantage of that window from October 15th to December 7th, to switch to a different Medicare advantage plan that may have a lower premium or still cover the medication that you take. So you do have that chance to make a change once a year. There are also special election period circumstances. For example, if you moved out of state to a different state, You would have an opportunity to change to a new plan in that state because you moved.
Hanh:
Okay. I know you touch on the annual election period. Okay. So I know what that, well, I hear what you just said about it, but why do you need it? Why do Medicare enrollees even need an election period?
Danielle:
Yeah, it’s an important thing. And the reason is because Medicare advantage plans have no health questions and because they changed their plans from year to year, it’s really important to have an election period. If there wasn’t an election period that you had to wait for. Everybody would just wait until they get sick to sign up and then the insurance companies would go belly up. Right. So it’s important for that reason for one, but also since the plans change every year, they can change their premiums, their copays or deductibles the pharmacy network, the doctor network it’s important for you to have an opportunity to make your own change. If you don’t like something that is changing on the Medicare advantage plan. If you’re not someone that’s going to sit down every September and read the annual notice of change to see what’s going on with your plan, then it’s better for you to do a Medicare supplement because those plans don’t change their benefits every year. So there’s no homework that you need to do on their Medicare supplement, but on the Medicare advantage plans, knowing that they’re going to change some things every year. There’s so many people out there that just don’t do anything. They like their plan. They assume the plan is going to stay the same. And then in January, they’re standing at the pharmacy counter and the pharmacist says, we’re not going to cover your $600 Lantis diabetes pen. Now you’re stuck in a plan. You’ve lost your annual election window because you didn’t look at your notice of change and you have to wait a year to change that. So if you’re not someone who will diligently sit down every September and review, what’s changing and look to see if this coverage is still the right fit for you next year, then advantage plan may not be a good fit for you.
Hanh:
Now we’ll seniors still be able to change their mind about their option at any point, during this period without being subject to penalties for changing plans after the deadline?
Danielle:
Depends on the type of coverage that you enroll in. So if you have a Medicare supplement, you can apply to change that anytime that you want in the future. And I would say most people will shop their Medicare supplement every couple of years with health insurance, there are inflation factors. So the premiums go up just like premiums go up. On auto insurance and homeowners insurance. So every year you’re going to get a bill in the mail from your Medigap plan that says, Hey, this is your new premium on your pilot policy anniversary. And sometimes it may go up only a few dollars. And so you don’t really need to do any change. But maybe after three or four years, you’ve had a couple of increases. You might call and say, Danielle, I want to make a change. Can I see if anyone else is offering the same plan G cheaper than what I’m paying now? Well, if we find one that you can move to now, you’re going to, you can change anytime you want, but you have to pass the underwriting because your six month, one time window is long gone and that’s in most states, there are a few states that have exceptions. So changing your Medigap plan may cause some underwriting. Now if you enrolled if you decided to go from a Medigap plan to. Medicare advantage, no problem. Because advantage plans don’t have health questions, but you just have to wait till the next annual election period when you can get in one and then you could drop your Medigap plan. But let’s say your in that Medicare advantage plan for several years, and then you develop a health condition and you’re starting to spend a lot of money. You have specialist copays, you have doctor copays, you have lab or copays. You have hospital copays and you think, man, I really wish I had kept that. Medigap plan and stayed with that. Now you have to wait for an annual election period to get out of the advantage plan. And then in order to get into the Medicare supplement, you’ve got to answer the health questions. So maybe the health condition that’s causing all that spending on your advantage plan would prevent you from getting into a Medicare supplement. And so it could be at that point that from there on, you’re always going to be with Medicare advantage because you can no longer qualify medically for a Medigap plan. So it’s very easy to go from Medigap to Medicare advantage. It’s more difficult to start with Medicare advantage and change to. Medigap, but you can always easily change from one Medicare advantage plan to another without any underwriting.
Hanh:
So do you have to sign up again every year? And what if a person misses their deadline?
Danielle:
You do not have to sign up for your current plan again. So you never have to re-enroll in Medicare parts A or B. And if you have a Medigap plan and you don’t initiate any change, that plan will automatically renew no matter what health conditions you get. If you have a Medicare advantage plan. And you want to keep that plan. You don’t have to do anything. It will just renew in January with the same changes that it told you about in the letter that you got in September. And you could stay in that plan and you don’t have to re-enroll from year to year, but occasionally we see plans fold. So it could be that that letter that comes in September says we’re shutting down this plan. We have this other plan that we’re moving you into and that plan costs $30 more per month. So again, if you didn’t look to see what those changes were, that could surprise you. So, we don’t see the plan. Completely fold and go away a lot with Medicare advantage, but we do see people on the standalone part D drug plans where they, the carrier had six plans one year, and now next year they only have three. And so there could be things that are changing, making the plan that you liked, that you had no longer available next year. And so that’s another thing that happens with advantage plans and part D plan.
