Nick: Hello, and welcome to season two, episode three of Seniors Living Healthy. As always, I’m Nick, I have my co-host, Zach here.
Zach: Hey, folks.
Nick: And in episode three, we are going to discuss commonly purchased products for Medicare beneficiaries, why that is, and how they work. Zach, fire away.
Zach: So, the first one we’re going to explore a little bit is the one that—like I said, if we had a nickel for every time someone asked about this, we’d retired ten years ago.
Zach: Dental-vision-hearing plans. Um, you know, a lot of people ask about those because they have them through work. They retire, then people, they get Medicare explained to them. They’re, kind of like, “Oh, I’m missing some dental and vision.” Kind of explain there what Medicare covers when it comes to dental and vision, and how a dental-vision planning can plug into those gaps.
Nick: Yeah. So, it’s important to remember that Medicare does not cover routine dental and vision services, Zach, right? And what I mean by routine is non-medically necessary, right? So, for those things like X-rays, for cleanings, for cavities, basic services, Medicare doesn’t cover. And the same can be said for vision, right? Those eye exams, those lenses, those frames, Medicare doesn’t cover, right?
So, the purpose of dental-vision-hearing policies is to come in behind Medicare, offer those basic benefits day one, right, and offer the mid-level benefits, you know, day one. And up until recently, major services, specifically on dental, weren’t covered, right; they had a one-year waiting period. You know, so we’re excited to announce that one of our large partners has just introduced a dental-vision-hearing product that has day-one coverage on major services as well. So, really not going too deep into benefits there, Zach, because all the plans differ. The thing to know is these plans are designed to cover basic benefits one hundred percent day one while also offering coverage for more major things, day one now in some instances, as well.
Zach: Yep. And so, you know, we are a seniors-geared podcast, but you don’t have to be a senior to buy these plans.
Nick: Absolutely. Yeah. So, the good news is, you know, we can sell dental-vision-hearing policies to anybody aged 18 to 89, right? And the thing to know is here, you do not have to have Medicare nor do you have to have any other type of insurance to purchase this policy. However, if you do have other insurance, this policy does not affect it back or forth one way or the other.
Zach: Yeah. And so, no kind of looking at people we do have on Medicare Supplements about how these policies can be bought, obviously, standalone policies, but we do have some companies that offer a discount if you sign up for them at the same time.
Nick: Yeah, so two things there. Number one, you know, most of the products that we sell, Zach—and we’re kind of guilty of being pigeon-holed here—are individual policies, right, whether it’s a Medicare Advantage plan, a Medicare supplement plan, a final expense plan, et cetera, they’re individual policies. However, you know, one of our providers actually allows us to sell policies to individuals, to individuals and spouses, individuals and children, and families, meaning two spouses and children. So, if you are not 65, you’re not Medicare eligible, and you’re needing insurance like this, you can buy this policy, too.
Zach: So, you’ve kind of touched on the different—the waiting periods, you know, there’s no real qualifications for this, there’s no health questions involved with it. Are there networks and things like that on these plans?
Nick: Yeah. So, you know, some of our providers have networks and some don’t. You know, I’m thinking of one of our providers, they are open access. Any dentist or eye doctor is allowed to bill them. However, it’s worth mentioning, you always want to make sure you are seeing a network provider when participating in a network-based policy because that’s where the lowest cost is going to be, right?
So, we do have plans that have no networks, they can be used nationwide, however, for all dental-vision products, you’re going to want to make sure you use a preferred provider whenever possible to get the lowest cost to you.
Zach: Yep. And something else kind of talking about adding on there, you know, most times these vision riders, they are—you know, they’re riders versus standalone, but if you’re on Medicare, if you’re diabetic, you’re covered vision-wise there. So, kind of wrapping up the dental and vision coverage, you know, these plans, they vary across the board, really any age can be when you pick those up. They don’t have to be in our senior market here. But their main goal is covering those cleanings, routine things that Medicare is not going to be medically necessary and pick up.
Nick: Yeah. And it’s also worth mentioning here, you know, there’s different types of policies, right? So, you know, yeah, if we get the highest-level policy with day-one major coverage, it’s not going to be so inexpensive, right, I mean, relatively speaking. However, you know, for those individuals that are just looking for basic services, right, there are some phenomenally affordable plans out there that offer two free teeth cleanings and corresponding exams each year, 80% coverage day one on basic services, like fillings, extractions, et cetera. So, if you’re wondering, you know, if A, you need this coverage, or B, if it’s affordable, reach out. You know, once again, our job is to ask the utilization questions, our job is to ask what your goals are, and then ultimately, we’ll try to match a plan to you that fits all or as much of your criteria as possible.
Zach: All right, Nick. So, kind of moving on down the line again there. Another big thing we see is cancer coverage.
Zach: You know, a lot of people think, oh, well, cancer coverage, that’s mostly medical. Not necessarily; a lot of your costs with cancer is non-medical, which Medicare doesn’t—not going to take care of for you.
Nick: Sure, sure. So, you know, some of the things that we like to talk with people about this, Zach, is cancer coverage, a predominant amount of the cost actually isn’t covered by traditional health care, right? And what we mean by that is whether it’s travel expenses, going to MD Anderson in Houston, whether it’s lost wages being off work to be treated, whether it’s the cost of prescription drugs, which we’ll go over more here in a bit, et cetera, traditional insurance doesn’t pay these things, right? So, we recommend that all of our clients on Medicare pick up a $5,000 cancer policy to help pay those incidentals that Medicare does not.
Zach: So, you know, we know traditional health insurance doesn’t cover all costs with cancer there.
Nick: Mm-hm. Yeah.
Zach: So, why is it important for a Medicare beneficiary to have those coverages, cancer coverage?
Nick: Well, you know, Zach, let’s differentiate here. You know, so for those individuals that have Medicare and a Medicare Supplement, yes, their hospitalization is going to be covered it at a hundred percent. For those individuals, the 20% on outpatient treatment is going to be covered, you know, at a hundred percent. But what we’ve seen, we’ve seen a major shift in outpatient cancer care, over the last five to ten years, and really what’s happening is, they’re no longer burning people with radiation, they’re no longer doing these outpatient chemo treatments. What we’re seeing more and more is oral medications, right?
Oral medications and, you know, as we know, when you go to the pharmacy, they don’t give you your medicines until you pay for him. It’s unlike the emergency room, unlike the doctor’s room where they’re required to treat you and stabilize you before they can ask you if you have insurance. At the pharmacy, they will ask you and they will make you pay for your prescriptions. Now, that may not sound like much, but for those individuals that have Medicare and a supplement, their health care is covered, right?
But what about that tier-five script, right? On your prescription drug plan, you may be responsible for 25 to 40% of the cost of those tier-four and five drugs. You know, quick math here, Zach. If the drug is $1500 a month and you’ve got to pay 40%, that’s $600 you got to come up with or you don’t get it, right? So, what we’re seeing more frequently is a lot of those treatments are being out-of-pocket in the form of co-pays for prescriptions, right?
And keep in mind, you know, it’s not that often somebody takes chemo one time for one month, right? A lot of times these are recurring things, right? So, our goal is to make sure not only that we have their health care taken care of, but we want to give them a lump sum payment to help cover those incidentals, right? So, that would be for Medicare and Medicare Supplements. And it’s also worth mentioning that if an individual is on Medicare Advantage—you know, in episode two, we talked about those major medical deductibles.
So, not only did the people on major, you know—or excuse me on Medicare Advantage have to pay those prescription drug costs, not only do they have to replace lost wages, not only may they have to, you know, pay travel expenses, but they also are going to have to pay that major medical deductible, right? So, you know, if you’re getting treatments, you’re getting doctor visits, you know, 20% a pop adds up, right? So, we want to make sure that we’re giving them a lump sum cash benefit as well. First diagnosis, right? They submit that oncology report to the company, the company sends them a check—non-taxable, by the way—to help cover the costs and the deductibles that their insurance does not cover.
Zach: So, you know, talked about the dental, vision, and hearing—no real health questions. Who can buy cancer coverage? Are there, you know, there are health questions you have to go through for that?
Nick: There are health questions here, Zach. But another thing that I think it’s worth noticing is, you know, there’s been some major shifts in these cancer policies in our market over the last five years, right? So, as far as who can purchase these policies, right, you do not have to have Medicare to purchase a cancer or heart attack and stroke policy. And we can write those policies 18 to 89, right. And we can write them as an individual, individual and spouse, individual and children, or family, right?
