UNEDITED Webinar Transcript:
Michael Baker 01:14
Thank you for everyone that’s going to tune in and watch this webinar, I was specifically wanting to cover a topic that is near and dear to me as a financial planner, especially since I work with a lot of people who are nearing retirement age, and that is Medicare, Medicare is one of those things that all of us, you know, fortunately, if we’ve been able to qualify, have to at some point in our life deal with. And so I’ve got a near dear friend of mine, who also happens to be a local Medicare Pro, a Medicare expert. And I’ve asked Maria to hop on here with us today. And we’re just going to kind of have a conversation and one of the things that Maria told me about Medicare that I really liked, and I wanted to kind of use that as a jumping point for our conversation today, as she said, Medicare when you’re when you’re dealing with Medicare, Medicare should be two meetings, you should have a first meeting with someone to give you an education about Medicare, the parts and how it works. And then the next meeting, the second meeting should be the meeting where you’re actually trying to pick how you’re going to actually use Medicare in your own life. And so what we want to do today is kind of use this video webinar as as that you know, a substitute possibly for that, first, we need to give you some education, and give you a primer on Medicare so that whenever you do speak with someone that helps you with Medicare, you can make an informed decision. So with that, I want to introduce or kick this over to Maria and Maria, please introduce yourself to everyone.
Maria Overcash 03:18
I’m Maria Overcash, have Carolina Health Connections, which is an insurance agency in Fort Mill. And I actually have a team of agents that work underneath me a couple of who specialize just in Medicare. And I’ve been in the insurance business for 25 years.
Michael Baker 03:36
So you’ve been doing it for a few minutes. Yeah, just a few. Awesome. Well, thank you for just sharing some of your time today. And you know, I’ll jump right into it. So one of the biggest questions that people you know, come to us with is, you know, when they’re getting ready to retire, or or they’re getting ready to, you know, approach age 65, something happens about six months before their 65th birthday, their mailbox becomes a drop off point for every Medicare agent, agency, anyone to do with Medicare, within our whoever wants to put a stamp on something and put it in their mailbox, they get inundated with stuff about Medicare, and they’re like, What do I do? I don’t even know, what do I do? So, you know, if we start from the very, very beginning, why don’t you just tell everyone like, you know, kind of what Medicare is and how you qualify for it. And then what the process, you know what the process looks like, once you begin to look at enrollment.
Maria Overcash 04:38
Thank you, Michael. Um, you’re right about that. I always joke that you could wallpaper your house with all the stuff they drop in your mailbox for Medicare. And that’s because let’s go into Medicare regulations. We can mail you anything. There’s no restriction on the mailing. We can’t call you. We can’t email you without you already being an existing client. consenting. So that’s why your mailbox gets exploded.
Michael Baker 05:04
That’s why I didn’t know that. So that’s, that explains so much like why people just get bombarded with mail, because that’s almost the universally approved medium to reach out to new people.
Maria Overcash 05:18
It is, it is it is. So kind of letting you know a little bit about what, what I do a little bit more is, we help under 65, as well as 65. And over, that’s why we have this, I have three agents that work with me. So we have a team. So when somebody is already with us as a client, and they turn 64, we start to give them a little heads up about Medicare, and tell them to go ahead and schedule the meeting. Um, so at 64 and a half years, like you said, you’re gonna get bombed three months prior to turning 65 you’re going to get usually a postcard in the mail from Medicare, letting you know that you’re eligible for Medicare, okay, and if you don’t send anything back, they’re gonna automatically enroll you in Part A and B, matter of fact, they’re automatically enrolled everyone who’s eligible in Medicare Part A, when you turn 65, it’s not a way out, there’s not an extra cost to it. That’s a good point. There’s not an extra cost to Medicare Part A. But then, Part B is the magic Part B is when they have a cost. And the cost varies depending upon your income for the last two years prior to going into Medicare. And whether or not you should take it, this is such a huge part. And I’m going to start with this piece because it’s so huge. If you’re working for an employer group that has 20 or more employees, and I got to emphasize 20 or more employees. Way, Part B, don’t take it push it off until you actually officially retire. Because your part B effective date is going to determine and give you a guaranteed enrollment into all of the other Medicare products with no underwriting. So and there’s a set window, it’s the it’s a seven month window for med subs, it’s the three months prior to your part B effective date, the month you get your part B and three months after. So if you go ahead at 65 and say, Oh, I’m just gonna let the Part B go but I’m still working for an employer group. Then what ends up happening two years later you decide to retire, you no longer have that super duper guaranteed open enrollment, you do have a more limited enrollment window which will still allow you to get like a Plan G or plan and at a guaranteed underwriting but you don’t have all the plants so it’s real important 20 or more employees is the magical number. Don’t take the Part B until you actually are officially ready to go ahead and retire three to four months before you’re going to retire you need to sit down with an agent you need to talk to an agent because you need to know what the heck you’re doing. And there’s a lot of parts and we sit down and this is where we talk about that first appointments and educational appointment so we explain what you need to do because you have to enroll in Medicare we cannot enroll you in Medicare the government doesn’t want us messing in that pie. Okay You can do it via on the internet or you can go down face to face and do it at one of the offices the Social Security Administration and Medicare are one in the same
Michael Baker 08:33
Okay, so there was a lot in there to unpack let’s start with the basics like Part A and Part B. So when someone is like you know there’s a there are a ton of letters that get thrown around with Medicare and if you don’t, if you don’t deal with that language on a daily basis, and I run into this a lot as a professional, my day to day vocabulary is very different than someone who doesn’t do what I do and so let’s talk let’s talk Part A tell us what Part A is that’s what you said a there’s you know, if you qualify for Medicare, if you’ve if you got your quarters of coverage and you’re eligible for part A, there’s no cost to that but what is Part A for people
Maria Overcash 09:16