Hanh:
So, is it mandatory for Medicare beneficiaries who choose a new supplement plan every year?
Danielle:
Nope. That’s the one good thing. If you enroll in a Medicare supplement and you like that Medicare supplement, you could keep it forever as long as you continue paying the premiums. And so that is one other thing that some people really like about Medicare supplements is just knowing that. The coverage doesn’t change from year to year, they have a premium increase, but a lot of times those are manageable and they don’t have to re-enroll. They don’t have to worry about changes.
Hanh:
Wow. This is a lot of in-depth material. And I hope that the listeners, folks who are working in senior care, helping the older adults sign up or even loved ones, helping their mom and dad or grandparents bless you. There’s so much to know.
Danielle:
I know.
Hanh:
So, okay. So we’ll get them back to Medicare advantage. Now do people who choose to enroll in part D the description drug coverage automatically sign up for and receive the guaranteed issue the GMT?
Danielle:
Yeah. They do so part D plans have no health questions. So you’re eligible to enroll in one during your initial seven month enrollment period into Medicare. So if you did go with original Medicare and you signed up for a Medicare supplement or Medigap plan, You would enter also enroll in a part D drug plan to go alongside that you could choose any part D plan offered in your county and there’s no health questions whatsoever. Now the part D plan will change from year to year, just like Medicare advantage plans do so you’ll get your annual notice in the mail in September. You open that up and take a look. Is it still going to cover your medications next year? Is your preferred pharmacy still in the network? Do you like the premium on the plan? Look at the deductible and some of those things, and if you like your plan, you could let it renew or you could make a change. And there were even if you change to another plan again, no health questions. So it’s very easy to switch your party plan during a valid election period, or keep the one that you have, and you won’t ever have to worry about health condition.
Hanh:
Now how about the folks who elect both part A and B hospitalization and Medicare insurance? What do they need do?
Danielle:
Yeah. So the good thing is with Medicare part A and B, you don’t have to renew those. So part A being is going to cost you nothing. If you have the work history, you don’t have to worry about a premium there. Part B the thing that might change with part B is your income. So remember we said that base premium in 2021 is 148, 50 per part B. It’s estimated to go up to 158 next year, so around a $10 increase. And that is really, that’s something that you can’t really do a lot about, but let’s say that you start at a job and your income went up and now you may be earning more. And so you file that on your taxes. You might get a letter from social security that says, Hey, we looked at your income and next year, your premium on your part B is going up. So this is something for people to consider as they retire. They want to try to keep that income below those thresholds and that way they don’t have to pay more for the part B every year. The IRS sends those with security, a new file showing your updated tax returns. And then you get a letter from social security saying here’s how much we say that you’re going to pay for part B next year. So what could change there is what you pay for part B, if you have a change in your income or status, but you don’t have to re-enroll and there’s no health questions to get into a and B in the beginning.
Hanh:
Well now, what should you do if your doctor is no longer covered by your Medicare advantage plan?
Danielle:
Yeah. So if you’re in Medicare advantage, one of the downsides is your doctor could drop from that network anywhere in the year. So they, he could leave he or she could leave say an April. And now you have to find another provider for the rest of the year, because you’re in that lock-in period. And you may not be able to change your Medicare advantage plan. So if that happens, as soon as the annual election period happens, you could make a change and switch to a different plan that hopefully your doctor is in the network, which is good, because if you have an annual chance to change, then maybe you don’t have to go too long without that provider. But it’s a good idea. Every fall, when you’re looking at what’s changing with your plan for the next year to just check the provider directory. See if your doctor is still in the network for next year or call your doctor’s office and say, Hey, can you take a look at my insurance that I have on file? Is the doctor going to continue accepting this plan next year? And just make sure that everything’s going to be good to go with that provider for the next year.
Hanh:
I imagine the frustration, if someone needs help and calling into Medicare to do that. So what is the most common frustration that people experience when they call into Medicare? And what do you recommend to help them limit that frustration?