But for the cancer policies, you have to qualify. And there’s differences there, right? Some states require you to be cancer-free for five years; some states require you to be cancer-free for ten years, and in between. But the good thing is unlike in the past where we had first occurrence policies, meaning if you had cancer in the past, even if you could qualify for the policy, it would not pay out for that particular cancer because it was not a first occurrence. You know, we’re happy to report that now we have multiple providers that will allow us to offer coverage, and as long as you can qualify, you can answer no to those health questions, whether it’s a reoccurrence of a past cancer or a new cancer, these policies will pay out in full.
Zach: Yep, yep. So, kind of wrapping it up here, you know, these cancer coverage, and you can add a heart attack and stroke rider on it that works the same way—first diagnosis—
Zach: They are a lump sum, non-taxable payouts that are geared towards non-medical expenses that your Medicare or your major medical may not cover for you.
Nick: Absolutely, yeah. And you know, it’s very, very important. You know, and our goal—a lot of times when people are coming out of the workforce, you know, the things they’re thinking about is health insurance, and that’s great. But our goal is not just to take care of one of our customers’ needs, right? And we know for those individuals that are being diagnosed with cancer, that are utilizing these services, these plans are a lifesaver. And they’re extremely affordable, right?
So, if you’re out there, you have cancer in your family, you’re worried about that’s something that may attack you—I mean, recent statistics, right? One in two men, one in three women are going to be diagnosed with cancer in their life. And couple that with a vast majority of cancers are diagnosed in individuals 55-plus, you know, hello, this is our market, right? This is the Medicare market. So, it’s certainly something that we want to be talking to people about, it’s certainly something that we want to be educating people about. Give us a call, 844-437-4253. We can tell you about these products, help you get them quickly, painless, and extremely inexpensive.
Zach: All right, Nick. So, the last big complementary product we deal with a lot in our market, asked a lot about is final expense life insurance.
Nick: It’s the one insurance product, Zach, you’re guaranteed to use, right?
Zach: Yep, sure is. Hundred percent. You know, so what exactly is final expense life insurance?
Nick: Well, it’s, you know, a common thing that people ask is, you know, “There are multiple types of life insurance, right?” And final expense life insurance typically is a product that was designed in smaller face amounts for the middle-aged to older-age crowd with the single purpose of covering final expenses. But it’s worth noting there are no strings attached. This is a non-taxable benefit, right? So, we get people that want to leave final expense policies as a final tithe to a church. We get people that want to leave final expense policies to children, we get people, you know, that want to list any type of beneficiary on these types of policies, and that’s fine, but ultimately, the policies were designed to cover the final expenses when ultimately that time comes for all of us.
Zach: Yep. And one of the things I think is big on these types of plans are they’re simple is the best way to put it. You answer your health questions yes-no; you don’t have to go to the doctor to have an exam. You don’t have a doctor come to you for an exam.
Nick: Yep. So, you know, and back to insurance-speak here, but you’re spot on, right? They call that ‘simplified issue,’ right? And the simplicity is there is no medical exams. There is no doctor’s appointments, right? We ask you health questions, company pulls your medical records and if they match, they issue the policy on sight, right?
Zach: And another big plus to this is how the rates work and how the benefit amount works on these plans.
Nick: Yeah. So, easiest said and best said is rates never go up. Coverage never goes down. But just to further that, you know, going back here, these policies are guaranteed renewable, right? Meaning, when you buy a final expense policy, the rate that you purchase your policy at, never goes up, right?
So, kicker here, buy it young, it’s a lot cheaper, right? But not only does your rate never go up, your coverage never goes down, right? So, we hear people coming out of the workforce, they’ve had term policies. And that was all well and good. Their goals when they purchased those policies were righteous.
But now when you’re coming out of the workforce, you know, you’re probably further along than life when you are when you were younger. You no longer have that need for those massive term policies, right? At this point in life, we’re just looking for something to cover the final expenses. And that’s where these products come in.
Zach: Yep. So, looking at it, do these types of plans even have waiting periods?
Nick: Yeah, so great question. So, you know, we write life insurance with a number of different providers, right, here, Zach. I mean, we’re a broker and we get the pleasure of working with a number of the nation’s top-rated carriers. But the easiest way to answer this question is yes/no, right? And what I mean by that is, your health—you being the insured’s—health dictates whether the policy has a waiting period, right? So, we have providers that have policies that have waiting periods, that don’t have waiting periods. You know, our goal is to get you a policy without a waiting period, but that’s all dependent on your health.
Zach: Yeah. So, kind of, who can, essentially, buy a final expense? I know, you touched on it a little bit, but who out there can buy a final expense policy?
Nick: So, for all of our providers, Zach, we can write final expense policies from the age of 40, right, all the way up to age 89, right, assuming you qualify for one of our health levels.
Zach: Yeah. And so, coming towards the end of it here, you know, one of the big things is, if you are on Medicare or a supplement, lot of the companies out there give you a discount if you—like they say on the commercials on TV—bundle them together.
Nick: Absolutely. So, you know, this is kind of new, right? I mean, one of our providers launched a new final expense product early last year, and basically what it allows us to do, if you are newly purchasing supplemental coverage with that provider and purchasing final expense coverage, at the same time, they will offer a 20% plus discount for purchasing the final expense, right? But even better, if you’re already on Medicare supplemental coverage with this company, we can still offer you that same discount. So, the way that I really want to look and what I want to tell people is, if you’re on a supplemental plan, right, and you’re considering life insurance, give us a call because there’s a phenomenal chance that we can save you money on your Medicare supplement, then we can turn around and pay for your final expense coverage with the savings on your supplement, right?
However, if you’re new to Medicare, you’re coming out of the workforce, you’re coming off group benefits, right, and you’re losing that health insurance and the life insurance, there’s no time like the present to buy those two products together. 20% is 20%, right?
Zach: Yep. So, wrapping up final expense there, you know, average funeral is roughly $15,000 as of 2022—
Nick: Going up, isn’t it?
Zach: Yep, every year. So, you know, these are a whole life insurance policy, like you said. Premium stays, never goes up, face-value never goes down, locks it in. So, the younger you are, the better off it is. But it will be a lump sum payout to whoever your beneficiary is when something does occur to you.
Nick: Absolutely. Yes, sir.
Zach: All right guys, so we’re going to wrap up this last episode here, where we’ve gone over the three main complementary products that we deal with on a daily basis that work along with Medicare, whether it be dental-vision-hearing, cancer coverage, or final expense life insurance.
Hope you guys found this episode informative, answered a lot of questions for you, may have been able to open your eyes to some other options out there for you. If you got any more questions, concerns, want to look into some options for you, we’d love to talk to you give us a shout 844-437-4253, or you can email us at email@example.com or firstname.lastname@example.org. And again guys, thanks for tuning in. Look forward to talking to you next time.
Nick: Take care.
Nick: Hello, and welcome to season two of Seniors Living Healthy, episode two. As always, I’m Nick. And I have Zach here with me.
Zach: How’s it going, folks?
Nick: In episode two, we are going to talk about the two different types of Medicare plans and how they work with Medicare. So Zach, fire away.
Zach: Good to be back for another episode here.
Zach: So, rolling in, you know, last episode we talked about the parts of Medicare. And as you remember, we discussed there are some gaps in those Medicare plans.
Zach: So, looking there at the first one, it covers what is called a Medicare Supplement. In the name itself it Supplements Medicare.
Zach: So, someone that’s wanting to look into one of these Nick, when can they go about getting one? What’s the steps to purchase one?
Nick: Yeah. So, for an individual looking to purchase a Medicare Supplemental plan, it’s important to remember, Zach, that Medicare Supplements do exactly what they say, right? They Supplement Medicare, right? So, Medicare is the primary, right, and the Supplement policy as the secondary. So, the easiest way to answer that question, Zach, is an individual has to have Medicare Parts A and B before they can buy a policy that Supplements Medicare.
Zach: Got you. So, you know, after they’ve sat down, talked with us, talk through and they decided a Medicare Supplement is the route I want to go, when can you purchase that coverage? When are they eligible?
