In this Medicare Workshop video, you’ll learn:
- Medicare Basics
- What a Medicare Supplement REALLY Is
- Do you even really NEED a Supplement?
- What plan is right for you?
Plus, a bonus quiz that helps you understand how to choose a supplement, based on what YOU value the most.
This video was recorded live, during an interactive Webinar hosted by Ally Senior Benefits. (The video intro was added to explain the video to our YouTube viewers).
Understand Medicare Supplements in 4 Easy Steps: Webinar Transcript
(*This transcript of the live webinar has been optimized for readability by removing excess words such as AND, SO, NOW, UM, and statements or content unrelated to the subject).
Hey there, this is Pam Turner with Ally Senior Benefits and I just wanted to give a quick introduction to this video.
This video is a webinar, that I recently presented online live, and since I only initially promoted it to Facebook, I wanted to make it available to a wider audience here on YouTube.
The title of the Webinar is “Understand Medicare Supplements in 4 Easy Steps.” I received great feedback, and I hope you enjoy it as much as my live attendees!
The Original Webinar Transcript Starts Here
Welcome everyone, I’m really glad you could make it out today! I’m Pam Turner, the workshop organizer and presenter. I’m absolutely thrilled that you’ve shown up today, and today’s online class will teach you how to understand Medicare Supplements in 4 Easy Steps.
Now, I want you to have the absolute best viewing experience possible, so what I’d like you to do is turn off anything that’s operating in the background on your computer such as your email inbox, any other open tabs, silence your phone, and close your door and give yourself this time to learn. Just this little bit of extra focus will make all the difference and your’e going to be amazed how simple this is after we’re done. And I’ve been working for months to make these online classes a reality and I’m so excited to bring you this opportunity to learn so easily in the comfort of your home. So if you just give me your full attention, I promise you’ll walk away with a new understanding that can change everything about how you approach your Medicare choices.
I want you to stay on to the very end because that’s where everything comes together. That’s when you’ll see how everything you’ve learned can apply to your own situation, and you can determine what’s best for you on your medicare journey. Also, at the very end we’re going to have a Q & A session so definitely keep a pen handy and write down any questions during the workshop.
Hopefully you’ve printed out the workbook so you can follow along and jot down any notes.
You’re in the right place.
Now I realize that everyone’s situation is a little different. Not everybody has the same questions, but if you can relate to any of these scenarios or something similar, you’re in the right place.
Maybe you’ve been searching online and you’ve been trying to understand Medicare or Medicare Supplements and nothing is making sense.
Maybe you’re new to Medicare and you know you need to start thinking about a supplement, but you’re not sure of the best way to find the right plan for you.
Who can you trust?
Maybe you feel like everyone is just trying to sell you something.
Maybe all that mail about Medicare plans just confuses you more.
They all sound great, I mean, there must be a catch. And these companies spend millions on marketing. What are they not telling you? Maybe you’re just having trouble moving forward and making a decision, and I get that. Some people call it analysis paralysis and you just want someone to show you how to choose. If you can relate to any of these scenarios and fears, you’re in the right place.
Because today I’m going to clear up for you the BEST way that I know how, the most common areas of confusion that people have about medicare supplements.
What this presentation is NOT
But first, what this presentation is NOT:
- This is not a sales presentation
- This is not a Medicare Advantage Plan presentation, (although we are going to be going over what that is, to educate you on that),
- It’s not an attempt to promote an insurance company or one particular plan.
The 4 Simple Steps
Today I’m going to take you through just four simple steps, or areas, that we’re going to dive deeper into, to better understand Medicare Supplements, and
the first step is your foundation, and that is, understanding how Medicare works.
Now, I know many of you might already have a solid grasp of this, but I want to make sure that everyone is on the same page.
In step #2, you’ll learn “What is a medicare supplement?”
In step #3 we’ll cover “Do you even really need a Medicare Supplement?”
And finally in step #4, what plan is right for you?
My Background and Credentials [We help seniors in multiple states!]
I just want to take a moment to give my background and credentials, and what led up to me teaching this webinar. I’m a licensed health and life insurance agent, since 2008, and I’m licensed in 5 states. And my resident license is in Florida. Here’s my resident license number as well as a link here, (this is the Florida State Department of Insurance website) and also any of my other states – you can check on my license there as well.
And I stumbled into insurance accidentally through one of my daycare clients years ago.
I ran a daycare in my house and, of all things, found my niche in helping people understand Medicare, and navigate through their options.
So through lots of driving and face to face appointments, my client base grew over the years until a series of unexpected events, (one of which included getting re-married, and moving across the country to Tampa Florida).
Two things happened as a result, that are actually relevant to our class today, so just hang with me here for a minute on this because I do have a point.
