Medicare 101
Medicare 101
Transcript:
Introduction
Hi everyone, and thanks for joining us. For those who don't know me, my name is Len Valletta. I'm the principal here at Albany Financial Group. I am joined by John Gigliello, Jim Sullivan, Steve Kennedy, who are all advisors with Albany Financial Group. And our guest of honor today is Lorianne Harris from HMS Agency. And we're talking about a very important topic today. Lori's been a great resource for us now for a few years, talking to our clients about health insurance, and in particular for a lot of 'em that are on Medicare, and how on a yearly basis you've gotta make choices as to which plan you wanna go to and so forth.
So, open enrollment is coming up, and so we thought this would be the ideal time to cover this topic. So we wanna make this conversational. And our hope is, is that the questions that we ask Lorianne as she goes through her slides, uh, will be questions that you might be thinking yourselves. If not, if you have questions that we didn't ask her or she doesn't cover in the presentation, feel free to follow up with us or her directly as we're gonna give you her contact information, uh, and hope we get your questions answered. So, without any further ado, uh, Lorianne, I'm gonna let you take over and we're gonna go to your slideshow.
Thank you. Welcome everybody, and thank you for spending the time. I think the topic is timely and we hope this educational presentation will be, will highlight questions, concerns, or answer many of the things that you have.
What Is Medicare?
Generally the overview of today's presentation is we're just gonna talk about what is Medicare, how do you become eligible, the options that are available to you, some of the costs if you need assistance. Some of the dates, and as all insurance people have, are lots of acronyms we hope we help you with.
So first and foremost, what is Medicare? Medicare is actually one of the largest insurance programs in the world, but it, today it covers over 63 million people. You'll hear it referred to as CMS, which is Centers for Medicare and Medicaid, which is part of the Department of Health and Human Services. There are many parts to Medicare. Parts A and B are original and began when Roosevelt put these in place. Part C is fairly new in the past 15 to 20 years. That is called a Medicare Advantage plan. And Part D is the prescription drug coverage. And we'll get into a lot of detail.
Medicare Eligibility and Enrollment Basics
Medicare eligibility, it initially starts when you're 65, but we'll talk about those of you who may not need to enroll. You will get lots of mail when you turn 65, and that's because the insurance carriers all know when your birthday is, and so they start sending you mail. You're all nodding your heads 'cause you know that's happening at least three months before your birthday. And we'll talk about if you have to do that. The Medicare Part A is, premium free for most of you. And different qualifiers will, will help you decide whether you receive Medicare earlier than when you're 65 and you will be eligible for parts A and B if you're under 65 for disability or end stage renal disease.
Working at 65: Do You Need Medicare?
So Lori, I have a question that comes up quite a bit from clients of ours and they ask if they need to enroll in Medicare and they're still 65 and working, what are the rules regarding that?
Great question, John. If you work for a business that has less than 20 employees, you are required to enroll in ports A and B. And if you don't, the insurance carrier that you have through your employer could alter your benefits, almost penalize you if you did not enroll correctly. If you work for a business with more than 20 employees, you're not getting any mail from Medicare asking you to part to join. And actually, even if you're working for a business that's less than 20, you have to actively pursue enrolling in Medicare A and B.
Okay, thank you.
Understanding Medicare Parts (A, B, C, D)
I think this slide's very important and I think it'll be very helpful as you go through your own personal decisions. And what do all these letters of the alphabet mean? So, part A covers your hospital benefits and Part A, you have been paying for through part of your FICA if, if you were working. So you find people will discuss that. Part A is free. It isn't free 'cause you've paid for it your whole life. Part B, this is the part that you will pay for and it covers everything outside of the hospital except for your prescription drugs. Part C is a more of a bundled health plan. It covers everything that Medicare requires on your hospital, your part B out of hospital, but it also for the most part, covers your prescription drugs.