Nick: Sure. So, there’s several different crowds here we want to talk about right, Zach? So, the first one would be those individuals new to Medicare, right, they’re in their initial enrollment period. So, for those individuals that are looking to go on Original Medicare A and B when they turn 65, the month of their 65th birthday, they can actually apply for a Medicare Supplement policy up to six-months in advance of the month of their 65th birthday, right? Now, this is what’s called the open enrollment period, right?
And it’s worth mentioning, for these individuals, they get that monopoly card, right, they get that get-out-of-jail-free card. So, a lot of times when people are purchasing Supplemental coverage, they have to go through underwriting, right, they have to answer health questions, they have to answer tobacco usage questions. Some companies use height-weight charts to rate them or decline them, et cetera. So, in that open enrollment, regardless of your health, you’re not going to be asked health questions; anybody qualifies. Regardless if you’re a tobacco user, you’re going to get a non-tobacco rate. Regardless of your height and/or weight, you’re going to get a standard rate.
Those individuals can choose any plan with an effective date concurrent or after their eligibility, meaning the month of their 65th birthday, right? Now, they also have up to six months after their 65th birthday to be able to purchase those plans under the same scenarios, right? Then, of course, you have those individuals that have been on Medicare for, you know, any given time. They’re out of that initial enrollment period; they can actually switch plans year-round on Supplemental coverage, right? But the kicker there is once you get out of that enroll open enrollment period, you do have to go through underwriting, you do have to answer those health questions, you do have to answer those tobacco usage questions, et cetera.
And it’s worth mentioning also, you know, don’t let that be a turn-off. You know, if you’re listening and you do have pre-existing medical issues, you’ve been declined before, that doesn’t necessarily mean you can’t get coverage now. That’s a phenomenal opportunity. Reach out to us. We’d love to ask you those questions and we’d love to see if we couldn’t help you out, right?
Zach: Yeah, definitely debunking a big theory there: you can’t get a Supplement except in annual enrollment period when you can actually get it—
Nick: Absolutely. That is—
Zach: —any time of the year—
Nick: —a hundred percent incorrect. Yep.
Zach: Yep. So, also kind of covering our bases, you know, we’ve been new to Medicare, someone currently on Supplement and wanting switch. We’ll touch on Advantage plans here a little bit, but what if someone is on a Medicare Advantage plan? Are they able to switch to a Supplement?
Nick: So, we’ve got two different paths here, right? Let’s go back to those new to Medicare people, right? So, when you are in your initial enrollment period, right, with those Medicare Advantage plans, you got a three-month window prior to your 65th birthday and you’ve got a three-month window post your 65th birthday. Beyond that, you know, you can kind of go back to our previous episode, we talk a little bit about the times those people can make changes, but just to reiterate, once you’re out of that initial enrollment period, you can only make changes October 15th through December 7th, right, coming back onto Original Medicare January 1st and put a Supplement plan in place, or for those individuals that are now beyond the Annual Election Period, they purchased a Medicare Advantage Plan, they can actually use the Medicare Advantage open enrollment period running January 1st to March 31St. To disenroll Medicare Advantage and go back on Medicare and get a Supplement, Zach.
Zach: Got you. So, now we know when you can get one, and we’ve mentioned before, you know, it is a Supplement, so it does Supplement Medicare. What exactly is it covering?
Nick: Yeah. So, you know, there are a number of different plans out there, Zach, right? You’ve got plan A, B, C, D, F, G, K, L, M, N. But the predominant amount of those plans that we see on a day-to-day basis, right, are going to be the F plan, the G plan and the N plan, right? So, what I want to do is focus a little bit more on those, you know, and realizing there are other plans. If you’re interested in a different plan, have questions, certainly, you know, feel free to reach out.
But for that F, G, and N plan, Zach, those Supplement plans are going to come in behind Medicare. And if you recall in last episode, or maybe the listeners do as well, you know, we talked about the cost associated with Part A right? We talked about that $1556 deductible that they’re paying when they go into the hospital. All three plans are covering that deductible. We talked about the $389 a day, day 61 through 90 in skilled facility care. All three plans are paying that.
We talked about $778 day 91 and beyond using those lifetime reserve days. It pays that, right? We talked about the $194.50 in skilled facility care that the insured is responsible day 21 through 100. Those plans pay that. So, very simply, between Medicare and those common plans, it offers one hundred percent hospitalization, right, regardless of how long you’re in there, what happens while you’re in there, how frequent you go in there, still going to give you one hundred percent coverage, right?
And then of course, on the outpatient side, the Part B side, you know, we recall that Medicare is an 80/20 coinsurance, right, so Medicare is always going to pay their 80% and then, of course, the Supplement pays the remaining 20%, right? The only difference being is you know, obviously plan G and plan N don’t cover that Part B deductible, which is $233 in the year 2022. And then, of course, plan N also has those $20 copays at the doctor and $50 at the ER if the individual is not admitted.
Zach: Yep. And something else to point out about Supplements that are a big question we get asked a lot are, you know, networks.
Zach: You know, do I have to call my doctor when I’m signing up for Supplement? Do I have to make sure oh, they take company X?
Nick: Yeah. So, you know, we—and we get that, Zach, because, you know, if you think about our market coming out of the workplace, they’ve been on group insurance, right? They’ve had plans, they’ve had networks, et cetera, so they’ve kind of been psychologically indoctrine to ask, do you accept my insurance company, right? But you know, what we try to explain to people is it’s a fundamental shift, right? Medicare is the primary when you have Supplemental insurance.
The Supplement is the secondary, so whatever Medicare pays first on and its leftover, that’s the Supplement’s job, and it’s going to pay. So, you know, the question isn’t, “Does my doctor accept company X? Does my hospital accept company X?” The question is, do they accept Medicare? Because as long as they accept Medicare, regardless of what provider, regardless of what plan they choose to go with, that’s going to be accepted as well.
Zach: Got you there. So, you know, you kind of touched on it briefly, you know, plans are standardized, so everybody’s plan N, plan G, plan F is going to be the same across the board.
Zach: Another big question we get asked a lot is, can it be canceled, you know? If I sign up in open enrollment, they don’t ask me health questions, I get out of that open enrollment period and I do have a pre-existing condition. Can that affect me?
Nick: Yes. So, let’s use some insurance-speak here, right? Guaranteed renewability is what the insurance companies and the brochures say. But you know, basically, all that means is when you have a policy that’s guaranteed renewable, it means it cannot be canceled for any reason other than non-payment, right? So, if you’re that individual that gets in under open enrollment, maybe you’re currently being treated for cancer, right?
Just because you have a higher level of claims this year, next year, whenever, than the rest on aggregate in your pool, they cannot cancel you, but more importantly, Zach, they cannot charge you any more than everybody else in your zip code, your gender, and your age, right? So, not only can you not be canceled for higher-level claims, you can’t be singled out for higher prices as well. So, that’s good to know for those people that say, “Hey, I’m coming on to this and I’ve got some challenges. I’ve got some issues. I’ve got some pre-existing conditions, what’s going to happen when I have to use this? Can they cancel me?” And the question is no, they cannot.
Zach: Yeah. So, looking there at it, you know, we do have a lot of couples that go on Medicare at the same time, so looking there at it, you know, we do have companies that offer household discounts, whether you’re both on the same company, or you can live with somebody. Most companies are age 60 or older, but we do have some companies out there, they are at age if you live with anybody. So, that does another way to kind of save some on a premium there—
Nick: Yeah those—
Zach: —with a Supplement.
Nick: And you know, Zach, those discounts go anywhere from 5 to 14%. So, you know, if you live with anybody, regardless of their age and whether they’re Medicare eligible or not—you know, we’re going to ask you that question, if you call, but keep us honest. Let us know because that could save you 14% a month simply living. It could be a grandchild, it could be a sister or brother, it could be a spouse, whatever. You know, as long as you live with them, you can get that discount.
Zach: So, you know, we also talked about plans being standardized. Plan N and G nowadays are your most common.
Zach: Plan F used to be very common. There’s a lot of myths—the best way to put it—out there about them. Do you want to debunk all those here real quick?
Nick: Here we are, [Mister Debunk 00:11:29], right?
Nick: No, you know, he a couple years ago, when they made the [unintelligible 00:11:33], you know, changes to Medicare. You know, basically what they were doing is they were trying to eliminate the opportunity to purchase a plan that covered the Part B deductible, that outpatient $233 deductible, and they succeeded. But the caveat that isn’t broadcast, the caveat that isn’t out there because those plans are guaranteed renewable, all of those people that had those plans—plan F, plan C, the two that cover that Part B deductible—can still keep those plans. And because they can still keep those plans, they can still purchase those plans. So, very simple: for individuals, regardless of age, that were first eligible for Medicare, prior to January 1st, 2020 can purchase, keep, or switch F and C.