Okay, so we’re going to undo the alphabet soup called Medicare. Gotcha. Okay. First to be eligible you must have worked 40 quarters in the United States. You don’t have to be a citizen, but you must have like a green card or naturalization papers you have to be here legally and work 40 quarters otherwise you will pay for Medicare Part A that’s the exception to it. So if you’ve only worked 30 quarters you still will pay a premium for Part A. Okay free when you’ve worked 40 quarters, which is 10 years not that big of a stressor. Good to know. Part A is the portion of Medicare that covers hospitalization. It also covers on your part A things like hospice Just trying to think here just doing a quick look on the site to double check. So what that means is Part A is only going to cover if you go in the hospital, really that and hospice and home health care, sorry about that, I got to get back into that. So what happens is you’ve got an employer. So let’s take somebody who’s actually working x five, and they’ve got Medicare Part A, and they’ve got the group health insurance because they work for a company, it’s got 100 employees, okay. Medicare is the payer of secondary at that time, so your group health insurance is still primary all the way through there. Okay, so your employees, your group health insurance is primary. So Medicare is just going to pick up whatever your health insurance didn’t and back in the day, we would say they wouldn’t pick up anything because your health insurance was so good. But nowadays, you can have an $8,000 deductible. Correct, Medicare could actually potentially come in and pick up some especially because a lot of health insurance companies are now paying according to Medicare’s allowable, okay, they’re using that as their contracted rate. And a lot of times they pay like 20 to 40% over Medicare’s allowable. So Part A is hospitalization. It’s really the big dog things. part being alphabet soup is your outpatient services, it’s your doctor’s visits, do outpatient surgery, it’s your labs, it’s your x rays, it’s the stuff that you deal with day to day. Okay, Part C of Medicare, and I’m just really doing Medicare straight up Sure, is an advantage plan, we call a Medicare Advantage plans. And it takes Part A and Part B. And it wraps it all into one plan. And oh, it adds Part D in there. That’s next. So that you have one card, you go in with one card, and you’re going to pay. And there’s lots of different Medicare plans and lots of different carriers out there. So you really have to work with somebody because you want to make sure that your doctors are covered. So you don’t have to change doctors, you want to understand if your networks an HMO or PPO, that has a huge impact. And so an HMO really restricts you to only their in network doctors. A PPO lets you have a national network. And that gives you often out of network benefits. So that’s just kind of a super understanding of that, and your prescription drug. And then Part D is your prescription drug coverage. And there’s deductibles and we used to call the doughnut hole now we call it a gap, right? I tried to make it seem less, but it’s still there. So there’s a lot of different parts with that. Now, you can do a Medicare Advantage, which is a part C and wrap it all in one big pile. Or you could have your Medicare Part A and B and B by the way does have a premium on it unless you’re super low income and you get special assistance through your state Medicaid. So um, if you take those, you could wrap it with a Medicare supplement plan, which picks up your deductibles and coinsurance is your out of pocket costs. Now, I said plan and I went from part to plan.
Michael Baker 13:21
Right? Well, let’s recap really quick. So essentially, what you have is you have what we tend to think of as like traditional Medicare, where that’s going to be your hospitals, B is going to be your doctors outpatient, and then you need to have a drug plan to go along with that. So A, B and D and then or you can bundle all of that and kind of opt out is that the correct word like opt out of traditional Medicare and go with a Medicare Advantage plan and that would be part C? Is that a fair summary of those their
Maria Overcash 13:54
assessment and the Medicare Advantage plans look a lot like a group health plan.
Michael Baker 13:58
Gotcha. Okay. So Alright, so I’m aware I’m working. I’m 65. And, you know, I’m going to automatically be enrolled in part A, how do I decide if I need Part B or not?
Maria Overcash 14:14
If you’re still working full time? Yes, group health insurance? Yes, you have 20 or more employees, I would not take part B, I wouldn’t recommend it. I personally wouldn’t take it and you want to wait, because you don’t want to lose your guaranteed initial enrollment.
Michael Baker 14:31
Okay. Gotcha. So you’re what you’re saying. So what about so someone who works with like a large company as an employee, they should consider staying with you know, a is automatically going to happen. Don’t need me right now. I’m not going to enroll in B right now. I will enroll and be when I’m fully retired. What about somebody who works with like a small business.
Maria Overcash 14:53
So if they’re less than 20 employees, the employer has the right to opt to not cover you. Once you Get you’re eligible for Medicare?
Michael Baker 15:01
Maria Overcash 15:05
Okay, they can like, essentially, take your coffee in your cup, just think of it this way, nine times out of 10, you’re not going to have coverage. Oh, wow. Now, there is a time when you may want to take that employer, group health insurance and you have Medicare Part A and B, and they have less than 20 employees, you have a covering your spouse on your health insurance and your spouse is younger than you. What happens in that case is you would go on the group health plan, your spouse would stay on the group health plan, and Medicare is the primary payer and that group health plan would be secondary, but your spouse would stay on. Okay. That’s how we did it a lot before the Affordable Care Act. But now that we have the Affordable Care Act, and we have guaranteed issue, underwritten, you know, health plans for individuals, it’s often financially smarter to just let your spouse taken individually get an individual plan, and for you to just completely cut off the group health coverage all together.
Michael Baker 16:03
Okay. So financial planning tidbit in here, that that I’m going to interject, and this is something that that I’ve bumped into a couple of times, it’s not something I see a lot, but a lot of employers, a lot of employers have gone to the HSA type of health insurance plan where there’s a health savings account, that, you know, the employee can contribute into the employee or sometimes will contribute into, and and that’s, you know, to his tax preference, so you can put in money, get a tax deduction, use the funds inside of the health savings account to pay for qualified medical expenses. But what I’ve learned is that once you enroll in Part A of Medicare, you can no longer make those deductible contributions into the HSA. And so is that true to what you know, because that’s what I’ve been told them what I’ve seen that bear itself out, it changed this year, did it Okay, so tell me about that.
Maria Overcash 17:03
There are now Medicare supplement plans that are HSA plans. Really? Yep. 2021 was the change.
Michael Baker 17:10
So you can so you got helped me so that sounds really cool. Help me understand how that works.