The first is, that with all my clients now on the opposite coast, I switched to an almost 100% over the phone business model (and turns out this upped the convenience factor for all of us). So it was a natural transition to begin teaching online as well. Not to mention the fact that I had actually began cold-calling folks here in Tampa in an attempt to reach more people, which is totally soul crushing, (it’s horrible). I hate cold calling and I’m sure you can all relate, that nobody wants to bugged by a cold caller, so I was way overdue for a new way to reach folks that needed help.
So eventually this idea of hosting online classes came about, and after many months of creating this content, I’m so humbled you took time out of your busy day to join me on my very first webinar series!
The second thing that happened as a result of our move was a big lesson that I learned through my mom’s personal insurance situation, which came to light after moving from one coast to the other.
My mom is Medicare age, (she also happens to be my best friend).
And helping my mom forever changed how I look at Medicare Supplements, and this is something that I can now pass on to you. I’ll be sharing more details about that story later, once we get more foundation on how Medicare works.
So, NOW, it’s a mission of mine to make sure that people understand what their options are before settling on a decision about their Mediare Plan.
And this is why I created this class for you.
Through this workshop you’ll understand the WHY behind making a decision, enabling you to make the right choices for your peace of mind.
So let’s jump into the 4 steps to understanding Medicare Supplements.
The first step we’re going to learn is: How Medicare Works.
This is your foundation for everything. Like I said, I’m going to keep this super basic, sort of like an overview, and don’t forget to have your pen and paper handy, to write down any questions that come up. So this is what we’re going to learn.
- First, what are the parts of Medicare.
- How much is your monthly cost?
- What is covered by the parts of Medicare?
- What are the medical copays on Medicare?
- And lastly there’s this thing about Medicare that no one really talks about, which I’m going to get into in a bit.
Now, even though there’s 4 parts of Medicare technically, we’re going to discuss the two main parts now, and those are Part A and Part B.
Part A is your hospital coverage.
And more specifically, it’s inpatient hospital.
So this would apply when you’re actually admitted to the hospital overnight, unlike a surgery center where you go home the same day. So chances are you won’t have a monthly cost for Part A, (this monthly cost is called a premium which is a recurring payment to Medicare or any insurance company – so if you or your spouse paid medicare taxes while working, you typically get Part A at no additional cost to you).
Medicare Part B is your doctor coverage.
Part B covers doctor visits and other medical services and tests.
The standard monthly cost or premium for Medicare Part B is $121.80.
So let me explain this a little further. By standard I mean that the majority of those becoming eligible for Medicare in 2016 will fall into the income bracket that will set your monthly premium at $121.80. And there’s a really handy chart here, it’s from Medicare.gov, showing you the different levels of income and how that affects your premium amount.
And I don’t want to get too bogged down in the details of Medicare in this workshop, we could literally go on for days. I want to try to keep things simple and easy to follow so you can grasp the basic principles of what I’m trying to get across. So I’ve created a resources page on my website and this will have everything you need, to find out more information about things like how to sign up for Medicare, a link to a special calculator tool that Medicare offers on Medicare.gov, to check your eligibility and premium costs, and the most important publications, like the Medicare & You handbook (and a few others).
So I recommend you jot down this address, AllySeniorBenefits.com/resources.
A quick word about Enrollment:
I also wasn’t going to spend a lot of time talking about Medicare enrollment, but in case there’s anyone that hasn’t signed up yet, you have an initial enrollment period that lasts just 7 months.
So it’s the three months before the month you turn 65, it’s the month of your birthday, and three months after your birthday month.
Then, after this cutoff point you can’t enroll just whenever you’d like, and you could possibly get a penalty, so I recommend signing up when you’re first eligible.
Next, we’re going to look at some examples of what your medical costs would be on Medicare Parts A & B.
But first, real quick, I want to mention a common misconception.
A common misconception is, some people worry that if they don’t get a Medicare Supplement, and they end up in the hospital, they’ll literally have thousands and thousands of dollars in bills and that just isn’t the case.
And what I mean by just a short hospital stay is, maybe just a few days; however it doesn’t mean that you don’t need a supplement, so stay tuned for more on that when we look at a long term hospital stay in a bit.
What I’m going to do is show you how much just a one time hospital admittance would cost with just Medicare and no supplement.
Under Medicare Part A, your hospital coverage, this is the way it works:
When you’re admitted to the hospital you pay a deductible of $1288.
This $1288 is kind of like a copay, but Medicare calls this a deductible. There is a reason for that. And if you’re a little confused on the word deductible that’s ok for now, I’m going to clear that up in just a second.