It’s only those individuals that were first Medicare eligible after January 1st, 2020, they can no longer purchase those plans. And I want to give a quick thing here, Zach. The number one people that we are saving the most money on are those individuals that have been on plan Fs for five years plus. If you’re out there listening and you’ve been on a plan F for a number of years, you’ve watched your premium go up, no doubt.
I’ll challenge you. Give us a call and you’ll be shocked at the amount of money you can save switching. And remember, Zach, since those plans are standardized, you know, the only two things that are going to change for these individuals switching is the name on their insurance card and the premium they’re paying each month. The benefits they’re receiving don’t change. You know, we have times that we cut people’s premiums in half, sometimes more for those individuals that are on those F plans. Call, let’s see what their savings can be today.
Zach: Yep. So, wrapping up, Medicare Supplement there, you know, as a whole name themself, they do Supplement Medicare. So, they’re going to take care, in most cases, that $1,500 deductible on your Part A. They’re also going to take care of that 20% of your Part B. Again, no networks; as long as the doctor, hospital, whoever takes Medicare, they’re going to take the Supplement, no matter who it is. And again, you can change at any time of the year. You don’t have to wait till that October 15th deadline—
Zach: —to make those changes.
Nick: And one thing to mention here, too, guys is… you know, we get a lot of phone calls, we get a lot of requests for information, and people will say, “Hey, my neighbor, my cousin, my spouse—whoever—has this plan. I want this plan.” One thing we want people to focus on is Supplemental coverage is different from plan to plan. And just because what’s best for you doesn’t mean it’s what’s best for me, right? So, if you have questions, if you’re wondering what plan is best for you, you know, our job is to ask those difficult questions. We’re going to ask those questions to determine and we’ll help you, right? Ultimately it’s their choice, but we certainly want to be the best help we can be, right?
Zach: All right, so just kind of moving on along down the line here. The next one is Medicare Advantage plans.
Zach: See a lot of those on TV, radio, especially in October, those times a year. So, how does a Medicare Advantage plan work with Medicare?
Nick: Yeah. So, you know, we get asked this question quite frequently, and you know, the easiest way to answer that is it doesn’t, right? I mean, so a Medicare Advantage plan—and if you listened to our last episode, you noticed that we skipped Part C, right? We did A, B, and D. And the reason for that is Part C of Medicare is Medicare Advantage, right?
And with Medicare Advantage, it actually replaces your Part A and B of Medicare. So, it’s worth mentioning, you have to have Part A and B, to purchase a Medicare Advantage plan. But ultimately, it is going to replace your Medicare, therefore you no longer have access to Medicare’s nationwide network. It just kind of ceases to exist, right?
Zach: Yep. Yep. So no, since it does take away A and B, are there, you know—are you tied down to where you have to go with it?
Nick: Absolutely, yeah. So, you know, when you’re purchasing a Medicare Advantage plan, what you’re really doing is you’re replacing that A and B of Medicare, and you know, every Medicare Advantage plan has to offer benefits, at least equivalent to Original Medicare. But what you’re doing is you’re taking your benefits out of Medicare and you’re putting them with a private carrier, right? I mean, everybody gets the solicitations, emails, phone calls, you know, commercials, the whole nine, direct mail pieces, et cetera, you know? So, we know that providers, right?
But when you go with UnitedHealthcare, when you go with Humana, when you go with Blue Cross Blue Shield, when you go with Cigna, when you go with all of these company’s Medicare Advantage plans, they have networks associated with them. Now, some plans have more restrictive networks than others, right? But ultimately, yes, you’re always going to have a network when you’re on a Medicare Advantage plan, at least their traditional ones, the HMOs and the PPO, right?
Zach: Yep. So, then also kind of talking generically because we can’t go into plan specifics on things, and there are a lot of Advantage plans out there in the area, so just kind of generally speaking, when you’re comparing Medicare Advantage plans, what are the differences in them? What are the different ones out there?
Nick: Yeah. So, I mean, the obvious answers here, Zach, are the costs, right? Whether it’s a zero premium or a higher premium, the network accessibility, right? Is it an HMO? Do you have to have a primary care doctor to gatekeep all of your care, right, where you know, you can only go to your primary care physician, and to see a specialist or go out of network, they have to give you a referral, right?
Or maybe you’re on a PPO where you don’t have to have that primary care physician requirement, but to get the lowest and best costs, you still have to stay in-network, right? So, it really doesn’t matter, you know, what you’re talking about when it comes to network accessibility. They’re always going to be there, right?
Zach: So, you’re looking there at it, are they guaranteed renewable like a Supplement? So, if you’re on an Advantage plan, does it roll over every year, or do I have to make a change?
Nick: Yeah, so let’s kind of go two different ways here. First, the plans aren’t guaranteed renewable in the sense that a provider—be it a doctor or a facility—has the choice on an annual basis to withdraw from that network. And quite frankly, we get that phone call quite frequently, the first of every year. “Hey, what options do I have? You know, I was on X company and my doctor no longer participates,” right?
But more importantly, as well, on an annual basis, these companies can actually choose to completely discontinue a plan and/or pull out of the service area altogether, right? So, there is no guarantee that the plan you’re on is going to exist next year, and there is no guarantee that the doctors or facilities you’re using this year are going to be with the plan next year. However, assuming those two things don’t happen, if you are on a plan and it is still available, it will roll over into the next year. There is no need to re-enroll.
Zach: So, what are some costs associated with an Advantage plan: co-pays deductibles, things like that.
Nick: Yeah. So immediately, you know, some plans have premiums. Some don’t. Some plans have drug premiums, some don’t, right? All plans—for the most Part—are going to have Part A cost in the hospital. All plans for the most Part are going to have what we call a MOOP, right—more insurance-speak—which stands for maximum out-of-pocket expense, people coming off group insurance may know that as a major medical deductible, right? You’re going to have all of those type things. You’re also going to have a coinsurance on your outpatient care until you reach that maximum out-of-pocket till you reach that major medical deductible. So, common things are going to be premiums, co-pays, deductibles, or maximum out-of-pockets.
Zach: So, you know, another thing you see a lot with some Advantage plans is having to have referrals. And so, can that cause you to have restricted access to doctors and/or facilities?
Nick: So, Zach, we use this example all the time, and you probably already know where I’m going with this before I do it. But the example we give on network restrictions is MD Anderson, right? MD Anderson, Houston, Texas. Anybody’s ever been to that facility—I have—it’s nicer than most hotels you go to, okay? So, you can imagine it’s not cheap, right?
And facilities like that don’t want to take discounted payments, right? Now, that doesn’t mean that your plan doesn’t participate there. Some do, but the example that we give clients if you live in wherever, do you want to go to your cancer doctor that has an X cure rate, or do you want to go and have access to go to the best and the brightest, right? Whether we’re talking Emory Hospital in Atlanta, Mayo Clinic in Boston, MD Anderson in Houston, if you’re on Medicare and have a Supplement, walk right in. The challenge is, when you’re on those Medicare Advantage plans, those facilities may not participate in your network, regardless of the type of Medicare Advantage plan you’re on. So yes, we always tell people that Medicare Advantage plans are restrictive and their access to the best and the brightest.
Zach: Also, so you’ve touched on it briefly; so with a Medicare Advantage plan, what are some of the additional benefits added to it, you know, including prescription coverage, if possible?
Nick: Yeah. So, just to recap here and build, Zach, you know, Medicare Advantage plans when you’re replacing Medicare, they have to offer benefits, at least equivalent to Medicare, but what we’ve seen over the last few years is a lot of these companies and a lot of these plans are, like, piling on additional benefits, right? And they’re becoming quite common, you know, they’re becoming quite liked in the Medicare community. So, some of those additional benefits that you see are the holy grail, right: Dental and Vision. Medicare and Medicare Supplements don’t cover dental and vision.
Some of them are covering over-the-counter benefits, right? They’re getting a monthly or a quarterly benefit to spend at the drugstore on things like Band-Aids, alcohol, Tylenol, things like that. You see some that are offering transportation, right? Some plans, one that we looked at the other day, offered 21 round trips, for transportation per year, right? We’re seeing all kinds of additional benefits and feel free to throw any in here, Zach, if you’re thinking of some I’m not. But basically, these are benefits that Medicare doesn’t offer that the provider has the option to offer, though they don’t have to.