Medicare Premiums and Income Adjustments
Okay. So I do have a question. So clients get an increase in their social security checks. So last year was a pretty good one, looking at another pretty good one coming up in January here, but a lot of years the Medicare Part B premium jumps up a lot and eats into their social security benefit. I thought I just saw an announcement that the Medicare Part B premium might be coming down actually in January. Correct. And so this could be a real good year for clients, meaning they're gonna get a nice increase in their Social Security check and maybe actually a decrease in their Medicare Part B monthly premium. Is that correct?
Correct. Correct. Okay. So the premium is going from $170 and 10 cents down to $164 and 90 cents. And, and to len's point, that will be effective January 1st, 2023. Okay.
And so something we work with a lot of our clients obviously if their income is above certain levels, then their Medicare part B premium can be higher as well,
Correct? Right. So all as
Well as D, right? Yeah,
Good point. Yeah. So, um, people are gonna be hearing this news that their premium is going down. And then some of you, if your income is higher, and this is where all these guys come into play, you may still pay more because if your income is high, there is what they call Irma, which you could pay more for part B and Part D. But these are, these are concerns that the gentleman in the room would be addressing with you. Right.
Medicare Plan Choices: Original vs Advantage
I think this page is very important. And this comes out of this Medicare new book. You may not be able to see this, but this is the 2023 book that those of you who actually are enrolled in Medicare parts A and B received. So this is the page out of that book, and I really like it. I call it a roadmap because it really, there's, you see there's two sides of the street. There's the left side of the street that talks about when you participate with original Medicare, and it even highlights some pictures. So you know, part A is hospital, part B is everything outside the hospital. So on the right side of the page, there are people who go on either side and they decide this every year. Once they're eligible for A and B, the right side, you would consider what they call a supplement plan or a Medigap.
The other side of the street of the road is another decision you make, you decide to possibly take a Medicare advantage plan. And for the most part, that's the mail all of you are getting. It's all these insurance companies want you to enroll in these types of plans that bundle your healthcare and a licensed broker would be able to identify which is better for you. But I think the important part is, is understanding the terminology. A Medicare advantage plan is not a Medicare supplement plan. A supplement plan picks up what Medicare doesn't cover, where an advantage plan, um, it becomes your only health plan and the rules and regulations that go with that.
Medigap vs Medicare Advantage Clarified
Ray just wanted to clarify a couple things. I think this is where some clients may get confused. A lot of times they might interchange in Medigap and Medicare Advantage, so there's original Medicare and you could add on Medigap to that to fill potential gaps or some of the gaps. Or you could go completely the different route and take a Medicare advantage plan.
Absolutely. You're right. So people do interchange the word. So a supplement is also called a Medigap plan. And they, believe it or not, Medicare does have out-of-pocket costs. And that's where a supplement plan picks up. Is those, those gaps in coverage.
Choosing the Right Plan
And Lorianne, is there a rule of thumb that we can use to try to help clients with determining which option is best for them?
Great question, Jim. Yes. When we first address this, and I always bring out this, this slide, we talk about their needs, their health needs. We talk about do they travel, do we have to make sure that doctors and hospitals are in the area they're moving to? Do they have children in other parts of the country? They wanna have freedom to move around. And then there are people who have a lot of skilled nursing care.
A supplement plan is a much stronger benefit in that case. So we really, we, we have to ask certain specific questions. I terms of geographic concerns and their out-of-pocket costs, sometimes we ask clients, you know, what were your costs last year? You know, how much did you pay in copays or out-of-pocket costs? That really gives us an indicator of where they may be in the future.
Thank you. And they can make changes each year depending on what's happening in their own financial life. And, you know, health life.
Absolutely. There is to lens. Uh, to your point, Jim, the open enrollment is starting October 15th, and there are other extenuating circumstances where people can enroll.
Uh, they move away. You know, we talk about maybe their child moved to Carolinas and now they wanna go. That's another time of year where they can make a change.
Understood. Thank you.
Enrollment Timing and Penalties
So Lori, the timeliness of decision making is obviously very important here. Are folks penalized if they don't make the decision in a certain timeframe?