Maria Overcash 17:17
So and Okay, so we’re going to med stops, it doesn’t apply to Medicare Advantage, it applies to Medicare supplements. So the Medicare Supplements again, we’re doing the alphabet soup, there’s correct a through I
Michael Baker 17:29
so if you do so to catch everybody out where we are, because this is what Maria and I do. And we start talking we we talk to each other, and we think we’re trying to educate other people. So Medicare Part A, you get Part B, that comes with a premium unless you qualify for Premium Assistance, like Maria talked about a few minutes ago. After Part B, there’s gaps. And so we have to, you know, look at potentially getting a Medicare supplement. And one of those reasons is you could have in some cases, unlimited exposure with just Part A and Part B. And so that’s why you need a supplement to kind of fill in those gaps. And this is where you know, you start getting the calls and not the calls but all the E the the mails from different insurance companies because Medicare supplements are underwritten by insurance companies. And so that’s what we’re getting ready to dig into right now. is not part A, Part B but this is the Medicare Supplement piece that goes with Part A and Part B All right.
Maria Overcash 18:33
And it’s plans not parts Medicare’s in parts. supplements are in plants. Exactly. Okay. So the most common Medicare plan is Plan G right now. Right and G is replaced Plan F and you can’t get F unless you turn 65 two years ago, okay? It’s grandfathered for the people that are 65 that are 67 and over, there was a birthday cut off and then after that you can’t get it’s gone. And the reason we talked about that is that that was like the Cadillac Mack daddy plan. Okay, so a Plan G is going to cover so I’m going to go I’m on a screen on my side so I can take a look at your hospital today in 2021. Your hospital plan has a part a deductible for each benefit period of $1,484. So if you have no supplement, no Medicare Advantage and you have part a hospital, you’ll pay the first $1,484 for the first 60 days you’re in the hospital, okay, if you stay in for more than 60 days day 61 through 90 go to $371 per day, per day. It’s not it’s a Cohen they have to call it coinsurance because it’s not a copay. It’s a daily show and so
Michael Baker 19:49
so that’s an important thing for people to know if you’re just doing Part A and you don’t have a supplement. You have a deductible and then at After a 60 day period, you go to a per day coinsurance,
Maria Overcash 20:03
yeah. And then after day 91, that coinsurance jumps to $742 per day, and you have a maximum of $180 benefit, there’s up to a $60.60 day, over your lifetime reserve period that correct, they’ve even shrunk it. Now, it’s only 90 days, after 90 days, you’re going to have to go to your lifetime reserve, I’m pulling this straight off of the medicare.gov website, okay? I’m saying that because anybody that’s wanting to look, tons of this information out there, you can read to the cows come home, or you can sit down with an agent that’s going to actually explain and give you packets of information. So you can highlight, excellent, okay, so it, there’s a lot of out there and to not have a supplement to wrap around it is crazy. So if we’re looking at a Plan G Medicare supplement, it’s going to pick up all that deductible and all that per day coinsurance for you and your hospitalization. Okay, and also gives you a lot of times more extended benefit coverages than what Medicare allows, what’s important to understand as a Plan G Medicare supplement, and all of the plans for Medicare are exactly the same. Regardless of the insurance company you go with. They don’t change, they’re not created by the insurance companies, they’re created by Medicare, gotcha, what’s different is the premium. And anybody that tries to tell you, because there’s two different ways to create the premiums, that it won’t go increase every year, as you get older. I’m not going to tell you, they’re not telling you the truth, because it will increase every year. So that’s
Michael Baker 21:42
a that’s a great point. And and let’s zoom in on that just a little bit. Because most people that I’ve run into, are doing traditional Medicare, where they have a, and they have B, and they have a supplement. And then every year, they have an enrollment period. And there’s all these different companies. So what you’re saying is, and this is true, that if it’s a supplement, if it’s a G plan, or if it’s a, you know, you said like an end plan or any other plan, that plan is going to be the same for each and every insurance company because the plan itself is regulated by premium the price may vary. And so if the plans the same, why do Why are the prices different from insurance company to insurance company, can you share a little bit about like, why there might be differences in the premiums for people,
Maria Overcash 22:35
this is getting into the actuarial cost, okay. So, um, the cost of the plan, the premium is based upon the actual number of people they have on that plan in that geographical area. Often it’s based on state, and also the medical exposure, how much metal how much the insurance companies have had to pay out. I’ve seen years where med subs have gone up to 3%, nothing big, but then I’ve seen years where it’s been 12 15% increases. And it’s because they’ve had a huge medical exposure. And once that goes up, they go to the state and they take everybody out every year and the state has to approve it, they have to give them all the financial numbers, and they have to go up. So that being said, different companies control things differently. Some companies just right Plan G and everybody on it, whether they’re 65 or 90, is still in the same bucket. Some companies have taken to actual warily controlling it by having three and four sub companies underneath them, okay, and they’ll do a five year window where everybody’s in Plan G, but they were all they’re all between 65 and 70 years of age, and then they’ll roll out a new plan G through one of their other companies. And that’s how they control it. Okay. So it’s kind of like you got you got grocery stores. This is easiest way for me to try to explain it. And you can go shopping at Walmart, English shopping and Harris Teeter. And are actually Harris Teeter is even better because Harris Teeter and Kroger are one in the same okay. But maybe the price is cheaper in Harris Teeter than Kroger so you’re going to go to Harris Teeter.
Michael Baker 24:32
Okay. I gotcha. So it’s like, Where are you if you can see the same brand in multiple stores, but the price would be different? Yeah. And you know, it’s the same product, but just because of the different store and how maybe they’re their internal, you know, expenses, how they have to do it, they might have to price it differently, even though it’s the same exact product.
Maria Overcash 24:57
Yeah. Well, and let’s go ahead A very, very important part about the supplements that I love. Okay? There’s no HMO, there’s no PPO network. They go by Medicare. So they pay. Medicare is the primary payer and Medicare’s national. So however, Medicare, whatever Medicare pays contracts, they pay. So if Medicare, remember, we were talking about your deductibles, $1,484, because you went in patient, yes. Doesn’t matter what that hospital charges. They’re just going to pay the deductible. That’s why it’s a supplement. Gotcha. Picking up the deductibles and coinsurance from Medicare. It’s not a full fledged medical insurance policy. It’s a supplement that’s specifically built to wraparound Medicare.