So you pay the $1288 whether you’re in the hospital overnight, or for a few days, or up to 60 days. The catch here is that you could end up having to pay the $1288 again, later in the year. So this isn’t a “one and done” annual deductible. We’ll talk about that more in step #3 when we discuss whether or not you even need a medicare supplement.
There’s a lot more to Part A; so far this is pretty much just the kindergarten version of the basic Part A hospital benefit. So we’re going to move on to your medical costs on Part B.
Part B also has a deductible, but it’s a small deductible. So this deductible is the calendar year deductible. That means, once it’s paid, beyond that, you just pay the regular Medicare coinsurance (some more on that in just a second).
What is a Deductible?
I want to clarify the word deductible.
Sometimes it helps if you compare it to your auto insurance deductible, because everyone knows that if you get in an accident you’re going to have to pay the first “X” amount of dollars whether it’s $500 or $1,000, you’re going to have to pay that first toward the repair before the insurance company picks up the rest.
So with your Medicare Part B, you’re paying the first $166 of your medical care out of pocket. Then after that, you pay 20%. The good news is, that the deductible only applies to non-preventive services, so you don’t have to worry about paying out-of-pocket for your annual physical and tests. That’s covered at 100% with no deductible.
Now that you basically know what Medicare covers, and what your out of pocket cost is for those services – what about your providers?
How does that work?
The thing I mentioned earlier (that no one seems to talk about) is the FREEDOM you have on Original Medicare. (At least I don’t really hear people talking about this on my end).
Everyone seems to talk about different plans, or different insurance company names and being worried if their doctor will accept that insurance company, so I hope to clear up how this works by the end of this workshop.
When you’re using your Parts A and B Medicare benefits directly, (as opposed to getting your benefits through private insurance, like a Medicare Advantage Plan), you have the choice of any doctor or hospital that accepts Medicare in the entire U.S.
So on Original Medicare you don’t have any network restrictions; in other words:
- You don’t have to stay within a limited network of doctors
- You don’t have to get a referral to see a specialist,
- You don’t have to only get Medical care within your own county
- You can travel anywhere for as long as you want.
This is freedom.
And that freedom is valuable.
I’m going to be bringing up this issue of freedom again and again, because I think it may be the #1 factor that’s overlooked, or not really taken seriously enough, when choosing a Medicare plan.
Step #2: What is a Medicare Supplement?
Now we’re going to move on to step #2. And that is, learning what a Medicare Supplement REALLY is.
Now, when it comes to Medicare Supplements there are definitely some mistakes in understanding and I’d like to clear these up once and for all today.
And, you know, all the junk mail from the insurance companies, (I’m sure you all know about this), this is the pile of chaos.
This doesn’t help, either.
It just doesn’t seem like they’re trying very hard to make things clear and understandable.
Maybe it’s just me, but I get the feeling that they use the confusion to their advantage, to sell you guys stuff.
So up until now in this workshop, I’ve just been using the term “Medicare Supplement.”
And it seems that any kind of plan beyond general Medicare can sometimes be lumped together under this seemingly general term “Medicare Supplements.”
But there’s actually two main plan types that you may have heard talked about in regards to Medicare options and they are Medigap and Medicare Advantage.
Now, a TRUE Medicare Supplement is a Medigap policy.
And this is the plan that fills the gaps in Original Medicare.
The other plan I mentioned, Medicare Advantage, is not a Medicare Supplement, but actually it’s a part of Medicare.
In other words, it’s an alternate way to receive your Medicare benefits, and that way of receiving the benefits is through private insurance.
So even though a Medicare Advantage plan is not a Medicare Supplement, it’s still really important that we understand how it works in order to understand the big picture and figure out what’s right for you, you see; because it’s in the media, it’s everywhere.
And it’s so easy to get caught up and confused and the only way to overcome that is to make is really clear so you know what we’re dealing with. So just bear with me. I’m going to go over these definitions one more time to make it really simple.
(I Iike a lot of repetition; hopefully it’s not too much repetition. But I know these terms can get jumbled around and I want it to be super clear).
So again, a TRUE Medicare supplement is a Medigap policy.
This is what the Centers for Medicare and Medicaid services calls a Medicare Supplement, (which you can see from their publication “Choosing A Medigap Policy).”
Often the terms Medigap and Medicare Supplement are used interchangeably and I tend to do this too, which can get confusing. So from here on out I’ll try to mostly use the term Medigap, just to be clear which plan I’m talking about.
So, a Medigap plan or policy is actually an add-on policy to your Original Medicare and it covers the gaps. And just to be clear, it doesn’t mean it covers services that Medicare doesn’t cover, it’s not that at all, (except it does cover foreign travel emergency).
What it does, is, it covers YOUR out of pocket copays and coinsurance that YOU have, on Original Medicare – the expenses that you’d have to pay out of pocket if you didn’t have that policy.