They can be, John, if they were required to take part A and part B, you know, they, they weren't working or they worked for a small business and they, they let it go. They would possibly have a 10% penalty and have a timeframe. They would have to wait until an open general enrollment period applied for them to even get into Medicare. So you really want to know what the circumstances are why they didn't because there are a lot of extenuating that allow them not to en enroll, but if they let all those go, they could likely have a penalty that follows you the rest of your life. Okay. On your part B premium.
Paying Medicare Premiums
Alright, I got one more question for this slide. So we talked about how currently the Medicare Part B premium is 170 bucks a month per person if your income is below certain levels, and it's deducted from your social security check. What if I'm still working? I'm sorry. I'm not clicking Social security, I should say, and I'm on, I'm getting, I'm paying the Medicare Part B premium. How do I pay that if I'm not paying it through my social security check?
Good question. You are going to be billed quarterly for that premium. And they're gonna want the quarter to get clean. So if you were a September birthday, that's not a quarter, you may get four months initially, and then they'll get you on a quarterly. They will ask you if you wanna do it out of your, um, checking account. But most seem to, um, stick to the quarterly. The quarterly.
Medicare Advantage Plan Types & Enrollment Periods Explained
So, Jim, you touched on this talking about, you know, how do we figure out the differences in the plans?
And I won't go into a whole lot of detail, but I, I thought the slide was good to talk about. How do I start this conversation between traditional Medicare or a Medicare Advantage plan? You know, we talk about the coverages, we talk about sometimes additional benefits with a Medicare Advantage plan, they all, all these insurance companies want your business.
So they wanna give you hearing benefits and dental benefits and this and that, you know, those shiny things that may be the most important thing that you care about. You're super healthy. Um, the provider network, you know, John, you touched on that.
You know, you know, how do we pick and choose where that is? If you want to be able to go very fluidly from one area to another, you have, we have to talk about that. We may want Medicare because Medicare is a behemoth and most hospitals and many, many doctors take it. But the cost of it, you know, there are copays with Medicare Advantage plans, but they're also costs with traditional Medicare. And then in, um, the out-of-pocket costs. Medicare Advantage plans have a cap. Traditional Medicare doesn't, you know, you can continue to pay that. So this is a very important slide that gets the conversation started. Mm-hmm.
Doctor Participation and Coverage Limits
And I heard you say that many doctors take it. Is it safe to assume then that there's some doctors or specialists that someone sees a client of ours that they may not accept Medicare nor Medicare advantage?
Absolutely. As a government provided care, insurance company Medicare doesn't pay doctors well. Mm-hmm. I think we all know that. And so a lot of doctors reluctantly participate, but some dig their heels in and they'll say, I'm not gonna participate. And if you're with original Medicare, that's, that's a concern. And so that's a good question and always refer back to your doctor to ask, you know, what plans I participate with.
Closing Remarks and Annual Review Importance
So folks, there's a lot of information on these slides. So we're gonna give you all the ability to get a copy of these slides, if you will. But we wanted to get this slide up 'cause, uh, last couple have a lot of great information. But it may be hard to see if you're looking on your laptop. So,
So we've been talking about Medicare Advantage plans, which are also called Part C. Um, and there's different types, you know, so let's just make it more complicated, right? Provide more things.
So, you know, this is really a great topic. Although maybe not the most exciting thing people want to talk about, but, it's, it's a pretty complex area. We brought in a real expert here who's been a tremendous resource, as I already said to us.
So, so many things can happen that can cause you to wanna look at this every single year. So much more than even car insurance, homeowners insurance, and so on. This is really one of those things that every year you, you might wanna re-look at this, if you're relocating, God forbid, your health status change, your family status change. So there's a number of reasons why that you should wanna look at this on an annual basis.
So we mentioned open enrollment's coming up. It's October 15th, goes through to December 7th. So rather than just say, I'm gonna renew with the same exact plan that I had last year feel free to, to give Loriann a call, call our office. But we're gonna just refer you to her anyway. So, but her contact information will be at the end of the presentation there, I should say on the slideshow. So, don't, don't hesitate to reach out. We really hope you enjoyed our conversation today. And Lorianne, we wanna thank you for being, as I say, a great resource and, and all the information you brought to us. Thank you. And you were great panelist. Great.