Brad Allan’s

Retirement Planning & Life Insurance Series

Protecting Your Health & Wealth: Why you shouldn’t outlive your money.

Medicare Supplements

 Medicare has 4 parts: A, B, C, and D. There are gaps in the insurance provided that could leave you exposed. We have insurance options to cover these gaps and keep you safe.

Do not leave gaps in your medicare coverage. Unless you have credible care, you MUST sign up for MediCare. There is no good reason to leave a gap in medicare.

If you do not have Credible Care–healthcare provided by your employer–contact us to set up a complimentary consultation with a MediCare specialist to learn more about your options and make sure you’re covered.

Explaining The MediCare Gap.

Within 6 months of your 65th birthday, you’re probably thinking about retirement.

MediCare Supplemental Insurance is for everyone as they’re approaching their 65th birthday. It has 4 parts: A, B, C, and D.

This insurance is designed to cover gaps in MediCare–places where it falls short and doesn’t meet many people’s needs. 

We cover the gaps in Medicare.

 THE HOSPITAL. 

Part A is the hospital, which is free if you’ve worked 10 years or 40 quarters over your lifetime and paid your taxes.

What’s NOT free is when you go into the hospital–there’s a deductible. As of January 2020 the deductible for Part A is $1,408 per event. There is no limit to the number of events per calendar year.

An event is both time-based and contextual. When you go to the hospital and why you go to the hospital determines an event. An event lasts up to 60 days.

We cover the gaps in Medicare.

Explaining The Medicare Gap & Credible Care.

Example: Your doctor says “you have pneumonia, you have to go to the hospital.”

Prior to going to the hospital, Part A was free. The moment you walk in the door of the hospital, it becomes an “event” which will have a $1,408 deductible. 

If you’re in the hospital for 3 days, and they send you home, then in 10 days you go back to the hospital because you feel worse, as long as you’re going back to the hospital for the same reason with a 60-day period its considered the same event and you do not incur another deductible of $1,408.

If you go back on day 61, it’s a new event and another $1,408 deductible. If you go back 13 days later because of a car crash, it’s a new event–because it’s not related to pneumonia.

You MUST sign up for MediCare in your 7-month window, which starts 3 months before your 65th birthday month or LOSE 10% of your Social Security Benefits for LIFE.

If you’re still working with healthcare from your employer, you can defer part B of MediCare while you are still working. That’s what “Credible Care” is–healthcare covered by your employer.

THE DOCTOR. 

Part B is the doctor. Part B is a $144.60 monthly premium from your Social Security Benefits. You HAVE to sign up for MediCare during your open enrollment period, or you will lose 10% of your Social Security Benefits for life. 

The initial or open enrollment period for MediCare is 3 months before your 65th birthday month, your birthday month and the 3 months after. The window itself is 7 months long.

This is NOT a carrot–it’s a BIG stick. You will be penalized if you do not enroll in MediCare.

The ONLY exception for signing up for Part B outside your enrollment window is if you are receiving Credible Healthcare–”Credible Care” from your employer. This is also known as “Deferring Part B.” 

There’s also a one-time annual deductible of $198. This is paid before MediCare pays it 80% of the doctor’s bill.

“Credible Care” and Co-Insurance (vs. Copay)

If you’re employed and you have health care that you’re paying for out of pocket (healthcare NOT from your employer), then you HAVE to go on MediCare. This is because it’s not considered “Credible Care”–healthcare paid for by an employer.

The Part B premium–the $144.60–is to have access to a physician. That’s it. MediCare then pays 80% of your healthcare cost. You pay 20%. It’s not a co-pay. A co-pay is a dollar amount. co-insurance is a percentage. 

Example: When you go to the doctor and you have a co-pay of $50, that’s a dollar amount. When you have an open heart surgery bill that is $100,000, MediCare will pay $80,000 and you pay $20,000. That is the biggest, scariest gap in MediCare. 

THE DRUGS.  

Part D is the drugs. You have to be on a drug plan whether you are taking mediation or not. If you do not sign up for a drug plan, for every month you are not on a drug plan outside your open enrollment window, you will have 1% of your Social Security Benefits deducted until you are on a drug plan. This is NOT a carrot–it’s a little stick.

 

THE PLAN. 

Part C is the pay-as-you-go plan — We skipped over this on purpose because this is not original MediCare–it’s a provider’s version of MediCare. It covers the gaps in MediCare–deductibles, co-insurance and drugs. A MediCare Advantage Plan means you go to a particular doctor’s providers and facilities. You’re in a network. A HMO or PPO.  A Health Maintenance Organization that does preventative care, or a preferred provider organization. 

Do not go outside your network, unless it’s an emergency. If you’re having an emergency, go to any emergency room, those things are covered–an emergency room visit is the only exception. For an emergency room visit, heart attack etc–there will NOT be out-of-network charges.

MediCare Advantage Plans can be $0 monthly premium plans. You still must pay your Part B Premium. MediCare Advantage Plans include physician, vision, dental, and drugs. They have co-pays and coinsurance that vary by condition. 

There is a limit to how much you can pay per year with an Advantage Plan that varies by state. In Washington state the maximum out of pocket for an Advantage Plan is $6,500. Basically it is a pay-as-you-go plan.