Zach: So, before we, kind of, move to the next step there, million-dollar question. If you’re on an Advantage plan, you still paying that Part B premium?
Nick: Absolutely, Zach. So remember, you have to have Part B to replace it. And to replace it, you still have that cost, right? And the standard premium is $170.10 for 2020. Remember those Medicare Savings Programs—some people pay less with ARMA, some people pay more, but absolutely, there is no way to get away from that costs, just because you have a Medicare Advantage plan.
Zach: Yep. So, staying with Advantage plans, I’m going to kind of switch gears a little bit. We’ve been discussing what Advantage plans are in a nutshell. So, just kind of who can purchase a Medicare Advantage plan?
Nick: Yes. So, this is very simple, Zach. So, individuals that have A and B of Medicare that reside in the plan service area that have a valid election period, be at an initial enrollment period, annual enrollment period, Medicare Advantage open enrollment, or a special enrollment period can purchase MA coverage.
Zach: So, if you are getting ready to turn 65, getting ready to go on Medicare, what’s your timeframe to look for Advantage?
Nick: Yeah, so your initial enrollment period for Medicare Advantage plan, Zach, is going to be three months before your effective date, the month of, and three months after your Medicare effective date, right? So, just to give an example, if you’re an individual that’s turning 65 next month, right, you have the month of May, three months prior and three months after May to put in a Medicare Advantage plan under your initial enrollment period.
Zach: So, you know, if you’re not new to Medicare, you’ve been on Medicare for a few years, that is where you see all the commercials October 15th through December 7th, annual enrollment period. That’s the most common time, say, to make changes to your Advantage plan. But there are some other opportunities out there throughout the year.
Nick: Absolutely. Yep. So, you know, just kind of recap in here, that Medicare Advantage open enrollment period, right, those individuals can only make changes if they’re currently on a Medicare Advantage plan, right? So, you have to have one to use that election period. But if you’re currently a Medicare election—or excuse me a Medicare Advantage plan during the MAOAP—or Medicare Advantage Open Enrollment Period—you can make one change to another Medicare Advantage plan or you can disenroll that Medicare Advantage coming back to Original Medicare.
Zach: And so, before we kind of wrap up Medicare Advantage plan, something else want to touch on is something we focus on a lot for veterans. There are plans out there, Medicare Advantage plans that don’t have drug coverage because they can go to the VA for those plans.
Nick: Sure. Sure. So, you know, basically what we’re looking at, you know—and we see this quite frequently—you know, Humana has the Honor Plan. Wellcare has the Patriot Plan, et cetera—these plans are designed specifically for individuals that have credible drug coverage, right?
Almost all of them are MA only, meaning they’re Medicare Advantage with no PD prescription drug portion. And if you recall, if you have Medicare and don’t have credible drug coverage, you’re going to be penalized. So typically, these types of plans are for individuals that are veterans, I.e. Honor, Patriot, things like that.
They actually don’t offer drug coverage because they allow them to use the VA to fill their prescriptions, but by not offering that benefit, a lot of times they’re bulking up or adding additional benefits elsewhere, so what we see a lot of times is we see individuals that are using the VA as their health care, that are using the VA to fill their scripts, but they’re purchasing the MA, which almost always has a zero premium to get those added benefits, right? So, if you’re a veteran, you’re using VA, you’re using it for your health care, for your drug coverage, maybe you’re needing dental coverage, maybe you’re needing some additional coverage, these plans are great options because you can lean on them for those additional benefits, right?
Zach: Yep. So, to kind of wrap up Medicare Advantage plan, they replace A and B of Medicare. So, they’re going to have some similar gaps in Medicare, but they’re going to have added benefit—albeit dental, vision, hearing, you know, drug coverage, things such as that—and they vary by network; that’s something definitely you need reach out to us, you know, local agent, whoever, to get an idea of what plan works best for you in your area because they do vary by the area.
Nick: Yeah, yeah. And it’s worth mentioning here, Zach, you know, as we wrap up here, there’s advantages to getting drug coverage with your Medicare Advantage plan and there’s disadvantages, right? And one thing that we like to point out is, when you buy an HMO, when you buy a PPO, they either come with drug coverage or they don’t, right? You can get an MA-only, HMO, PPO or an MAPD HMO or PPO. If you’re buying an MA only that doesn’t come with drug coverage, you cannot purchase standalone drug coverage in conjunction with those plans, right?
And consequently, if you’re buying an MAPD, right, that comes with drug coverage, you have to take the drug plan that comes with it, whether it covers all of your drugs or not, right? So, we certainly want to encourage people, if you’re considering Medicare Advantage coverage, check those prescriptions and make sure they’re covered. If you’re considering Medicare Advantage, make sure the pharmacy you use is a preferred pharmacy, make sure you’re getting the best costs associated, right? And then of course, if you’re thinking about choosing a Medicare Advantage plan, you want to make sure that everything you’re needing is covered on that plan, right? And you know, that’s what we’re for. If you’re out there looking at these plans, have questions. Maybe you’re on a current plan, don’t know if there’s something better out there, right, reach out to us: 844-437-4253. We would love to help.
Zach: All right, so we’ve gone through the basics of Supplement and Advantage plans. Now, to kind of put a nice little bow on it before we wrap up this episode are we’re going to look at the pros and cons of the two, kind of do a cost-benefit analysis, essentially, to see, maybe help some people answer some questions if they’re leaning one way or the other. So, I mean, you know, basically, Nick, what are the pros and cons of these, of a Supplement?
Nick: Well, let’s start with Medicare Supplements, and then we’ll go to Medicare Advantage plans. You know, comprehensive-wise what coverage is best? Medicare Supplements, right? It’s paying what Medicare doesn’t. The only con to Supplemental coverage would be cost, right?
It’s cost-prohibitive for some people. You know, as far as the benefits to Supplemental coverage: a, open access, you still have Medicare’s in-network nationwide, regardless of where you’re at; it pays in addition to, Medicare pays, Medicare Supplement pays the rest, right? So, you know, you’re getting better access, open access, and more paid, right, that would be the pros to Supplements.
And then of course, conversely, the cons to Medicare Advantage are really inverted, right? So, the cons to Medicare Advantage plans are restrictions or access to the best and the brightest. The cons would be out-of-pocket costs in the form of those co-pays, in the forms of those deductibles, right? The cons would be, you’re stuck. You can only make changes at certain times of the year, right?
So, one of the things that we like to tell people—and look, we get it—everybody wants to Supplement coverage for the Medicare Advantage cost. And unfortunately, that does not exist or it would put both products out of the market, right? So, it’s very simple. You can buy a plan that pays your bills, the price is the same every month, it’s budgetable. Not only are you buying those claims being paid, you’re buying peace of mind, you’re buying a product, knowing regardless of what happens to you, what level of care you need, you’re covered. That’s Medicare Supplements.
Or do you say, “I’m the individual, I don’t want to pay anything, I don’t want a monthly premium, and if I get a bill, I’ll deal with it.” Right? So, what we like to tell people you can pay upfront, or you can pay on the back-end, but it’s a heck of a lot cheaper to pay upfront than it is to pay those 20% and those maximum out-of-pockets these types of plans have.
Zach: Yep. So, just kind of wrapping up episode here. You know, broke down Supplements and Advantage plans; obviously pros and cons to both. We would be more than happy to talk to you about those, whether it be you know, give us a call at 844-437-4253 or reach out to our email, email@example.com or firstname.lastname@example.org. We’d be more than happy to go more in-depth in those plans for you, explain a little more.
You know, no matter where you’re listening to this at, you know, we’re licensed in 37-plus states, so odds are, we can help you and be more than happy to. So again, you know, thanks for tuning in and listening to us. Hope we answered some questions for you cleared some things up. But as always, thanks for listening and we’ll catch you guys next time.
Announcer: Welcome to our fireside chat with Seniors Living Healthy, the podcast that helps prepare and educate you as you enter and live out your golden years. With over 10 years of experience, Nick and Zach are experts in the senior market and are here to help you live a healthy, full life. And now fireside with your hosts, Nick Keene, and Zach Haire.
Zach: Hello, and welcome back to episode six of season one of Seniors Living Healthy. I’m joined here as always with Nick.