Michael Baker 25:46
Awesome. So So, you know, folks, if you’re listening, you know, one of the that’s one of the key things that I think a lot of people that work in financial services I know, every Medicare agent I’ve ever talked to, will sit here and tell you, please, please, please, shop for supplements don’t just think that Part A and Part B, are going to be sufficient for you. The supplement is what helps cover some of these, you know, costs that you don’t even you know, not even aware of most people couldn’t even tell you what the deductibles for Part A and Part B are. And then, you know, there’s there’s cut what what I believe the term is, is a benefit period with Medicare or coverage period, right, Maria, where if you get sick multiple times, but it’s spaced out just just so you might leave one benefit period and start a new benefit period with Medicare. And if you and a supplement helps you cover those costs in a way where you just don’t have unlimited rolling exposure, where you’ve got to continue to come out of pocket with the cost. Is that, is that fair? Or is that you know, me making my own world?
Maria Overcash 27:02
No. And I actually read benefit period, I’m on the Medicare website. Okay, so I’m giving you everything exactly. To the tune of what you’re talking about. You’re right, it is a benefit period. And I’m trying to find the specifics, because they’ve done a lot of changes in Medicare. I believe if you’re readmitted within so many days, and it might don’t guarantee me on this because they keep changing things on me, it might be a 30 day period, that’s your benefit period. So it might not be may not really hit that deductible. Well, I think part of writing,
Michael Baker 27:33
I think part of in my world, it’s like part of knowing that these things exist, because we know like sometimes the date, the number of days will shift, the dollar amounts for certain things will shift, but it’s knowing that you know, hey, this is just as an unlimited protection. Okay, Medicare Part A covers you and you’re covered for a while, but even like you shared, you have your part a deductible. But after 60 days, you go into a daily copay. And then after another period of time you have another day the copay was even higher. That is what you know, supplements are there to help cover is those additional exposures of CO insurances. Otherwise, you’re having to come out of pocket for those types of things. And, and something you know that that ends up being obviously a severe enough medical event, if you’re in hospital for that period of time, can become, you know, just unbelievably unbelievably expensive. So part A hospitals, hospice, Part B is your doctor’s your outpatient, Part D. Let’s talk about D for a minute, you got to have a supplement. Well, you don’t have to, but we highly, highly, highly recommend a supplement to help you close up the gaps both Part A and Part B, Part D,
Maria Overcash 28:56
just to kind of have that supplement. Medicare Supplements when you’re 65. Start around 100 $120 a month for a good one you can go for but I’m talking like Plan G which is the Cadillac and Plan G By the way, covers all those deductibles and all that coinsurance on Part B. I mean Part A, the only thing it leaves you with is the Part B deductible annual deductible and that part B annual deductible for 2021 is $148.50. Yeah, a Plan G that’s your deductible on your health insurance for the year for everything covered under Medicare. Awesome, except for your prescription drugs now which is scription drug
Michael Baker 29:37
which is why we have to talk about those because drugs are a big business here in the United States and there are a lot of people. As we get older, we tend to get on some type of medication in one way, shape or form. And Medicare is no different. We have to have a way to help cover the costs of those medications. And that would be a part D drug plan. Correct. Yep, it would
Maria Overcash 30:01
Now in this case, Medicare is never going to pay the claims on Part D, you’re going to have to select a Part D prescription drug plan through a private insurance company. And there are a lot of options. Most states, it runs around 30 to 40 different carrier options. So yeah, it’s ridiculous how many options?
Michael Baker 30:22
So how so how does somebody if you have 40 options, how does someone have a shot at picking a good one or the right one, or the best one.
Maria Overcash 30:31
And that’s where again, having a good agent helps, okay, they need to know what your prescription drugs are your current prescription drugs that you take every day, they need to know the name of the drug, the dosage level, and how many you take. So per day, so that they can take all of that information. And they stick it in the software, whether it’s the Medicare site, or we’ve got a couple other carriers that a couple other companies that help us with it. And they take all of those drugs, and they compare all of those plans at one time. And then they can shrink it down to like two or three plans that have the lowest out of pocket for you for the year. Okay, cover all of your drugs. Because what good is a plan if it doesn’t cover all your medications?
Michael Baker 31:24
100%. You know, I think that’s one of the biggest sources of pain. For a lot of people, when they’re navigating Medicare is Part D, because, you know, they might be on a certain medication, they go visit a doctor, doctor wants to prescribe them something new. Now, the new medication is astronomically when it you know, increasing in price, because it’s not covered under the DEA under their drug plan. And I think that’s one of those areas where I feel like having a good agent or someone to speak to to educate you about Medicare is invaluable because you’re living this is the rest of your life. This isn’t just like a one time we’re done, you know, check the box. It’s like financial planning. Like there’s constantly things to be thinking about working through and you know, your health and your medications and what’s going on what happened in the last year for you health wise, those types of conversations need to be had when you’re getting ready to enroll in a drug plan, but also maybe re enroll and look for another drug plan for the for the upcoming year. Because you could you could find yourself in a situation where you’re you’re on medications that are no longer covered. Right.
Maria Overcash 32:38
And that is so important. That’s why every year October 15, through December 7, there is an annual enrollment period. And you go through work with your agent, and you update them with a list of your medications, your current medications, again, the dosage level, the medication name, and the number that you take. Because if we think you only take one pill per day, we’re going to look for a quantity of 330 on your prescription level. But if you’re taking that medication three times a day, we need to put in the to take 90 and a month. It really affects your drug plan. But we go through every year and we can do a complete audit to see if the drug plan you’re on is still a good option and still covering or if there may be a better option. And I know people are like oh, I don’t want to have to change. Well, our goal is we also want to keep you with the same pharmacy. We don’t want to upset that applecart if we don’t have to either. So there’s a lot of different variables that go in here. And the person that you’re hurting the most by not sitting down and talking with an agent every year annual Roman is yourself.