And just to repeat one more time, a Medicare Advantage Plan is just an alternate way to receive your Medicare benefits through a private insurance plan.
Here’s a really handy chart I wanted to share with you. It’s from the Choosing a Medigap Policy handbook, which you’ll be able to download on my resources page. This shows in a REALLY clear and simple way, how your choices work.
And it really just comes down to two scenarios.
Medicare Plan Scenario #1
- Your first option is to keep your Original Medicare which consists of Part A hospital and Part B doctor coverage.
- And then, to supplement your Medicare and cover the gaps you’d add on your Medigap policy.
The chart also shows your prescription drug coverage called Medicare Part D, (that’s the 3rd part of Medicare).
And under this first option (in the first column) of keeping your Original Medicare, and adding on a Medigap plan: your drug plan is always going to be a stand-alone plan. That means, none of the Medigap plans include drug coverage. So, when you have Medicare plus a Medigap plan, you must always buy your drug plan separately. That’s really important to note.
Medicare Plan Scenario #2
And your second option shown on this chart is to get your Medicare benefits through a private insurance plan, which we’ve already been talking about a little bit.
This is Medicare Advantage, and you’re getting:
- Medicare Part A
- Medicare Part B
- and usually the drug plan Part D
All through a private insurance plan.
So even though (also under option number 2) it says, “decide if you need to add drug coverage,” I just want you to disregard this, because adding a separate drug plan to a Medicare Advantage is not very common. The most common choice would be to choose a plan that includes the drug coverage. I’m just going to leave it at that for now to keep things simple.
So let’s go ahead and dive into step number 3.
Step #3 is, “Do I even need a Medicare Supplement?”
So far we’ve learned about Medicare basics:
- We found out that a Medicare Supplement is really a Medigap Plan, and,
- That Medicare Advantage Plans are just getting your Medicare benefits a different way.
You might have asked yourself at one point, “Do I even really need to supplement my Medicare?”
“I already have to pay $121.80 per month just for my Part B, why would I want to pay more? Seems like Medicare has pretty good coverage.”
Well, you know, some people DO just keep Original Medicare, and that’s all, and some people don’t buy a drug plan either. It’s not, super common, but it CAN be, for those, (for example) with VA coverage, which is coverage for veterans.
I don’t necessarily recommend this unless it’s under certain circumstances.
But, what we’re gonna do is, in this step, we’re going to dive a little deeper into the Medicare benefits and we’re going to find out what are some of the worst case scenarios for out-of-pocket expenses that you could face.
But before we get into that, I just want to mention to you the MOST important, and SIMPLEST reason to supplement your medicare and that is:
Medicare does NOT have an annual out of pocket maximum limit or cut-off point to your spending.
Now, I’m just talking about the medical here, not your prescription drugs.
So let me just repeat one more time: Medicare has no maximum cut-off point to your out-of-pocket spending in a year.
That means your Part A hospital coverage and your Part B doctor coverage has no cut-off point to the amount that you might have to spend in a year.
And you might have heard this term “annual out of pocket max” if you’ve had a regular individual insurance plan, or plan through your work. An annual out-of-pocket max is a set dollar amount; it’s the cut-off point, or most you’d be required to pay in a year and once you hit that the plan would pick up the rest.
Imagine not having this out-of-pocket cut-off point.
I mean, the fact that Medicare doesn’t have it is huge. And, I don’t hear too many people talking about this. But when we get deeper into the benefits you’ll see how this can be a big problem.
So just to recap: We already went over the medicare basics. We saw the Part A hospital costs, I showed you how your part B works. So we’re going to break down what Medicare Part A and B cover a little further, to give you an idea of how deep the expenses could go. And I don’t want you to worry about trying to remember the exact cost details that I’m going to go over. The important thing is just to try to see the big picture. This will help you in your decision making down the road.
Back to Medicare Part A.
Let’s revisit what your expenses could be if you were admitted to the hospital long term.
We already talked about the part A deductible, which is $1288.
And you pay this whether it’s a few days, or up to 60 days.
But, if you’re in the hospital beyond the 60 days, the daily cost is $322 per day.
Imagine if you needed a total of 90 days in the hospital. That additional 30 days at $322 per day would set you back $9,660. Beyond this 90 days in a benefit period the cost is $644 per day. (I’m going to mention benefit period in just a second).
So these are referred to as your lifetime reserve days. There’s only 60 lifetime reserve days available to you, and after the 60 days you’d be responsible for all costs.
What is a Benefit Period?
And I don’t want to get too complicated right now; I know that’s a lot of information.
But I wanted to mention what a benefit period is.
And I included a word-for-word definition in your worksheets if you have that handy.