Nick: Hello, folks.
Zach: So, this episode, we’re going to wrap up what we’ve covered the first five episodes this season, touch base over what we have talked about, do a little refresher, review course. And then we’re going to look into what next season is going to bring, and that’s where our guest, Ty Wooldridge, President of Aetna Senior Supplements, will come in. We interview him, kind of looking forward to financial security once you do retire. So, as we just jump in here, we’re going to talk about the parts of Medicare and the different things out there that can fill in those gaps in Medicare. Nick’s going to run through those for us.
I’ll ask him some questions, he’ll just review them real quick to make sure everybody’s up to speed if you’re just now joining us, you’ll know we’ve touched on the last five episodes. So, Nick, as you know, we’ve been discussing the parts of Medicare this past season.
Zach: So, real quick, let’s start out with Part A of Medicare, give the listeners a run-through on that.
Nick: Yeah, so I want to start out real quick with the Part A and Part B, Zach, about who qualifies, when they qualify, and when they get it. So, individuals that have worked 40 quarters or 10 years and paid into Medicare, [unintelligible 00:01:45] payroll taxes mainly, qualify for Medicare, including any dependents and or spouses of those individuals. And other individuals, whether it be through disability, in limited circumstances regardless of age, or end-stage renal disease, or ALS can qualify as well, Zach. So, back to Part A, your question. Part A is hospitalization.
Anytime an individual is admitted to the hospital, they are covered under Part A and a couple things to remember under Part A is there is a period of care: that is 60 days, and that is covered with a $14058 deductible in the year 2021. So, beyond that, there are additional day costs, day 61 through 90 in the period of care $371, and then 91 through 150, they’re responsible for approximately $742 per day. The other thing that we’re seeing more in this market as it regards to Part A, Zach, is skilled facility care. I know you and I talk with clients about this quite frequently. But skilled facility care comes in a lot when people have to go to rehabilitation facilities, whether it’s following a stroke or some sort of debilitative condition.
And if they are in the hospital for three or more days, and released, and admitted to a skilled facility within 30 days, Medicare will pay day 1 through 20, and then they’re responsible for day 21 through 100 at approximately $185 per day. And that pretty much rounds out Part A, Zach.
Zach: Great. So, real quick on Part A, circling back there talking about the days in the hospital, the window of care, we know it’s a 60-day window of care. Kind of, explain how that resets, how that works.
Nick: So, a period of care ends when an individual goes 60 days without care in the hospital or surrounding arena. So, not to be confused with the first 60 days period of care that’s covered under the Part A deductible, but also beyond that going 60 days without additional care.
Zach: Great, perfect. So, rolling in there. Next part is our Part B of Medicare, which is a lot more in play than Part A does.
Nick: Absolutely. So, Part A is paid in typically via payroll contributions, 10 years or 40 quarters, and there is no premium. With Part B there is a standard premium and in the year 2021, that premium is $148.50 per month. There is something called IRMAA, Zach, that can allow people to either pay less for their premium or more, depending on their income.
Your Part B is elective. So, whereas Part A is automatic, there are plenty of individuals that are still working when they turn 65. They may have insurance through their retirement, through their union; that’s considered credible coverage, so it’s certainly elective. Reach out to us, reach out to someone to answer your questions about what may work or what may not work in that regard. But if someone does elect to take Part B, they can expect to pay a premium typically. And Medicare Part B has an 80/20 coinsurance: Medicare pays 80% of all outpatient claims, and the insured is responsible for the remaining 20% after a $203 outpatient deductible.
Zach: So, a little trivia question for you, Nick. We get asked this all the time: Part A or Part B; which one pays for the shingles shot?
Nick: Shingles. That’s a good question. Shingles is covered under the Part D. Your flu shot is the common shot covered under Part B.
Zach: All right. There you go. So, leading into that, like Nick just said, your Part D of Medicare. That’s probably our number one complaint—
Nick: [laugh]. Yeah. Absolutely.
Zach: —that we get because our hands are pretty tied on that. Kind of want to touch base on those there, Nick?
Nick: Yeah, so one of the biggest challenges that we run into Part D, Zach, is they’re regulated. You can only make changes, typically October 15th through December 7th outside of your open enrollment or new to Medicare phase. And with effective dates taking effect 1/1. And outside of limited instances, people are locked into those plans, January 1st through December 31st. And people’s medications have a way of changing.
A lot of times we get individuals that we run a drug plan, it seems like a perfect fit. Things arise, health conditions arise, new medications come into the picture, and we get phone calls, “Oh, this medication costs $100 a month,” or whatever that is, the important thing to remember folks is prescription drug plans all have to meet a minimum benefit that Medicare determines, okay? And what that means is they have to cover at least two drugs in every therapeutic class. However, some drug plans may cover different drugs in those therapeutic classes. So it’s important that you reach out to a professional, reach out to us, let us look into the options.
Let us get a list of your scripts, your dosages, the frequencies you’re taking them, let us make sure that we get you with a preferred pharmacy that’s going to offer you the lowest cost for your drugs. All of those things are important when it comes to picking a drug plan. And keep in mind, Zach, just to circle back, with Part D and Part B, if a Medicare-eligible enrollee doesn’t have credible outpatient or Part B coverage or Part D drug coverage, they can be penalized by Medicare.
Zach: Yeah, they’ll get their part, cut one way or the other, that’s for sure. So, one more thing I want to touch on Part D of Medicare, we get questions all the time, the dreaded doughnut hole. Do you want to touch on that real quick?
Nick: Just to build up to the doughnut hole real quick, Zach. There’s four phases in a drug plan: the deductible, the initial phase, the doughnut hole, and the catastrophic phase. And one of the things to keep in mind is, it’s dollar amount thresholds that move from one portion or phase of the drug plan into another. So, when an individual and the insurance company reach a combined out of pocket total of approximately $4100, they enter into the doughnut hole, in 2021. And once they enter into that doughnut hole, then it’s an approximate combined total of $10,000 that has to be spent between the insured, the insurance company, and the drug manufacturer before they get out of that gap.
So it’s an approximate $6,000 gap that individuals can be responsible for a high portion of cost of certain drugs. So, we get a lot of complaints: “I had flat copays on my drugs. All of a sudden, I hit the doughnut hole, and now I’m paying 40-some percent,” or whatever it may be of that prescription. One thing to know, folks, is all drug plans are built with a doughnut hole. The only difference being is some plans offer additional coverage within the doughnut hole. But of course, that’s at an additional cost.
Zach: Definitely. So, as we’ve seen there, there are some gaps in especially your A and B of Medicare. We do work mainly here a lot of times in ways to fill in those gaps. And we’ve touched on those as well. And the two different ones. The first one is the Medicare Advantage Plan. And, Nick, discuss how that doesn’t really fill in the gaps. What is an Advantage Plan on the surface before we dig into it?
Nick: Yeah, and one of the things to keep in mind about these products is as we go through the Medicare Supplements and the Medicare Advantages: there’s pros and cons to both products, and one product doesn’t fit everybody’s needs. That’s where a professional needs to ask you the right questions. How often are you using your healthcare? How often are you going to the doctor? Do you have any pre-existing conditions, et cetera?
But one of the things that Medicare Advantage Plans do, Zach, and I think is what you’re alluding to, is they actually replace an individual’s Part A and Part B of Medicare. So, it can create some network limitations. Medicare is nationwide: California, North Carolina, Michigan to Florida, whereas those MAPDs—or Medicare Advantage Plans—have networks associated with them.
Zach: Since it does replace the A and B, they have to be similar where you to go in the hospital. I know, like I said, plans vary a little bit. You’re on a Medicare Advantage Plan; you go in the hospital. What kind of expenses should you be looking at to incur?
Nick: Yeah, so on original Medicare, you have that $14058 deductible that covers your initial period of care. So, Medicare Advantage Plans do something similar—and keep in mind, they’re all different, so I’m just going to talk in broad terms—but typically your Medicare Advantage Plans are going to have per-day cost when you go into the hospital, whether that’s a day one through three, day one through five, day one through six, there’s going to be something similar or equivalent to the Part A deductible of original Medicare.
Zach: Great. So you’re talking about the networks and everything there. There are a couple of different types of plans out there, I know when it comes to HMO and PPO; those are the two biggest ones we see. Kind of give a quick run-through, if you don’t mind, the difference in the two of them.