Michael Baker 33:44
Right? So let’s, so we’ve got our part A, we got our part B, we’ve got our supplement, and we got our drug plan. And let’s pretend for a moment that you know what, that’s just all way too much. So I’m going to opt out of all of that, and instead I’m going on to Medicare Part C. Can you tell me what part c is.
Maria Overcash 34:08
So part C is a Medicare Advantage plan. And like I said, it has a network that’s much more restrictive, oftentimes, especially if it’s an HMO, than a supplement. If you have the PPO network, you’re going to have more flexibility. Um, but more than that, it is all of it combined. So a Medicare Advantage plan will have co pays for your doctor’s visits, co pays for your hospital stays. And oftentimes it’s like a per day copay for the first five days. If you go inpatient hospital, co pays for pretty much everything. It’s pretty much just a good copay plan. Sure, but you could have $6,000 worth of exposure with all those co pays throughout the course of the year. Gotcha. So the Advantage Plan really depends on your personal financial situation and your comfort level. And that’s why we sit down and explain to people the difference between the plans, we give you the Medicare book, we explain what the options are. And we send you home with a packet, a whole folder full of information. So that you can go home and make an educated decision without anybody pressuring you. Because there’s a lot and it includes your drug plan in there, too. So now you want to make sure your doctors are in the network that all your drugs are covered. There’s a lot of variables going into that pie to make sure we get you the right plan.
Michael Baker 35:41
So Medicare, so Medicare Advantage is kind of like bundling services, you know, like everything’s bundled up like and it’s all those parts rolled into one thing. You’re not dealing with traditional Medicare, you you’ve kind of working with a private insurer, and it functions kind of like a PPO or an HMO network where you have doctors and hospitals that you can use co pays to handle your drugs and all that’s decided based on the actual plan itself. Is that right?
Maria Overcash 36:15
Yeah, so it think of it as as shopping for our group health plan for yourself. Most people have worked for an employer, so they’re not used to shopping for health plan. But if you’ve had an individual health plan, you can still shop several different companies. Right? Now you’ve got, oh, at least 12 or 15 different insurance companies that are in the advantage world in every area pretty much. And so and they’ve got anywhere from three to eight plans to choose from. So it gets complicated. Gotcha. And there’s a lot of pieces to it. And that’s why every year it’s so important to do a review is guaranteed issue, you can change that every year, the Advantage Plan and it’s always guaranteed issue, there’s no underwriting.
Michael Baker 37:02
Well, you you raise a great point because one of the things that that I have observed, as just as a financial planner is every year there’s this enrollment period, which is coming up in October, there’s going to be an enrollment period where people have the opportunity to transition or change their current Medicare plan. So if they don’t like their supplement that they’re in right now, they have the opportunity to possibly move to a different supplement with a different insurance company. Same with their drug plan, they get to look at their drug plan again, reassess. So there’s there’s a period every year where there’s a kind of a re education moment, get back together, do a review with the agent. One of the things that I have observed is a lot of times people are hyper focused on price and I and I realized that price is important. But Quality Matters, especially when it comes to your health care. And so could you share a few thoughts about you know, what people should be really looking at not just the cost, but you know, maybe something like the total package as far as you know what they’re doing, versus just trying to find the cheapest plan or the cheapest supplement.
Maria Overcash 38:14
So I always start with Who are your doctors that you love and trust and want to stay with? Okay? Because my first priority is to make sure you get to keep your doctors that you love and trust if you’re not happy with your doctors and you don’t care Do you have a preference of hospital if
Michael Baker 38:29
you like your doctor, you can keep it Yes, that’s I’m sorry, I had to throw that in there just sounded too good.
Maria Overcash 38:40
Well, in Medicare, we can actually do that. Okay. The individual markets a whole nother BS.
Michael Baker 38:45
I understand. I understand.
Maria Overcash 38:46
And Medicare we can we actually can do that because we have so many options. So yeah, um, and also kind of hidden on what you’ve been saying the med sups. Once you get into a med supplement, you can move it but you don’t you’re not locked into annual enrollment. That’s not a locking date. Med subs can be changed anytime
Michael Baker 39:06
they can. Yes. Okay. So So if it’s, if it’s February, and I decide I don’t like this, this company anymore. They’re the I know it’s a GE plan, but their services bad and I want to move to a different company, they can do that at any time. They do not have to do that during open enrollment.
Maria Overcash 39:26
Yes, but there’s one caveat, okay. Med supplements have underwriting after you get through your initial enrollment period. I
Michael Baker 39:33
thought you might say that so that’s what you got to be careful for because if you guys remember and you’re with us from the beginning, Maria talked about a seven a seven month window with where you know, you can roll into your part B right, but there’s also a very favorable window for these Medicare supplements to right where when you initially are eligible, there’s not a lot of underwriting you pretty much can get on with a supplement plan. But after you’ve had your free roll, if you want to start moving, they start underwriting you correct.
