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Medicare Buy-in at 50

Medicare at 50?

This week, Devin and John talk about the pros and cons of different ideas about expanding Medicare coverage to folks of lower ages.

“Medicare for All” has been in the news a lot lately. Senator Bernie Sanders has announced that he is running for president, and that he thinks insurance companies should be abolished and everyone should get Medicare.

The Kaiser Foundation did a survey to ask voters what they thought about Medicare for everyone. Not surprisingly, the Democratic voters were in favor of it, the Republican voters were not in favor of the idea. Then, there was a follow up question: What would you think about allowing earlier access to Medicare, like perhaps at age 50? A majority of respondents thought that was a good idea and worth exploring.

For the last couple of years, Senator Stabanow has proposed the “Medicare at 50” plan. This year, it has quite a bit of support. This Medicare at 50 bill has a lot more support than the Medicare for All proposals.

Devin and John talk about their clients, many of whom have the financial means to retire prior to age 65, and yet have to keep working to maintain their health insurance. There are also folks who find themselves unemployed in their 50s and 60s, and it is hard to find work that includes health insurance.

While Devin and John haven’t gotten the actual text of the bill, so there are some questions:

How would we pay for it? Senator Stabanow has stated that lower-age Medicare would be self-funding. Individuals would pay the true cost of that coverage, which would be more expensive.

Devin asked Danielle Roberts from Boomer Benefits to share a little bit more about this proposal. She has some great insight.

Danielle thinks there are a couple of reasons why this idea is more popular now. Polling has shown that voters support having a public option, vs. a mandate that everyone be covered.

This current proposal would offer private Medicare plans to those ages 50-64. They would be sold via the health care exchanges. They would have the same subsidies and premium tax credits that are currently available to an individual purchasing coverage through the health care exchange. This would be a private Medicare plan.

There will be opposition will come from health care providers. They already have razor-thin margins on Medicare patients. This change would mean that many more patients would be using Medicare for their care, decreasing the reimbursement rates. Insurance companies will be concerned about this change being one step closer to a single payer system

Danielle agrees that we really have to see the details of the actual bill before we can understand all the implications.

John is not in favor of Medicare at 50. He points to the growth of concierge medicine, where doctors don’t take insurance at all. The rules about accepting Medicare are very limiting, and make it difficult for doctors to make money if they accept Medicare patients. This pushes some doctors to stop taking Medicare altogether. John is worried that the more people are on Medicare, the more that Medicare will try to push down the costs of coverage, which will further segment the health care offered to Americans.

Both Devin and John suggest that if you are eligible for a Healthcare Savings Account (HSA), you should be putting away as much money as you can.

Become a member of the Big Picture Retirement Facebook group, to join in the conversation with Devin, John, and other listeners. This is the place to request other topics that you would like to hear!

Don’t forget to subscribe to the show, and leave a rating and a review!

Do you have a listener question? You can now leave your listener questions via the special Big Picture Retirement voicemail! Click here to go to the Talk to Us webpage and leave your name, hometown, and question.

 

 

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What You Need To Know About Medicare: Part 2

Danielle Roberts of BoomerBenefits.com is back again this week, talking with Devin about more Medicare issues. Danielle is an expert on Medicare supplements and Medicare Advantage plans, and runs the Boomer Benefits company to help seniors with their Medicare needs. In last week’s episode, Danielle and Devin talked about the parts of Medicare, the difference between a Medicare supplement and a Medicare Advantage plan, and how to find the right agent and product for you.

The Various Timeframes

Each year, there is an Annual Election Period that runs from October 15th to December 7th. This is when you can make enrollments, changes, and disenrollment for Part D and Medicare Advantage plans. The reason that there is an open enrollment period is because people need to be encouraged to purchase the plan BEFORE they need the coverage, and also because the Part D and Medicare Advantage plans will have changes each year.