Basically how it works is that if you’re admitted to the hospital, and then released, and you don’t go back for 60 days, your benefit period will end. A new one would start if you got re-admitted later in the year. So one of the things this affects is: whether or not you have to pay the $1288 again in the year.
If that benefit period ends and you go in the hospital later, you pay that $1288 again.
Long Term Hospital Stay – Here’s the Math.
So let’s just back up a minute real quick. I want to run through this math just to show you – just to give you this visual, on this long term hospital stay.
And I know this is fairly unlikely to happen; I just want you to be aware of what’s possible under your Medicare benefits.
So, for the first 60 days you pay $1288. An additional 30 days would cost you $9, 660. Then, say you needed to only use half your lifetime reserve days, which equals $19,320 (totaling $30, 268). That’s just one example of a very long term hospital stay, and like I said, this is really unlikely but it’s important to know what you’d be responsible for cost-wise if it did happen, because this is actually how your medicare benefits are set up without a supplement.
Our next scenario goes over the cost of skilled nursing. The reason why I’m bringing up skilled nursing is that it’s more common, actually, than long term hospital stays and it’s pretty expensive, (or it can be) and you don’t really hear it talked about too much.
Definition of Skilled Nursing
So just to explain, really quickly, what skilled nursing is: Say you’re in the hospital less than 60 days, (maybe just 5 days) and you’ve paid your Part A deductible of the $1288.
Skilled nursing is needed when you’re ready to be discharged from the hospital but you still need some additional recovery time.
Sounds like a pretty fairly common potential situation, right? This is different from nursing home care which is primarily for getting help with activities of daily living, which Medicare doesn’t cover. That would be a Long Term Care insurance issue, which is a whole other thing.
Skilled nursing is covered by Medicare Part A for the first 20 days at no cost to you, which is great, but for days 21-100, your cost is $161 per day.
So just 30 days in skilled nursing would set you back $4,830.
And all 21-100 days in skilled nursing would cost you $12,880. (You’d be responsible for the full cost of any additional days beyond that).
And again, just a reminder that these are the Original Medicare costs you’d have to pay out of pocket, without any sort of supplemental coverage.
Revisiting Medicare Part B
Finally, as we explore all the reasons why you may need a Medicare Supplement, we’re going to revisit Medicare Part B.
As we talked about earlier, Medicare Part B is generally known as doctor coverage but it also covers lots of other services such as preventive care (which is no additional cost to you, so that’s great news).
But Part B also covers all the services that are needed to diagnose or treat any medical conditions including labs, x-rays, CT scans and MRIs, also outpatient surgeries (which is a huge one, it’s really common), and those (outpatient surgeries) are any procedures you’d have done at a surgical center and you get sent home the same day. This could be like a biopsy, some sort of scope, or, um, any minor surgery.
And you’ve probably heard of common therapies for cancer, such as chemo and radiation, which are also covered under Medicare Part B, as long as it’s delivered in an outpatient setting. We also have covered under Medicare Part B: emergency room services, ambulance, mental health care, and durable medical equipment (that would be crutches and wheel chairs, etc).
Even though we started out really simple, labeling Medicare Part B as “doctor services” you can see that we’re dealing with a lot more than just office visits under Medicare Part B. And if you recall, after your deductible of $166 on Medicare Part B you’re responsible for 20% of the costs. So we’re looking at a potential 20% of all those services I mentioned just now.
Twenty percent, in and of itself, is bad enough.
But knowing that there’s no out-of-pocket maximum cut off from year to year sounds scary to me.
This is just my take on the matter, as a licensed agent.
I know everyone has their own comfort level, and only you know what your own finances are like, and what’s right for you.
So I just wanted to make a clear case about why you’d need a supplement (the number one reason being that there’s no out of pocket maximum cut off, for your out of pocket in a year).
This puts you at a definite risk financially.
So I hope this made some sense. I hope it wasn’t too much information. And again, there’s no need to remember these specifics. You can find this breakdown of costs on Medicare.gov and also in the Medicare and You handbook (which you can find on my resources page which is AllySeniorBenefits.com/resources).
Finally we’re at step #4, “What plan is right for me?”
I already talked about Medicare Supplements, and defined what a Medicare Supplement actually is, and that a true Medicare Supplement is a Medigap policy, (I probably repeated that three or four times already). And, that Medicare Advantage plans aren’t really Medicare Supplements, they are just another way to receive your Medicare Benefits through private insurance.
Ok, but now what?
Just because you know what these words mean, it doesn’t necessarily make it easy to know which option is right for you.
I’m going to give you a little disclaimer, if you couldn’t tell already: I’m really not a big fan of Medicare Advantage (actually, I go kind of easy on Medicare Advantage in this presentation, compared to some that I’ve seen where people really are super negative) but I try to be kind of middle of the road.