Nick: Sure. So HMOs, in our business, we know is the gatekeeper policy. Everybody that takes their state license test, regardless of where you take it, you get the gatekeeper question. What that is, is an HMO is a type of policy that is designed to be administered solely through the primary care physician. Any healthcare an individual gets, they have to go through the primary care.
And to see a specialist or go out of network, they have to get a referral. That’s the gatekeeper giving that pass, that referral. Whereas an HMO is a little different, Zach. And by the way, the HMOs are smaller, typically, in-network; they’re for individuals, certainly, that don’t travel much, as they don’t have much out-of-network coverage short of emergency care. PPO—Preferred Provider Organization—policies don’t require a referral.
And what that means is an individual can get care in-network or out-of-network, albeit at a higher cost, so it gives them a little less restriction, and moving about, and traveling, and not having to be near their primary care physician.
Zach: Gotcha there. There looking at Advantage Plans, just from what we know about them, a lot of times they are zero premium. There are ones out there that have premiums. But I think you’d agree, Nick, a lot of times with an Advantage Plan, you’re looking at paying less than the front end where you might possibly with copays and deductibles on the back end see a bill.
Nick: Oh, absolutely. I mean, there’s—look, there’s no perfect way to go about this. You either pay on the back-end when you use it or you pay upfront, and kind of go from there, right?
Zach: Yep, so next, moving in with that is the Medicare Supplement. And in the name itself, it supplements Medicare. So, looking at it there, Nick, give a rundown of Supplements, what someone should be looking for, in there in the Supplement market?
Nick: Absolutely. So, I think you said it all up front, Zach. It supplements Medicare. What does that mean? Medicare remains the insured or the client’s primary, which gives them access to doctors, facilities nationwide.
And the good thing to know about a Medicare Supplement, whereas a Medicare Advantage Plan replaces Medicare, a Medicare Supplement falls in behind Medicare. Medicare still pays primary, Medicare is accepted almost nationwide, anywhere we go. Rarely ever do we run into a doctor or facility that doesn’t accept Medicare. And the good thing to know about the Medicare Supplements is regardless of what company or plan you go with, as long as the facility, the hospital takes Medicare, they’ll accept any company’s Medicare Supplement policy. So, with that, Zach, I mean, there’s a number of different plans.
I’m not going to go into all of the different ones, but it’s one of those things where once again, we need to be asking the health utilization questions. How often are people going to the doctor? Do they have any pre-existing conditions? Are they looking for a plan that pays everything regardless of the cost, or are they more motivated by savings opportunities, maybe being willing to take on a small deductible or take on a small copay each time they go to the doctor? So there’s multiple common plans, and not one is best for everybody. That’s where our questions come in. That’s where we come in.
Zach: Yep. So I’m looking there, putting the two together. If I’m getting ready to go onto Medicare and looking at the two or say I’ve been on Medicare for a few years, made some changes, how does my health play into this?
Nick: Yeah. So, with Medicare Advantage Plans, there are no health questions. Basically, if you reside or live in the plan service area, and you have Part A and B, you qualify for any Medicare Advantage Plan at any age. Medicare Supplements are a little different. Outside of select periods, being the open enrollment period and guaranteed issue periods where an individual would lose credible coverage through no fault of their own, all of your supplement companies—in most states; the standardized states at least—are going to have health questions.
Now, some companies are going to be harder to qualify; for some companies, not so much. But the good thing about health questions, especially for healthy people is the more nos you can give me, the cheaper your price goes. So, health plays a big part in the Medicare Supplement market, and that’s why it’s so important, Zach, for individuals that are new to Medicare to think about this up front because if they have some of those chronic conditions that we see all the time in our market, it’s a get out of jail free card, they qualify for anybody. So, if you’re new to Medicare, about to be turning 65, or about to take on Part B of Medicare, you’re in a select window that is your time to shine. Reach out, give us a call, talk with us, let us ask some questions, and let us make sure that we set you on the best track forward moving into Medicare eligibility.
Zach: That’s another big thing, too we haven’t touched on yet are Supplement Plans. There’s a lot of plans out there using Plan G, for example, plans themselves are standardized.
Zach: So, real quick here at Senior Benefit, if you touch on what we do, if you’re already on a Supplement with those plans being standardized, what we can do for you.
Nick: Absolutely. And later on in this podcast, I’m looking so forward to speaking with Ty Wooldridge at Aetna Senior Supplements; this is what they do. But as a broker here, not only do we work with Aetna, not only do we work with all of these A-rated providers, when it comes to Supplements, they all offer the same products. They just have different qualifications, maybe different prices, some companies may offer a household discount, others may not. So, our job is to find the individual the plan that best fits their needs and then the lowest price. So, working with all of these major providers, not only do we have the opportunity to give folks impartial advice about what plan is best for them, then we also have the ability to give them that plan at the best price out there.
Zach: Yep, definitely. Last one here on that note, we get asked this a lot: can you have a Supplement and an Advantage Plan?
Nick: Technically no, Zach. When you have a Medicare Advantage Plan, you replace your Medicare. So you’re on a Medicare Advantage Plan, not quote-unquote, “Parts A and B of Medicare.” That fundamentally runs against everything a Medicare Supplement is. To supplement Medicare, you have to be on Medicare.
So, by definition, you can technically have a Medicare Supplement and Medicare Advantage, but the Supplement’s not going to pay anything. Because Medicare’s not paying primarily, therefore the Supplement won’t pay secondarily.
Zach: Yep. Thanks, Nick, for kind of running through everything we’ve covered there the last five episodes. Hope it caught you guys up or maybe cleared some things up, answered more questions for you. So, now we look forward to jumping on a phone call here with Ty Wooldridge.
Zach: All right guys, and welcome back. So, for our next segment here, is our interview section. So we’re going to have Ty Wooldridge from Aetna Senior Supplement jump on the line here with this. He’s actually the president of the Senior Supplement side of Aetna. Ty, how are you doing today?
Ty: I’m doing well. And I certainly appreciate you guys having me on today. And absolutely glad to do it.
Nick: Thanks, Ty, we appreciate you joining us.
Zach: Glad to have you on. We know you’ve been working this market for a very, very long time, so as we look forward to our next season on the podcast, where we’re going to be looking at people getting ready to retire and make sure they have that financial security once they get to that point in life. And we just wanted to run some questions by you, let you help some people out in that area. And I know you just joined that market here recently yourself. [laugh].
Ty: Yeah, that’s right. Yeah, I recently turned 60. So, a lot of what I’ll talk to you about is really based on my own experiences. I’m going through this in real-time.
Zach: Yeah, perfect, perfect. So, first up their Ty, if you don’t mind, share with us the importance of financial planning moving into retirement?
Ty: Well, sure. And honestly, even before you get to be my age, really, the importance of financial planning starts as early as possible. And you guys probably remember, my background was in actuarial science, and I can tell you that the time value of money is an important ally when you’re retiring. If you just took $50 a week, and you invest in that, even at a really low rate, like 4% which, as an average rate for 40 years, which is fairly low, you have a quarter-million dollars by the time you’re 40 years out. So, really the most important thing is you absolutely want to start; it is never too early to start.
But as you near retirement, what you have to understand is, you move away from putting money away and taking care of that, you switch into an era where your money is now going to take care of you. It’s going to switch direction. And as you near that retirement, it’s important to ask yourself a lot of questions; get some help. You really have to plan this; you have to think about how much money do you need? How healthy are you?
Because that can matter some of the decisions you have to make. What restrictions are there on how or when you can access the money that you’ve set aside? Are you planning to continue to work? How long do you think you will live? How much other income do you plan to have? Those are things you absolutely have to think about.
But even more important than that, when you get into this area, kind of, where I’m in here, you start thinking about all this money changing directions and taking care of you, got to think about the impact of taxation. And that’s where you really need to do some planning. How you move money from wherever you’ve got it stashed to the distribution phase of your life can matter a great deal on how much you’re going to lose in taxes. It can depend on the instrument that you used to have saved the money, or how much you took out, or when you take it out, whether or not you’re married, your tax bracket. All those things come in, and it really is best to even get a little help with that. And I know you guys are big into that area and you certainly have my thanks. I mean, you do some great work helping people with this because it is very, very difficult.
Zach: That’s probably the biggest thing we get here is like you stated, people being worried they’re going to outlive whatever they put up—
Nick: —in today’s world, today’s time, people living a lot longer than they used to. And we answer that question, or talk to that question about people, almost on a daily basis here.