With an Advantage plan, is your health considered during the enrollment period? The only condition that will disqualify you from enrolling in an Advantage plan during a valid election period is end-stage renal disease.

The initial enrollment period for Medicare is from three months before your 65th birthday through three months after your 65th birthday. If you fail to enroll in Medicare during the initial enrollment period, there is a general enrollment period from January 1st to March 31st each year, then your coverage will start in July and you will owe in a penalty for enrolling late, unless you are still covered by an employer plan.

What if you’re still working when you are 65? If you work for an employer that has more than 20 employees, and you have group health insurance through that employer, you can delay enrolling in Part B and Part D because your employer health care is primary. Then later, when you retire, you would then enroll in Part B in what Medicare calls a special election period or special enrollment period. You have 8 months to add Part B with no penalty, and you have 63 days to add part D with no penalty. Devin points out that this doesn’t apply to a COBRA plan – COBRA is not creditable coverage, so you want to add that Medicare Part B before the 8 month period is up.

These rules also apply to spouses who are covered under their husband or wife’s employer’s group plan.

If you work for a smaller employer, that has less than 20 employees, then your Medicare coverage is primary. In this case, you want to enroll in Part B and Part D when you turn 65.

There is  rule that some folks may not know about because it went away and now it has come back: it is called an open enrollment period, from January 1st to March 31st, during which you can drop your Medicare advantage plan and return to original Medicare, or you can make a one-time switch to a different Medicare advantage plan. Now, if you switch back to original Medicare, and you want to add a supplement, you may need to answer those health questions. Danielle recommends that you apply for, and get approved for, the Medicare supplement before disenrolling from the Medicare advantage plan.

The Income Related Monthly Adjustment Amount

The Income Related Monthly Adjustment Amount (IRMAA) is a surcharge on Medicare Part B premiums for higher income beneficiaries. The first tier starts at $85,000 in income for an individual, and $170,000 for a married couple. If your income exceeds that threshold, you’ll pay more for Medicare Parts B and D. As your income increases, the surcharge increases.

If you have one year of extra income, then the premiums will go back down in the following year. This happens automatically; there’s nothing that you have to do.

Danielle points out that you can file a reconsideration request with Social Security if you have

Danielle Roberts is from BoomerBenefits.com, they also have a Facebook page and a Facebook group, and a YouTube channel. They also have a Medicare 101 webinar, where you can learn more about Medicare basics.

Become a member of the Big Picture Retirement Facebook group, to join in the conversation with Devin, John, and other listeners. This is the place to request other topics that you would like to hear!

Don’t forget to subscribe to the show, and leave a rating and a review!

Do you have a listener question? You can now leave your listener questions via the special Big Picture Retirement voicemail! Click here to go to the Talk to Us webpage and leave your name, hometown, and question.

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What You Need To Know About Medicare: Part 1

medicare basics with danielle robertsThis week, Devin is talking about Medicare with Danielle Roberts of BoomerBenefits.com. Danielle is an expert on Medicare supplements and Medicare Advantage plans, and runs the Boomer Benefits company to help seniors with their Medicare needs.

The Parts of Medicare

Part A is hospital coverage – that’s what pays for in-patient hospital care, skilled nursing care, hospice, some home health care, and blood transfusions.

Part B covers pretty much everything that Part A doesn’t cover. It’s more like the insurance you had when you were younger, covering doctors appointments, physical therapy, medical equipment.

Part D is prescription drug coverage.

Part C is a Medicare Advantage plan, which combines A and B (and even D) together. These are run by private companies.

Medigap is also known as the Medicare Supplement.

How Medicare Works

For a normal person, they are automatically enrolled in Part A and B. To cover the things that aren’t covered by A and B, you’ll buy either a Medicare Advantage plan or a Medicare Supplement to help fill in those gaps.