But I just feel that there’s too many restrictions. So I’m not a big fan. I’m a little biased.
So, as we go through this you can keep that in mind. At least you’re getting the straight truth, as far as what you’re facing when you’re looking at these options.
So let’s jump into a basic comparison here, to start out.
We’re going to compare side by side, the most important, need to know qualities about these two options in order to better understand them both and recognize what’s likely the best option.
How much is a Medigap Policy?
Let’s look at cost first.
The Medigap policy is going to cost an extra monthly premium over and above your Medicare Part B, which I already mentioned, the standard premium is $121.80.
And a Medicare Advantage Plan is typically very low or no additional premium, other than what you would pay for your Medicare Part B. So you might be wondering, OK, how much is a Medigap plan?
I ran some sample quotes to include in this workshop and I didn’t want to have a big spreadsheet or anything, so I just ran a couple and just took the average in these two cities.
So at least you can kind of get a ballpark estimate. And, just to let you know, this can vary by state and county, probably in the range of about twenty to fifty dollars. Also, it varies by age definitely (sometimes by male or female).
To save on time, I’m just quoting Plan G, female, age 65 in the cities of Tampa FL and San Diego, CA.
And I promised I wouldn’t be selling or talking about insurance companies so I’m leaving out the insurance company names, and again, this is an average, so of course that means there’s going to be some lower and some higher available than what is shown here.
So back to our comparison.
If you have a Medigap policy, you do need to purchase your drug plan separately, which I touched on a little bit already whereas the Medicare Advantage typically includes your drug plan at no extra cost.
The drug plans range in price from about twenty to fifty (dollars) or more.
I know this sounds good, I just want to interject the fact that the Medicare Advantage drug plan is free or included; the drug costs are going to vary widely so you have to keep that in mind. Just because you don’t pay the extra premium doesn’t mean your costs will be lower, necessarily.
So now I want to mention that the Medigap plans don’t cover anything extra such as dental and vision, and that’s because Medicare doesn’t cover dental and vision so neither will a Medigap. But it’s possible for some Medicare Advantage plans to sometimes cover extras such as dental and vision that Medicare doesn’t cover.
This can be one of the biggest selling points of these plans.
The Medicare Advantage Plans are looking pretty good so far, aren’t they?
- No additional premium
- Includes your drugs so you don’t have to pay for a drug plan,
- Might possibly cover extras
It’s starting to sound like the perfect plan.
These are the main selling points that you might hear about in commercials or see on all those fliers you get in the mail.
But what aren’t they telling you?
Let’s keep going and dig a little deeper.
How about monthly costs, such as copays? With a Medigap plan this becomes extremely predictable.
So if you like predictability, this is great for you.
Remember all those medical costs we went over (that you’d have to pay for the hospital portion, and doctor visits and tests, etc.)?
On the Medigap Plan I quoted, which was a plan G, that all goes away. You just pay your monthly premium and the $166 deductible and then there’s no surprises.
Medigap policies have extremely predictable copays, or no copays at all.
With Medicare Advantage, some copays could be less than what you pay on Original Medicare and sometimes it could actually be more. And also your copays and deductibles can change year to year.
The good news is, at least you get an out of pocket maximum cut-off on a Medicare Advantage, (that’s something), so it’s probably better than having no protection at all.
But the bottom line is that Medicare Advantage Plans are unpredictable because the copays vary and may change every year.
Let’s talk freedom.
This one is huge.
With a Medigap policy you have the freedom to see ANY provider in the U.S. that accepts Medicare. This is because you’re still on Original Medicare.
Remember we went over that in the section on Medicare basics, and your Medigap policy is just an add-on policy? It doesn’t affect your providers at all, no matter what company you go with.
Medicare Advantage plans are typically an HMO, which stands for Health Maintenance Organization. So you must follow the plan’s rules and only see doctors within the limited plan network. Most plans require you to get permission from your primary care doctor before you can see a specialist so that would be called a referral.
I’ve seen these plans try to put a positive spin on this situation, (on these network restrictions), like it’s an asset because they’re managing your care. I don’t necessarily agree. I’ll leave that up to you to decide, and I know it’s definitely not for everyone.
These next two points deal with when you may or may not join a plan.
For Medigap policies, you actually can switch plans any time of year and a lot of people don’t realize this. And, what I mean by switching – I mean switching from one Medigap to another. So it’s not tied in with the Medicare Advantage at all. The thing is, you would have to answer the health questions.
Now, remember, if you’re already on one, you do have total provider freedom already (nobody’s going to take it away from you), it’s guaranteed renewable.