Danielle:
Yeah, it is frustrating, right? So anytime you’re calling into a big government entity like that 1-800-MEDICARE, you get there and you’ve got to select from all of these different prompts and maybe you’re not sure which department you need to go to and you may be on hold. And especially in the fall during the busy season, you may be on hold for a really long time. So there are some things that you can do. First of all, you can sign up for my medicare.gov. When you first enrolled in Medicare, go to my medicare. Gov website, register yourself and have an account there. There’s a lot of things on the back end that you can do within that account. It will show you all of your claims so you can look to see, what’s what do I owe for my doctor visit that I had last month. You can shop for plans in there. So if you need to change your drug plan and it’s the fall, there’s a plan finder tool in that portal where you can put your medications in and let the plan finder tell you which plans would be the most cost-effective for you next year. So that’s one thing. The other thing is how you enroll in your insurance really makes a difference. Some people don’t realize that if they sign up for a Medicare supplement or a Medicare advantage plan or a part D drug plan, they can do that with the insurance company, or they could do it through a broker like boomer benefits using a broker costs you nothing. So you don’t pay anything for the service. The insurance companies pay for that. And the benefit to you on that is then when something happens, instead of you having to call into Medicare and figure it out all on your own, instead, you could call your broker, your agent, who is a Medicare expert. They may be able to answer your question right over the phone. And if not, they also know how to get to the right department, which prompts to choose. They can conference call Medicare with you, or they can conference call your carrier with you and guide you through those questions or concerns a lot more easily. And quickly than if you were trying to handle that all on your own and calling into a giant call center where you don’t know anyone. And that is the benefit of signing up for your plans through an insurance agent, as opposed to directly with an insurance company or through Medicare your that extra support on the backend.
Hanh:
Now, how many are there and why are there so many Medicare advantage plans being offered?
Danielle:
Yeah. So Medicare advantage plans are very cash rich entities. When you enroll in a Medicare advantage plan, Medicare pays that plan a lot of money every month to take on your medical risk. And so if they can deliver your healthcare benefits, For less money than they’re taking in from Medicare that year, they make a very healthy profit on that money. And so tons of insurance companies want to offer them because they know that the numbers game is that you’re going to have more healthy people in a group like that. Then you have sick people. And if you can get enough people to enroll, you’re making millions and millions of dollars in your Medicare advantage plan. And so that’s why it works like that.
Hanh:
So what’s the best way to change a Medicare coverage?
Danielle:
So if you’re in original Medicare and you have a Medigap plan or you want to switch to a Medicare advantage plan, you just wait until the next annual election period enroll in the plan you want. And then you would drop your Medigap plan. It’s important to understand you would never have Medicare advantage and a Medicare supplement or Medigap plan at the same time because they don’t work like that. Medicare supplements only work with original Medicare. If you enroll in Medicare adavantage. Your doctors are sending the bills to advantage plan instead of inter original Medicare. So, if you make that change, you would cancel the Medicare supplement. Now, if you’re in a Medicare advantage plan and you want to switch back to original Medicare, that’s very easy to do. But the first thing you want to do is apply for the Medicare supplement that you’re looking at to go alongside that original Medicare. Make sure that you can pass the underwriting and get approved for that plan before you disenroll from the advantage plan. Because if you disenroll from the advantage plan and then the Medigap company says, we don’t want you now, you’re just back in original Medicare. So there’s an order of events that happens to make those changes. That’s again, another reason why they want an expert kind of guiding you through that, because these are things that the average Medicare beneficiary probably doesn’t know.
Hanh:
Yeah, absolutely. So what kind of things can you choose from your medic from your advantage plan?
Danielle:
So with Medicare advantage plans, they all are different. So the first thing you want to look at is what the premium is that you’re going to pay for the plan. Then you want to look to see, of course, are doctors in the network and your drugs on the formulary. And if you live in an urban area, like here in Dallas, Fort worth, Tons of plans to choose from. There might be 30 or 40 that you can choose from. So there’s a lot to be said there. And with every advantage plan, there is a summary of benefits document that you can look at, look to see, does this plan have a good doctor copay? What is it going to cost me if I go in the hospital? What are the extras that it comes with? So one of the things that Medicare advantage plans have. That Medicare supplements do not is the ability to incorporate what’s called ancillary benefits. So you might find it an advantage plan that operates a dental network, and you get your teeth cleaned twice a year for free on that plan. If you use the network, you might also have a vision benefit. They may pay for your eye exam. They may give you a credit for your lenses that you get. There could be discounts on hearing aids. They may even have free gym memberships. These are all things that are very attractive about Medicare advantage plans. So if you think you’re going to go the Medicare advantage route and you want some of those freebies, you’ll have a lot of plans to look at and you want to carefully choose one that has those extras that you want that will offer that to you.
Hanh:
So one of the worst mistakes that you’ve seen people do when signing up for Medicare.