You get Parts A and B through Medicare. Medicare Part B only pays 80% of your expenses, so that can really add up quickly. A supplement will pay some or all of that cost. The Medicare Supplement is purchased through a private insurance company. A Medicare Advantage plan is also purchased through a private insurance company, but it is a little different because it covers all your care, including the care that would usually be covered by Parts A and B.

Medicare Advantage Plans

When you join the Advantage plan, the plan takes over all of your health care. Medicare pays that plan a set premium each month to take on the risk of your health care needs. The Advantage plan pays all the claims that you have that year. It’s closer to traditional insurance, where you pay a co-pay or cost-share for each service provided. Medicare Advantage plans are very popular for certain groups of people. This includes people who take don’t use very much health care over a year.

Medicare Supplements

Medicare supplements work more like secondary insurance. Medicare pays first, covering the things covered by Medicare, and the supplement pays some or all of the remaining costs.

How do you know where to look for a supplement? How do you know which is the right supplement for you?

One of the great thing about Medicare supplements is that each plan has the exact same coverage. If you look at a Medicare Supplement, like a Plan F or a Plan G, the benefits are exactly the same no matter which policy you choose – Medicare designed it to be that way so that you can shop that policy based on price. You can look at the rate increase history for those carriers. The premium will vary based on a couple of different factors, including the age when you purchase the policy, your gender, your zip code, tobacco usage, and any household discounts.

The carrier sets the rate and the agent can’t change it. So, you’re picking the carrier that you want. You can look at the rate, and their history of rate increases. You also want to look at the company’s financial ratings. There are great companies that have A and B financial ratings, so there is no reason to go with a company that has a lower financial rating.

When Do You Get Supplemental Coverage?

Medicare supplements and Medicare Advantage Plans have different rules for when you can get in and out of them. Medicare Advantage plans and drug plans work on an annual basis, with an open season each fall. Medicare supplements do not have an annual election period. You can apply for a new Medigap plan any time you want.

You have six months after becoming eligible for Medicare Part B to purchase a Medicare supplement without a health review.

If you purchase a Medicare Advantage plan when you first become eligible at age 65, there is a 12 month period in which you can get out of the plan at any time. This allows you to move to a Medicare supplement, without underwriting, if that is a better choice for you.

Now what happens if you’re in a Medicare Advantage plan and something bad happens? After the 12 month window, then you’re subject to medical underwriting and review.

Do Agents Have Conflicts of Interest?

Just like any type of advisor, you need to understand how your Medicare advisor is being compensated. Devin is skeptical, because he doesn’t know if the insurance agent is going to put the client in the best plan for the client, or in the plan that will give the agent the higher commission.

Danielle explains that one of the big differences with a newer agent is they may only offer a few of the available policies. And when they’re building their business, it is possible that an agent would want to push you towards a Medicare supplement that pays the agent a little bit more. When you’re working with a more established agency, they don’t have time to worry about those small differences in commission.

When shopping for an agent, here are some questions to ask.

  • What companies do you represent?
  • What types of policies do you sell?

If your agent only sells a few plans, then you may not find out about a company that might be less expensive.

Devin asks Danielle, from the agent’s standpoint, does one type of plan pay the agent more? Danielle answered that you can look up what the annual commission rate for an policy. The rate on a Medicaid supplement is right around 20%.

Before you get to the point of purchasing additional Medicare coverage, you should learn about the difference between a Medicare Advantage plan vs. a Medicare supplement. It is important for you to look at what those services will cost you and figure out what questions to ask.

Danielle Roberts is from BoomerBenefits.com, they also have a Facebook page and a Facebook group, and a YouTube channel.

Become a member of the Big Picture Retirement Facebook group, to join in the conversation with Devin, John, and other listeners. You can request other topics that you would like to hear in a post pinned to the top.

Don’t forget to subscribe to the show, and leave a rating and a review!

Do you have a listener question? You can now leave your listener questions via the special Big Picture Retirement voicemail! Click here to go to the Talk to Us webpage and leave your name, hometown, and question.