It can never be cancelled as long as you pay your premiums. And the coverage can’t change like it can with Medicare Advantage. But if you’re trying to switch plans, (maybe to save money), there is a chance you wouldn’t qualify to do that because of the health questions. But you can go ahead and apply any time of year. And also the Medigap prices do go up over time (sometimes by age, sometimes, just due to inflation and other factors).
With Medicare Advantage, you’re locked into your plan for a year and you can’t make changes until the fall open enrollment.
And finally, I do have one last comparison point and this is another biggie and it’s another thing no one really talks about.
And that is, when you’re first eligible for Medicare, you have guaranteed acceptance into a Medigap plan, even if you have health problems. This is your Medigap open enrollment period, which is the first 6 months that you’re enrolled in Medicare Part B. Beyond that, you’d have to pass the health questions on the application and you could be denied.
The exception to this is if you enroll in a Medicare Advantage Plan for the first time and you change your mind in the first year.
It would go something like this: So you’re on the Medicare Advantage it’s been less than a year and you just think to yourself ok, I changed my mind, and I don’t like the way I’m getting my Medicare anymore. I just want Original Medicare, plus a Medigap, and at that point you’d still have guaranteed issue to switch back to a Medigap.
Let me just repeat this one more time.
This is the thing that no one really talks about.
I never hear this mentioned in commercials, or see it in advertisements.
I never see this mentioned in the Medicare Advantage training or presentations.
You could lose your right to a Medigap policy, forever.
The reality is, if you choose a Medicare Advantage Plan when you’re new to Medicare, and you keep it for longer than a year, and you later change your mind and you decide you want a Medigap policy, you could possibly NEVER again qualify if you have a dis-qualifying health condition.
Almost everyone I’ve spoken with that’s either new to Medicare or has been on Medicare for awhile, had NO idea that this was true.
So if you decide years later you want to switch after, for example, getting cancer, and you want to see some special cancer doctor that your Medicare Advantage plan doesn’t accept, you CANNOT switch to the Medigap plan because you wouldn’t qualify based on health due to the cancer. What this really comes down to is freedom, and are you going to want total freedom in the future to choose your providers?
Can you really put a price tag on freedom? And you may think, “well, I’m super healthy, I never go to the doctor, why should I pay a monthly premium for something I might never use?”
This happens all the time with other types of insurance, like term life, and auto insurance; a lot of people spend more on their auto insurance than they do on their health care when they’re on Medicare.
The Most Important Question to Ask Yourself
The question you should be asking yourself is “What healthcare scenario do I want for myself 10 years from now?”
Do I really want to risk never qualifying again for a plan that will give me total freedom and the most coverage?
It’s not my intention to sound SO totally dramatic and have this be some sort of scare tactic. I just want to present to you the truth, so that you can know for yourself what is right for you.
You’ve just heard what the majority of folks, new to medicare, NEVER hear or understand, which is, the truth about your options, looking at what is REALLY at stake.
It’s not always about the monthly cost.
It’s about knowing what your limitations might be, based on the decisions you make now.
Listen to your Gut.
And I also highly encourage folks to listen to your gut in making these decisions.
I mean, there’s a lot of information there.
If something doesn’t set right with you, you just know it. And you need to listen to that.
And you know, I’ve come across clients, after hearing ALL the limitations and uncertainties of Medicare Advantage Plans, they are just STILL so happy to join one of these plans, and pay no monthly premium. And they really didn’t care what doctors they used, or how many plan rules and restrictions there were, and that’s ok, (I mean that maybe wouldn’t be me), but the important thing is, that they made an informed choice.
They knew what they were giving up and they were 100% OK with that. And they didn’t lose one wink of sleep over it.
So my job is to educate you to the extent that there’s no hidden surprises. The last thing I’d ever want to do is convince someone to get into a plan that wasn’t right for them, just to make a buck, because that just creates more problems down the road.
Remember I mentioned that helping my mom forever changed how I looked at Medicare Supplements?
It was this very thing that I’ve been talking about, just now, that really came to light when we moved across the country (my mom moved along with us) and she had had a really decent experience on her Medicare Advantage Plan in San Diego.
So I naturally chose another one for her when we moved to Florida, but what we came to find out is that in regards to providers it was a whole different world here. It’s kind of hard to explain, but she just wasn’t having any luck finding doctors she liked. She was facing so many restrictions, even on a PPO Medicare Advantage (which is a whole other story which I’m not going to get into).
Even though she was resistant to paying the monthly premiums on the Medigap, I just knew that it would only get worse as she aged and needed more care.
And what I mean by that is, the older she gets, the more care she might need.
So we want LESS restrictions on providers as time goes on, not more restrictions.
And it’s a big question mark, as to what the future of Medicare Advantage is at this point.
Thank goodness she was really healthy. She was able to pass the health questionnaire and so I switched her to a Medigap Plan before it was too late.