Maria Overcash 40:09
And here’s the caveat they like to do, they like to hold your rate the same or close to the same until you hit 67. So it’s kind of hold you tight the first couple of years they don’t, there’s not a big if I look at most of my carriers that the rate is the same for 65 or 67 year old because I also know a lot of people aren’t retiring till they’re 67 Okay, so 68 the magic age when they start hitting new with some some increases
Michael Baker 40:35
interesting. They, they they’ve got it down to where they know the data. They know like with the lion’s share when people are kind of transitioning from work, we’re definitely going to be transitioning on to Medicare and not on group coverage
Maria Overcash 40:49
kind of thing. A super highlight a Plan G will cost somewhere around $100 a month, 110 bucks a month. When you’re first coming on, it will max out around at worst case 300 $350 a month when you’re 85 years old, kind of around 85 somewhere around that zone at 85 they stop increasing it they just kind of let you go through Okay, I’ve not seen anything over 85 I mean $350 a month that’s pretty much the top end of this the thing that everybody gets so obsessed with is they’re looking at the initial rates, they need to look at the rates at age 75 and then 85 That’s good. We get we have the rate sheets I’ve moved I helped the 80 year old and reduce their supplement premium $100 a month because some carriers don’t go up as heavy and the older ages
Michael Baker 41:48
and that’s important for people to know because like you were saying earlier if you’re if you’re on a GE plan that GE plan covers the same thing it doesn’t matter what the insurance company is with the insurance company is regulated to offer the same thing if they’re going to offer a GE plan it has to be the same so that’s important because a lot of times people you know there are a lot of different insurers you mentioned that you know where they’ll be companies that have you know smaller insurance entities underneath a larger umbrella but they’ll be like oh I understand I know this company and I’m familiar with him I don’t know the smaller company but if they’re offering a G plan and they are highly rated ensure that g plan is going to be a G plan. Right well
Maria Overcash 42:31
and yes, the J plan and the plans are created by Medicare insurance companies to market and sell gotcha pay the bills now here’s the other thing there’s another little piece that people miss some insurance companies if you buy a GE plan will allow you at any time down the road if you decide you don’t want as rich a benefits to change to a lower plan and a lower premium without putting you through underwriting it’s not all there are a couple out there that will do that that once you’re in you can step down and there’s no underwriting that makes
Michael Baker 43:07
I mean that makes sense from an insurance company’s perspective because you know they’re all in there in the risk business so if you’re going to take on by default if you’re going to take on more exposure yeah they’re happy to let you do that because they’re already they already got to cover you because you’re on if you’re on you know a plan with them already so that that makes that makes a lot of sense but you know what, I think you dropped a real pearl for anyone that’s watching this or listening because you know we look at the initial rates but looking at what what are the rates like for you know, people that are 75 you know, eight to 10 years older than you you know what what does that increase look like because you know obviously inflation it’s it’s in all the news headlines right now but healthcare inflation we’ve been talking about for years like how health care inflation cost of health care has gone up at a higher rate than just about anything else in our country so you should definitely be concerned about that. If you are looking at transitioning to retirement when you you’re most likely going to be on you know a more stable or fixed income sources now obviously if you you know, if income is no option for you and you’ve got tremendous assets then God bless but a lot of people are really concerned about like, hey, how do I make my money last? How am I going to make my retirement income plan work, and health care expenses is not something most people want to sacrifice, it’s actually up there near the top of the list as far as concerns go. So that’s an important thing to to definitely be thinking about. But while it’s on my brain, I wanted to go back because we started to talk about it and we didn’t, but I mentioned to you that at age 65. If you go on Part A, you can no longer contribute to an HSA and a lot of people a lot of employees especially high earners love their HSA is because it’s a tax deduction. And you know, they they’re squirreling away a little bit of money, they’re getting a little bit of tax break on doing that. And you know, Part A kind of ruins the party, but you said that there’s now an HSA, Medicare supplement. And I need to include what that is, because that sounded pretty fascinating.
Maria Overcash 45:17
Ah, hold on a second, I have to get into that I have not dived 100% into that Medicare Supplement yet? Because it’s only our first year,
Michael Baker 45:27
is this brand new, right? It’s brand new.
Maria Overcash 45:29
And I understand what you’re saying. A lot of self employed our business people, people that work for companies would like to have an HSA. So, that’s this conversation, I think we’re gonna have to continue after I pull some more research, okay. I’m gonna throw something else at you. Okay. So that company that offers group health insurance can also offer to pay the premium for the med sup for their employees, if they do it across the board for everybody. Okay. So they can set it up, where instead of putting the people in group health insurance, they’re actually helping offset the cost on the med stops.
Michael Baker 46:14
Okay, so the so that they know how does that so if we’re talking about it from a business owner perspective, in let’s say, you have a you have a company and your own group insurance, your group health insurance, how does that affect your participation rate? If people are moving off of the plan, and then you’re paying, you know, paying their Medicare Supplements? How does that impact the participation rate on the group health plan?
Maria Overcash 46:39
It doesn’t? Well, because of the fact that that’s actually qualified medical, so they’re exempt from that. And the participation count?
Michael Baker 46:45
Oh, okay, gotcha. So they’re not counted towards the participation.
Maria Overcash 46:48
Right? So if I got 100 employees, and I have, let’s say, 10 of them are on their spouses coverage, and another five are on Medicare. Because the companies set up a Medicare, and there’s a whole program just for groups to do Medicare for their employees. Gotcha was 15 people come out of the pool that we’re counting to get the participation.