Zach: Wrapping up your answer to that question, some of the things that we get asked most frequently are individuals with savings accounts, 401k, they’re about to start taking on Social Security. When should they take Social Security, et cetera? Tell us how those things can impact someone looking at retirement.
Ty: I would say the biggest thing you have to think about is whether or not you want to be your own investment manager or you want somebody to help you with it. If you decide that you’re going to be your own investment manager, regardless where the money is, you’re going to need to be prepared to invest your money and assume the full risk of that return. You can go out on your own, you can purchase an annuity that’s going to provide some guaranteed returns or you can invest it in the stock market or other things, but the key is, you’re going to be deciding for yourself what you want to do, and you’re taking on the risk that it’s going to last long enough. Now, if you want to seek the help of a professional, you absolutely want to choose wisely. And I don’t know if you guys are familiar with the show American Greed, but nobody wants to be on that show.
Ty: And you have to remember, if it sounds too good to be true, it probably is. It took you a long time in life to save whatever you manage to save; you want to make sure that you’re very careful and thoughtful in thinking about, well, how do I want it to pay out. And you do have to think about not just yourself, but if you’re married, you have to think about that. There is—unfortunately, it’s pretty likely that one of you will proceed the other one in death, and you want to be thinking about taking care of that other person. There may be a lot of other things to think about.
But absolutely, when thinking about this, whether you decide you want to do it yourself, or you want to get the help of a professional like you guys, you absolutely want to think that through because you can you can actually—there are a lot of instruments out there, as you guys know, that will pay you in installments and they’ll take the risk on that you’ll live too long. Now, they’re not going to pay you perhaps as much as if you managed it yourself, but those are the things you have to think through.
Zach: Perfect there, Ty. So, building off what Nick said there as well, social security is one of the options out there. What are some benefits to taking so security at 65, or delaying it until a little bit longer down the road?
Ty: Well, the first thing you got to remember is your actual retirement date might not even be 65. Mine is actually 67 because of when I was born. But the decision of when you want to take your Social Security benefits can be a complicated one. I mean you’re actually playing for how much you’re going to get per month. I mean, if you retire before your full retirement age, then you’re going to get less per month than you otherwise would get, and there’s a discount.
You can retire as early as 62, but that may mean you might end up receiving as little as 70% of the full benefit that you’ve earned, depending on your birth. Now, on the other hand, if you wait until after your full retirement age, you’re going to get a little bit more. It adds generally something like 8% per year, I think, is about as much. But again, it’s a fairly complicated formula, and it depends a great deal on the year you were born. But the thing is, you’ve got to think about well how long am I going to live and how much am I going to need to spend?
There may be some very good reasons for taking it early. If your health isn’t good, and you believe that perhaps you won’t live to be 100, it may make more sense to take a smaller number now, then wait, or if you’re not really particularly reliant on Social Security, and you’ve already retired by the age of, say, 62 or something, it may make sense for you to go ahead and accept it. But the other thing you got to remember is you’re also playing with taxes. If you retire early, but you’re still working, your benefits are likely to be reduced or offset. And social security benefits can also be taxed depending on the amount of income that you’re earning.
So, it may not help you very much to do this early. Of course, as I said, your health and your life expectancy: big factor in the decision. But another thing you got to remember, if you are married, and you’re thinking about a surviving spouse, or if you have a disabled child or something along those lines, retiring early, that smaller benefit impacts them, too. And the calculations following your death, they will be impacted, they will be, in all likelihood, subjected to a smaller amount than otherwise had you not waited and retired on schedule. But here’s the one thing that I would say to anyone: be sure to have the Social Security Administration office that you’re dealing with compute your benefit every way possible before you make a decision like that.
It can be fairly complicated. And in many cases, depending on your life and what’s happening with you, there’s more than one way to compute the benefit, and some of them may be decidedly larger than others. So don’t be afraid to get some help with that. And if you don’t really want to deal with people directly, you’ll find that the ssa.gov website is actually pretty helpful in helping you make those decisions.
Zach: Perfect. Thanks, Ty. That’s a lot of help, I’m sure, to a lot of our listeners out there because that can be a big burden on their mind, coming up on retirement.
Nick: We get that question with people becoming new to Medicare daily, I would say. Rolling into the next topic here, Ty. We know Aetna’s always up to some good things. Tell us the different ways that Aetna’s looking at working with this market to secure their financial future?
Ty: Right. As you guys know, we have traditionally been in health insurance. That’s been what we’ve done. We’ve worked with, you know, Medicare Supplement is the business that I run for Aetna, and I’ve been very successful there, but over the years, we’ve discovered that seniors have a lot of needs that sometimes insurance can fill. And over the years we’ve added things like cancer coverage, we’ve added life insurance protection, we’ve added dental insurance, a lot of things like that because they’re needs that seniors have.
And in that line of thinking, you know, we continue; we always have something in the workshop, something in our research and development area that we’re looking at. For example, later this year, we’re going to be rolling out a new life insurance product that will have a substantial discount if you already have Med Sup with it. We think it’s going to be very exciting for folks. We’re also going to roll out a new product, a new dental product that is more comprehensive than the one that we have in the market today. And we’ve been playing around with some other things that, maybe, people would be less accustomed to seeing come out of someplace like Aetna.
And those are the kinds of things that we’re tinkering inside. And we’ll see if we ever really trot those out. But among them are things like companion insurance, which is really a form of pet insurance designed for seniors. And we’ve even talked a lot internally about the possibility of offering a multi-year guaranteed annuity for folks because making your money last is extremely important to seniors. More to come on that, but those are things that we’re working on behind the scenes.
Nick: Very cool. And one thing that I want to point out to the listeners out there, if you’re a Med Sup client of ours, whether with Aena or another company, reach out to us in the near future. This is an opportunity not only to get some great rates with a great company on your Medicare Supplement but also an opportunity to get some great rates on a final expense policy as well.
Ty: Absolutely, guys. And listen, hey, I really appreciate you guys having me on. This has been a lot of fun. I always enjoy talking to you guys.
Nick: Very much.
Zach: Hey, no problem. Thanks for joining us, Ty. Just in closing here, I know you touched on a few things. Anything else about Aetna here you want to let the listeners know anything about it?
Ty: Well, honestly, I guess I’d want to say thanks. I’ve just celebrated my 10th year working with Aetna in this Medicare Supplement, and we’ve grown from an organization that had… I think we had 140,000 members. 140,000 policyholders back when I came on 10 years ago. Today, we’re approaching one and a half million.
Nick: That’s awesome.
Ty: The growth has been tremendous. Certainly, you guys had an awful lot to do with that. I appreciate that. But I know your listeners, many of them are going to be policyholders, and we really appreciate the trust that you guys put in us. We work hard at this.
It’s a great business, we love it, we wouldn’t want to be doing anything else. And certainly, we want to do all we can in the coming years to add other things that people need. And of course, our relationship with CVS is also very important to us. We’ll be looking to try to leverage that in coming here as well. So, a lot of work to do. Certainly not ready to retire just yet.
Nick: [laugh]. Just want to follow that up. We appreciate your time, and I want to let our listeners know we support Aetna, we think it’s a great company. And now you know why. There’s why straight from the top. Ty, we appreciate your time. You have a blessed day, sir.
Zach: Thanks for joining us, Ty.
Ty: You bet. You guys, too. Absolutely. Thanks, guys.
Zach: No problem.
Zach: Again, we want to thank Ty Wooldridge for taking time out of his busy schedule to join us and answer some tough questions about retirement and find that financial security, once you do retire; start looking into retirement. We hope you’ve enjoyed this episode as well as this past season. Our goal is to answer the questions we get on a daily basis and help you take on retirement like a pro, whenever that time comes for you.
As always, thanks to my co-host Nick for joining me this season. Give us a call anytime: 844-437-4253, or email us at email@example.com or firstname.lastname@example.org. Or jump on our website
seniorslivinghealthy.com, or our company website is getspi.com, either one. We’d love to hear from you guys. Call us, email us, fill out the information on our website. If you have any questions, concerns, that’s what we’re here for to help you guys out, answer your questions. We want to make sure that you have the best plan coverage out there for you to meet your needs as well as your budget. Like I said, we’re always out here for you. And so here’s to another prosperous and successful year, and good day and God bless.
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