And so I just wanted to share that quick story that I had mentioned earlier on in the workshop about learning from my mom.
Finally, I created a quiz to help you determine what type of plan might be right for you. This could be the most important part of the whole workshop. But before we get to that, I know that some of you may want some additional support when this is over so I just wanted to let you know how you can work with me further, and what you DO get, when you work with me.
And I promised this wasn’t a sales presentation so I just want to make clear that further assistance is totally free, (that actually SHOULD be the case whether you get a plan directly through an insurance company, or an agent helps you), the plan cost should be the same, (not should), it WILL be the same, when you call them up on the phone and say, enroll me in this, or if you call an independent agent.
It’s the same price.
So, so the first thing you get by working with me is pretty obvious: you get additional personalized help for free; we can talk whether you buy something or not, (so you can find out if we’re a fit), and if what I’ve talked about with you today made some sense, it kind of helps that you know me a little bit already, you know what I teach, you pretty much know how I explain things, so that can already give you some peace of mind, knowing what to expect.
And I know that working with an agent isn’t for everyone.
So if you’re looking to rule out working with me, I made this list, (it’s kind of funny), but how to know if I would NOT be a good fit for you.
And, so I would definitely not be a good fit if you prefer to only meet face-to-face, I know some folks prefer that but, obviously my business model is internet based I know that’s not for everybody. I wouldn’t be a good fit if you have an existing agent that you really like and plan to keep working with, although it never hurts to get a second opinion. And number 3, maybe you were planning to find someone locally or maybe you prefer to do all your own research and enroll yourself, in which case you wouldn’t use an agent at all, and I get that, some people are really hands on.
Now on the opposite end of the spectrum, here’s some reasons I’d be a GREAT fit, if you’re looking to work with an agent.
So if you love the convenience of doing insurance online and over the phone, maybe love communicating by email because it’s just really easy and convenient. I’d be a good fit for you if you feel more comfortable consulting with someone, rather than making decisions alone. And, I’d be a good fit if you like the idea of having free one-on-one support with any issues or questions that arise in regards to your Medicare Supplement insurance (that’s long term). And you like the idea of getting a free annual drug plan review. Or, if you just happen to like how I explain things and how I do business.
So, after our Q and A, I’ll show you how you can book with my online calendar, (at the very end) and this is great because you can actually view my schedule for available times. It guarantees a set time for both of us to connect and talk, and avoids the back and forth phone tag. And you’re also welcome to call and email me. So here’s my contact information.
[Check my schedule and book a consultation: http://www.allyseniorbenefits.com/contact-us/]
And you’ll be getting a replay of this workshop in some follow up emails so you can respond to any of those emails to ask a question or book a time to talk. And I want to thank you SO much for sticking with me up until this point.
How to Choose a Supplement (What plan type is for you?)
I want to get back to our quiz. So we’re going to quickly go over how this works so you know exactly what to look for.
And when I came up with this idea for this quiz I was wondering, have you ever felt like you don’t even know where to start, maybe you don’t even know what questions to ask yourself to find out what you DO want?
So I designed this quiz to at least be a good starting point, whether you’re new to Medicare and looking for a plan or maybe looking to change something, about your current situation. This will show you what matters most to you. If you printed out the workbook go to page 10.
We’re just going to quickly go over how this works. This quiz helps you focus on the differences between Medicare Supplements (also known as Medigap) and Medicare Advantage Plans, and allows you to reflect on what is most important to you. The instructions are to check-mark the statements in each list that resonate the most with you. (That just means, when you read the statement, if it’s true for you, or you highly agree, you’d put a checkmark in the box). When you’re done, count the number checked in each list.
The list with the most might be the best fit for you. So we’re going to do a quick example here.
List #1: the statements here are designed to match someone that’s likely to be drawn to a Medigap policy. For example, if you dislike having a restricted doctor network you’d probably be way happier with the freedom of a Medigap policy. (Hence statement number 2 “I dislike the restriction of networks),” so you checkmark that box because you agree with it.
So starting with list number one, you’ll go through each one. If it’s true, put a check mark, count up the total on each list, and hopefully one list has more check marks than the other. Because that will clue you in on what plan might be a fit.
I encourage you to take a few moments as soon as we get done here and go through this quiz.
And I would love to hear some feedback and what results you came up with.
I’m going to go ahead and sign off for today, I know that this has been, quite a long workshop so far and I’m just so thankful that you hung in with me all this time. I’m going to go ahead and conclude the workshop, “Understand Medicare Supplements in 4 Easy Steps.”
So I look forward to hearing from all of you, and continuing to help you in any way I can.
This is Pam Turner, signing off, and I want you all to have a safe and healthy week!