Michael Baker 47:10
So they knew they would grade you like your you only have 85 employees and put your participation rates on that number. That makes sense. So we’ve we’ve covered a ton. And I want to try to LIKE BUTTON everything up here. But you
Maria Overcash 47:25
go ahead you, you and I talked the other day. And one of the things that really kind of hit home with me, and it’s a situation where it really kind of people are kind of under a misguided influence. Because we know that Medicare Part A covers your hospital, Medicare, Part B covers your doctors. And then there’s this issue of what if I need home health care? Or if I need skilled nursing? How does that work? Where do I go? So Medicare has a benefit for home healthcare, but it’s only for a party. It’s only if you for like a nurse to come out and change bandages and administer medications. It’s not for an aide, it doesn’t cover a home health aide at all. The other part that’s really important is going into a nursing home. So the most common injury is you fall you break your hip, okay, you’ve got in the hospital, you’ve been in there for three days, you got to go through rehab, it meets the requirements of not being able to perform, you know, certain daily living activities and you’ve been in the hospital. So Medicare Part B will cover you to go in a skilled nursing facility, a rehab facility for up to 100 days and the first 20 days you pay nothing. After that days, 21 through 100, you pay $185.50 per day, or your supplements pick that up. Gotcha. Now, the important part about this is it is only a rehabilitation benefit. So if you’ve broken a hip, you fallen and broken your hip, you’ve had a heart attack and you need cardiac rehab. It will pay it will not pay to cover for neurological issues. So if you have Alzheimer’s, it’s not going to pay for that skilled nursing facility a dime
Michael Baker 49:28
huh? Yeah, so I think what we’re getting at is one of the the big misinformation things or ideas out there is that Medicare covers long term care, and it does not in Medicare is not a form of long term care insurance. Now, there are some things where if someone’s older, so like, let’s use an example. Let’s just say mom, you know, it could be my mom, your mom, whoever, but let’s, let’s say you know, mom up there, mom’s 80, you know, 80 years old, for most part, mom’s independent mom falls down at her house and she breaks through and she breaks her hip, or she hurts her hip has to go to the hospital, she can be discharged from the hospital and go to a rehabilitation facility. And, you know, as long as it’s been, no, she met the criteria for the hospital stay, she can be transferred over. And there’s a period of time where Medicare will cover that. Right? But after after, you know, you know, that period of time ends. And let’s say that mom is no longer able to, you know, take care of herself because she, you know, her, maybe her health deteriorated or she’s too frail. Now you’re looking at a potential Long Term Care situation where she needs home health care, or she needs to go somewhere where she can have some, you know, ongoing custodial care. Medicare is not going to cover that that’s going to be back on, you know, how does your family cover this and take care of mom? Is that Is that a fair summary is
Maria Overcash 51:00
a fair, very fair assessment of it. And I’ve worked with so many people in this situation. And so you want and I mean, I have a 94 year old mother living at home. So I had her at her home, she I can’t get her to move in with me. So what ends up happening is, this is the most difficult time in your adult life, you now have to actually take control over your parent, because they need an aid. So do they have the financial wherewithal to pay $25 an hour for a nurse’s aide to kind of help the home health aide to come in and live? Stay with them? So you can go to work during the day? Can they be on their own at all? Do you have to give up your job to somebody in the family have to give up their life and their job to go take care of them? Right? You know, what is the financial situation? Where are we at? How are we going to do this? A lot of people get forced to sell their homes.
Michael Baker 52:00
So they’re forced to sell mom and dad’s home? Yep. And then what happens with mom and dad or you think mom and dad move in with them?
Maria Overcash 52:08
It depends on the personal situation.
Michael Baker 52:11
That’s that’s the, that’s the puzzle, right? That’s like, the The question is, what are we going to do? How are we going to take care of mom? Or how we’re going to take care of Dad? where, you know, whose resources? Do they have resources? If not, are you who are going to, you know, provide resources, B time or financial capital, or a combination of the two, you know, where are they going to go these are, these are the things that we it That in itself, long term care is entirely another topic, you know, that deserves its own, you know, time on the stage. But I think the the key, you know, linchpin of this is like Medicare doesn’t do that, like, Medicare can cover you a little bit, but you have to have, there are certain criteria that has to be met, for Medicare to step in and fill those gaps. And one of the things you said, that I think is just really telling was, it doesn’t cover the neuron or neurological stuff. So if you know mom or Mom, let’s say mom has dementia, and she’s slowly deteriorating. You know, that’s a true Long Term Care situation. But you know, if mom’s physically came, you know, hasn’t hurt herself or doesn’t need, you know, rehabilitation, but her mental state just continues to slip. That is where a lot of people are finding themselves is like, we didn’t even have a buffer period where there was an event that helped us, you know, get ready for this. It’s just lo and behold, we realize mom can’t take care of herself anymore.
Maria Overcash 53:49
Yeah, and so the reason I think we keep referring to mom, women, women, womelive longer than men, that’s that.
Maria Overcash 53:58
And, you know, my dad passed away nine years ago, my mom is 94. She’s still living on her own, she took care of dad. And on his radio, I got a mother and a mother in law. So live with our father, my father and father Rob both died the same year. They are stubborn, set in their ways, and will drive you absolutely bonkers. And you have no choice but to be there and take care of them. So your parents took care of you when you were a child growing up. If you’re blessed enough to have them and they’ve made it past the age of 80 you’re gonna be taking care of them. Yeah.
Michael Baker 54:42
That’s a great point. And I think you know, from a financial planning standpoint, that conversation should we had, you know, I mean, as a financial planner should be finding out like, hey, are your parents still living? Do you anticipate having to care for them? If not, like, what’s the plan for for mom and dad to take care themselves. And that’s a that’s a wonderful planning conversation. But I want I want to try to just recap this really quick here. I know we’re coming up on our time. But you know, Medicare, big idea Medicare is confusing, and we know that it’s a government run program, tell me a government run program that isn’t confusing. But you know, we highly recommend, you know, if you’ve, if you’ve been able to watch this, or listen to this, you know, get some education first, you know, don’t just, you know, have, you know, an idea like, this is what I’m gonna do, because my neighbor did this, or my friend told me that this was what they were doing, it sounded great. Get some education for yourself, like Maria said, you know, you should have two meetings, you should have an educational meeting, get your Medicare booklet, get your questions answered, get a good idea for you to go home, do your own homework about your personal situation, and then have that trusted agent come back and talk to you specifically about the best combination for yourself. And so you have your traditional Medicare, where you’re going to have your part A, you’re going to have Part B, and then you need a drug plan. And we recommend highly, highly recommend a Medicare supplement to help fill in those gaps. And if you decide, hey, that all sounds great, but I really liked this medicare advantage over here, you need to understand how that works. That’s part C, right? So that’s completely different, then then Medicare. Maria, tell me, if someone decides, you know, hey, I really liked Part C, and then they get started with it. And they decide it’s not for them, do they? Are they able to go back into traditional Medicare? What’s that process like,
Maria Overcash 56:40
they can if they are fairly healthy, because they have to go back through underwriting for the med supplements.