(( Back to that open heart surgery procedure that cost $100,000, with $80,000 paid by MediCare plus $20,000 owed by you.

In Washington State, your maximum exposure would be $6,500. This the pay-as-you-go plan.

The other way to cover the gaps in MediCare is with a MediCare Supplement. You can not have a Supplement AND an Advantage Plan–it’s either / or, not both.

The difference between an Advantage Plan and a Supplement is that a Supplement is a fixed cost each month. You pay a fixed price to cover the deductible in A, and the coinsurance in B. 

The Supplement does NOT include vision.It does NOT have dental. It does NOT include a drug plan. The supplement does NOT have a network. The Supplement does NOT have any copay or coinsurance. It is a predictable monthly healthcare spend. It’s important to note that you have to have Part B to have a Supplement.

Back to that $100k open heart surgery. How much do you pay if you have a $100k surgery bill? You pay you MediCare Supplement monthly Premium. (The G Plan in Washington State is between $190 – $204 a month.) You could have a heart attack every day, and you would still pay the same monthly MediCare Monthly Supplement premium.

=56THE WHY: Healthcare Supplements = Predictability & Flexibility.

The #1 reason to have a Healthcare Supplement is predictability— because you have a predictable monthly spend–you know exactly what the costs are.

The #2 reason is flexibility--you can go anywhere you want to go. INCLUDING internationally–there’s no network. There’s no referrals.

The reason people go on an Advantage Plan is because there can be no cost for your monthly premium. At first glance, it looks affordable and low-cost. If your doctor is in the Advantage Plan Network, or if you don’t care who your doctor is, this can work out fine.

In my humble opinion, there’s no reason to leave any gaps in MediCare. In the Advantage Plan, it will cover the gaps, but you will participate in co-pays and co-insurance, and they will cap you at $6,500 annually in Washington State. Some people think this is fine, they rarely go to the doctor, but if you have the funds, you’ll always know what your spend is and you’ll always be able to go where you want if you have a Healthcare Supplement.

Go see your opthamologist or dentist and they can give you a VSP or Delta Dental Plan, then get one, it’s $30-$40. If they say you don’t need it because you only go every couple years, then you don’t need it. 

Since Supplements are stand-alone, you need to have a part D plan for drugs if you have a Supplement. Drug plans cost $24 to $56 per month for a Stand-Alone Drug Plan to avoid the 1% penalty. Your medication costs are in addition to the monthly payment, but they are significantly smaller in comparison to the Advantage Plan. You will pay LESS for your monthly prescriptions if you’re on a Stand-Alone Drug Plan. 

Last But Not Least… 

The last thing about MediCare is that there are certain times you can make changes to your MediCare plan. The first term is your open enrollment period–they give you 7 months. Unless you have Credible Care, don’t miss your window. 

You can make changes to your MediCare plans once a year: October 15 to December 7th, every year. You can make as many changes to your plan during that window as you want. 

On December 7th, whatever plan you’re in is the one you stay in.

The ONE EXCEPTION is that if you’re in an Advantage Plan on December 7th that you don’t like, from January 1st to March 31st of the following year, you can change ONE TIME from one Advantage Plan to another Advantage Plan. 

If you’re on a Supplement, you have to stay on that Supplement until October 15 of the following year.

Again, here’s when all this happens:

Open Enrollment Period “OEP” 
When you turn 65.

Annual Enrollment Period “AEP” 
October 15 to December 7 each year.

Special Enrollment Period “SEP”
For the Advantage Plan, a one-time change can be made from Jan 1st to March 31st.

3 Exceptions. 

There are 3 more Exceptions to the rules:

1. Moving. If you’re in an Advantage Plan and you change zip codes that move you out of a provider’s’ network to another place, for example if you move to Florida from Washington, you can make a change. That’s an SEP–special enrollment period.

2. Poverty. Another window is if you go on to MediCaid. You can apply for a “Dual Plan” so that you’re on both MediCaid and MediCare.

3. Sickness. Another is if you become really sick and have a special need from a health perspective–if you’re diagnosed with renal failure, for example–you can change your plan, as this is another SEP–special enrollment period.

3 Gaps.

There are 3 gaps in original MediCare: 

1. Part A deductible

2. Part B deductible

3. Part B co-insurance

We cover the gaps in MediCare insurance with either an Advantage Plan or a Medicare Supplement.

Only you can decide what’s appropriate for you to do. 

We do not work for the government. We are not with Medicare or MediCaid. We represent four insurance carriers that provide MediCare gap coverage via Advantage Plans and Supplement Plans in Washington State. They are big networks, typically we can find anyone’s physician within a network.

We are licensed, trained & bonded independent agents representing healthcare insurance companies to cover the gaps in MediCare. We can offer you information to help you make your decision.

Do not leave gaps in your MediCare coverage. Unless you have credible care, you MUST sign up for MediCare. There is no good reason to leave a gap in MediCare.

If you do not have Credible Care–healthcare provided by your employer–contact us to set up a complimentary consultation with a MediCare specialist to learn more about your options and make sure you’re covered.

Our Offices

1455 NW Leary Way, Ste 400
Seattle WA 98107 

19570 Amber Meadow Dr, Ste 150
Bend, OR  97702

Contact Us

Brad Allan
(206) 495-5579
Brad.Allan@FFLEmeraldCity.com

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