Danielle:
Yes. And this is a great question because. One of the things that we noticed happening at boomer benefits. And I’ve been doing this for 16 years is we see people coming into. Medicare, make the same mistakes over and over and over again. So, it’s actually the reason that we wrote and published the book 10 costly Medicare mistakes you can’t afford to make. And some of the mistakes that we go we’re over in that book is, the one, the first one is assuming that Medicare is free. It’s not as we’ve covered, assuming that Medicare is going to cover everything. It won’t, you’re going to need to pick up some supplemental coverage, but a couple of other ones in there to kind of give you just a sneak peek that some things that people may not know about is one mistake is skipping the part D drug coverage. So there’s a lot of people out there today that turned 65 and are very healthy and they take no medications or maybe they take one or two generics and they may say, you know, I don’t want to pay money every month for a drug plan when I don’t take any drugs. Well, we never know when we’re going to get sick. And Medicare part D has a lock-in period just like advantage plans do so if you decide not to enroll in a part D drug plan, and then you get sick, let’s say. You are prescribed an oral chemotherapy medicine that costs $5,000 a month. Well, if you don’t have a part D drug plan, you’re going to spend that $5,000 a month in cash from your retirement savings until the next annual election period. When we can get you into a drug plan. So you never want to risk that you want to have a drug plan in place. That’s very. Also, if you don’t enroll when you’re first eligible and you don’t have any other sort of creditable coverage, like drug benefits from your employer or drug benefits through the VA, then later when you go to sign up for that part D drug plan, not only do you have to wait for the next annual election period, but they hit you with a penalty when you do enroll. So that penalty grows with time. The longer that you wait to get a part D drug plan, The higher that penalty gets. So it’s 1% per month for every month that you didn’t enroll in part d drug plan that you should have, and it’s based on the national average part D based premium. So right now that part DBAs premium, I think is it’s roughly $35. So let’s say that you waited five years to enroll in a drug plan. Now you’re going to pay that premium for the drug plan. Plus the 60% penalty every month for as long as you’re enrolled. And fortunately there are drug plans in most states for 2022 that are around seven to $10 a month. There are some that are a lot more expensive, but you can get a very basic part D drug plan for just a few dollars a month. And that is a worthwhile investment to avoid the penalty and to avoid getting caught in the middle of the year with no coverage. If you need a really expensive medication.
Hanh:
And this is when most seniors on a fixed income.
Danielle:
Yes. Yeah.
Hanh:
Yeah. Very problematic. So let’s say for someone who is in their mid fifties, I’m 55 and I’m still in decent health, but I don’t know which insurance plans to that’s best suited for me in terms of cost and coverage. So is there a guide on, on how to estimate costs when comparing plans ahead of time so that, we get better prepared when it comes to make a decision?
Danielle:
Yeah. And because there’s so many part D drug plans to choose from what we do is we take the list of medications that our clients, we give them a link, they put their medications in, and then we are able to sort all of the drug plans in their state. And tell them exactly which plan is going to cost them the least out of pocket. It’s important. Never to choose it. If you have some medications that you take. You don’t want to choose a plan just based on the premium, because enrolling in a $7 plan that doesn’t cover one of your medications, isn’t going to help you. So you want to put the medications into the plan finder. You can do that@mymedicare.gov, or if you’re working with a broker like us, we do it for you. We put it into our own portal and that crunches the numbers. And it will tell you not just which plan is the cheapest in premium, but it’s going to look at all the drugs that you take. What the copays for those drugs are what the deductible is on the plan, and then estimate for you, which of those 30 available drug plans is going to cost you the least in total dollars that you would spend out of pocket for the year, including spending on the premium, spending on the deductible, spending on the copays. And so we will always want to choose a plan that offers the medications that we take at the lowest potential out-of-pocket expense to us.
Hanh:
Yikes so much to know, and I’m having to make these decisions that again, if you’re on a fixed income, you make the wrong choices, very costly. Not only in terms of monetary, but your health. Well, thank you so much. Is there anything else that you would like to add?
Danielle:
I would just like to say that there’s so much good free information out there. So if you go out and on the web and you’re looking to learn about Medicare again, some great places are to hit your YouTube, the YouTube channel. We offer a private Facebook group called Medicare Q and A with boomer benefits. You can join put your questions in there. And one of my team will answer them for you. It’s totally free. You don’t have to be a client. There are a lot of resources like that available to you in your state. There are also shipped counselors that you can access to get an unbiased opinion. So if you don’t want to work with a broker, an agent, you can work with one of those navigators that can walk you through that. You can call 1-800-MEDICARE and talk to one of their staff to ask those questions. So don’t feel like you have to do it alone. Reach out to the resources that are available to you and take your time with making those decisions so that ultimately you get into a plan that’s really going to serve you throughout your retirement.
Hanh:
Thank you. Thank you so much. We’ll stay in touch and I look forward to making this publish, you know, in more platforms. Thanks again.