Michael Baker 56:48
So that’s a great, that’s a great thing for you to consider is your own personal health. You know, especially because a lot of people, I think, everyone, if you do it right, you should have that one opportunity to get into a Medicare Supplement without any underwriting where they’ll they will, you know, take you. But then after that, you have to be ready to, you know, to go through the underwriting process. And we talked a little bit about that if you want to switch supplements entry year, or if you want to go from an advantage plan to a Medicare supplement plan. So that’s a big thing. But two of the big nuggets that I loved from this conversation was number one is definitely if you’re looking at enrolling into a supplement plan, check what those check what those rates look like 10 years down the road, these these agents, Maria was saying, Hey, you know, the agents have the rate sheets, they can show you like, hey, how this this product prices itself, you know, with people eight to 10 years older than you are right now, look at what that looks like, that’s a huge thing, especially if you have some medical issues. And underwriting is gonna be you know, something you have to think about. And then the other thing is, you know, Medicare is definitely not designed to be a long term care solution for families. It’s designed for healthcare. But you know, and it has some ability to cover some skilled nursing care, some rehabilitation, if there’s an event where you know, rehabilitation is necessary. But what we tend to think of is long term care, Medicare is not designed for that, nor does it cover that. So you need to have that conversation as a family, if that’s going to be something that you need to be concerned about for the future.
Maria Overcash 58:27
Well, and just to kind of reiterate on that, in South Carolina, the average cost of long term care is over $60,000 a year.
Michael Baker 58:35
Right, that’s average, that’s average, that average,
Maria Overcash 58:38
that’s not the really good places,
Michael Baker 58:39
that’s not the Four Seasons, you know, facility that’s like, Hey, this is the average the average place.
Maria Overcash 58:46
And so you have to really kind of sit down and look at all of these options and your money and everything else. But I wanted to hit on one more thing, as you talked about Part D. Gotcha. If you don’t sign up for Part D, let’s say you say I don’t need it, I don’t take any medications. And the Part D plans can be anywhere from like $15 to $100 a month for prescription drug coverage depends on the plan you need. There is a 10% penalty based on the average cost of party per month for every month, you opt not to take part D and you can only enroll after your initial enrollment period during the annual enrollment period. So if your birthday is in February, and you say I’m not going to take part D, you’re now going to have a 10% penalty per 10 months. So you’re looking at extra money, the longer you go without it, the bigger the penalty. The whole point is you’re going to pay what you should have paid in the beginning because they’re going to recoup it back off of that penalty. Um, but you really need to have it just a $20 plan. Because you never know when you’re going to need a medication. Exactly. Wonderful. COVID pay endemic, we’ve had has really had people that had no health issues who now had to go get three and four medications in order to get through COVID.
Michael Baker 1:00:06
Yeah, I think that’s a fantastic point. Because, you know, there are a lot of people last year that, you know, no one, no one predicted that, you know, 2020, we were going to get hit with a pandemic, they’re telling you, they predicted it, they’re, they’re full of it. But you know, we have this pandemic, complete Black Swan event that happened, and you know, people needing all kinds of medications, and if you weren’t ready for that, to have something, there’s been a lot of, you know, exposure there. And this is where you hear the horror stories about Oh, so and so did this. And then they had this, you know, $10,000 bill for all the medication, or they had a $10,000 bill for the visit with the you know, the hospital because they didn’t have, you know, appropriate coverage and so forth. So, I think that the ultimate thing is, like anything else, you know, part of good financial planning is risk management, and you cannot mess around with your own health and Medicare is what is available for those of us who are generally speaking over age 65. I know that there’s some circumstances where someone can get on Medicare a little earlier. Yeah. But generally speaking, when you when you reach retirement at you know, your retirement phase of life, Medicare is how it works. So, I would highly recommend that you find yourself a good agent, a good source of information, someone that is, is much interested in educating you as they are and working with you on an ongoing basis as a client because things are going to come up, life is going to change, your health status may change, you may get healthier in retirement, you know, you less stress, more time to play golf more time to go on walks, you know, grandbabies arrive and change everything you decide, you know what I want to be around for my grandkids, you get some healthier habits. You want someone that can be a trusted adviser to you during that phase of life, they can help you navigate this, you know, alphabet soup, as Maria called it with Medicare. So definitely highly recommend if you’re local to our area, I’ll make sure I throw Maria’s contact information up on the video graphic. And you know, thank you if you got any questions, Maria, what’s the best way for someone to reach out to you
Maria Overcash 1:02:23
call my office 704-512-0600 you can check our website carolinahealthconnections.com. But if you call the office, you can actually press a prompt for one of my two Medicare specialists to the mike or Sue, and you can go straight to them to get questions answered. Instead of appointments. Joan Lawson we’ve got six different extensions because we’ve gotten so big and she’ll she’ll help schedule you an appointment if you can’t get to one of them. So it’s just it’s important to just have that conversation. We are all about education. Because I want you to understand what you’re jumping into before you buy it. Every time I think of somebody that’s trying to hurry up and get you to buy something I think it’s think of the used car salesman and his plaid pants. Yeah, and I don’t want to ever be the used car salesman in this plaid pants. I just believe that education the more educated you are, the less regret you have the more you’re comfortable you are making the right choice for yourself.
Michael Baker 1:03:24
No, I’m with you. And and like like everybody else. I mean, you know, I’ve got I’ve got parents, my, my dad, you know, my dad is, you know, he gets the calls and he gets the emails and let me so I don’t want to meander too long. But one of the things that people do is they they go online and they look for information. And I can tell you I can tell you if you’ve made it this far. And I may even put this at the beginning of the video because I feel I love that we have so much information available to us. But if you’re going online and you’re putting in your email address and you’re putting in your phone numbers, to get Medicare quotes or to get Medicare information you are giving these people permission to reach out to you and call you from everywhere. Who knows where to mail you to email you to fill up your your inbox with all different kinds of information. I cannot recommend enough how how much I value a trusted expert that’s local somebody that you can reach out to or someone that you can you know, get on a zoom with some somebody that you can face to face talk with about your personal situation. So we’re going to make sure all of Maria’s stuff is up on there on the graphic. We’ll make sure that her websites are linked in here so that you can reach out to her if you have any questions and definitely can always email me as well. We’ll make sure we get you put in touch with the right people. But Medicare is a huge issue. Health care and retirement is a huge issue. And so we want to make sure that we’re doing our part to try to educate you so you can make wise decision for yourself. So we’re gonna Thank you for joining us and everyone else. Thank you for paying attention and we’ll talk to you next time
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