What is Medicare? A basic question. Or rather, why should anyone care about Medicare? The reason people should care is that most bankruptcies are medical bankruptcies. In other words, if you wish to protect your retirement nest egg from bill collectors, Medicare is important to know about. There are few things that are more disturbing than a pile of medical bills sitting on the kitchen table. The golden years could be tarnished with worrying about actual or potential medical expenses. Medicare–if implemented proper–will protect you from a potential catastrophe. It is critical for people entering into retirement to understand what is Medicare.
What is Medicare?
Medicare is a Federal health insurance program for people who are 65 and older (or on Social Security disability). It began in 1965 when President Johnson signed it into law. It was designed to provide medical covered to the elderly at a reasonable price. In 1965, few people had health coverage once they stopped working. As a result, many seniors fell into poverty because of burdensome medical expenses. Medicare was a solution to a national problem.
Medicare is divided into two parts: Medicare Part A and Medicare Part B. Medicare Part A has everything to do with the hospital. It doesn’t cost anything because you paid for it during your working years. It was one of the deductions in your payroll taxes. Medicare Part A covers a 100% of the medical expenses incurred in the hospital, but there is deductible that many people are not aware of. The Medicare Part A deductible is currently $1,288. This is NOT an annual deductible. It is a deductible per benefit period, and a benefit period is 60 days. So each event has a deductible, and the time for the event is 60 days. In other words, you could have multiple events and pay multiple deductibles because the event is not limited to just a 60 day period. Each new event, even if it overlaps with another event, has its own 60 day timeline. While rare, it could happen, and probably more importantly, you could pay the Part A $1,288 deductible more than once in any given year.
Medicare Part B, however, does cost something. For most people going on Medicare and Social Security in 2016, the Medicare Part B premium is $121.80 per month. It is generally taken out of your Social Security check. Medicare Part B covers doctors’ visits and outpatient procedures, such as X-rays, blood work, emergency room visits, etc. Medicare Part B covers 80% of the cost. Your portion is 20%. The 20% coinsurance, however, is unusual. There is no cap. There is no maximum out-of-pocket. Most group plans you were ever on probably had a maximum out-of-pocket. It may have been $1,000, $2,000, even $10,000, but at some point, you stopped paying and the insurance company covered everything. Medicare Part B does not have that, so 20% of a big number will be a big number. You keep paying your 20% coinsurance as long as the bills come in.
These are the basic building blocks to what is Medicare. You must understand Medicare, Medicare Part A, and Medicare Part B to understand the rest that follows. In the next blogs and videos, we will cover how to get Medicare, how to cover the Part A deductible, and how to fill the unlimited 20% gap in Part B coverage.
A number of distressed clients called me because they saw announcements on the news that Aetna and United Healthcare (UHC) were pulling out of individual states and would not be offering health insurance any more. It is true that Aetna and UHC are pulling out of some healthcare plans, but Aetna exits ACA NOT Medicare.
Aetna Exits ACA Not Medicare
Aetna individual plans are on the market place exchanges through the ACA (Affordable Care Act). ACA has nothing to do with Medicare, and Aetna and UHC, which are the largest Medicare plan providers, will continue to offer Medicare Supplement plans and Medicare Advantage plans in all the states. Aetna and UHC Medicare Part D and Medicare Part C plans will not be affected.
Why Are Aetna and UHC Pulling Out?
The plans that are on the exchanges are not inexpensive plans. They are loaded with all types of services. The pricing is also designed to transfer money from beneficiaries who have higher incomes to those who have lower incomes in the form of subsidies. That is why the majority of Americans are paying significantly more for less insurance. At the same time, the number of people on the exchange in health insurance plans are far less than the estimates the government initial provided. The numbers are low for two principle reasons. Fewer people are purchasing the product. Instead they are accepting to pay the penalty. Second the employer mandate was weakened and delayed each year by the president. The result is that less people were pushed on to the exchanges than anticipated. The overall result is that insurance companies who administer the ACA plans on the exchanges have consistently lost money each year. The share holders and boards decided to stop losing money by pulling out.
This has no direct affect on Medicare and your individual plans, even if it is an Aetna or UHC Medicare Supplement plan or Medicare Advantage plan. Aetna exits ACA NOT Medicare.
More Than Medicare Supplement Plans
I help people sign up for Medicare Part A and Medicare Part B. We go to Medicare.gov and run their medications. I check to make sure their doctors and hospitals are in network for the Medicare Advantage plans. I explain their Medicare eligibility and show All the Medicare supplement plans, Medicare Advantage Plans, and Medicare Part D Plans, but there is much more to being an independent insurance agent who offers Medicare insurance. It is about a long term relationship with my clients. It is more than Medicare supplement plans.
Losing a Medicare Client
I recently lost a couple of clients. They passed away suddenly. I happened to have spoken with one of them a few days before her passing. She had called about some photos she had seem on my personal Facebook page. It is painful when a client dies because I get connect with my clients, especially over time.
More Than Apply for Medicare
The recent loss also reminded me of the nature of my relationship with my Medicare clients. It is a relationship that is meant to last over time. It is more than helping them apply for Medicare. I tell my clients when I enroll them that this is a relationship until “Death do us part.” I will be checking in on them every six months to make sure their plan is working well. I check in especially during Open Enrollment Period when beneficiaries may make changes to their plans. I want to make sure that clients have the best possible plan that fits their needs at the best possible price because we know three things for certain. Medicare will change, the Medicare plans will change, and their needs will change. I want to be on top of those changes for them.
If you want someone who will take care of your Medicare needs over the years, give us a call 402-614-3389.
Delay Medicare Enrollment
Many people work past 65. They continue on with them employer group coverage. They delay Medicare enrollment. At 66+, they wonder what to do about Medicare.
How to Enroll after 65
Here is what to do. Go to Medicare.gov. Click on “Forms, Help, Resources” on the top right. Then click on “Medicare Forms” on the left middle. You will see the enrollment forms in the middle of the page in PDF form. There are two forms: one to enroll in Medicare Part B and a second for your employer to sign off on your coverage. You fill out the enrollment in Part B. Give the second form to your employer. Your employer will verify that you have had health coverage as good as Medicare since you turned 65. They will sign the form. It is important for you to write in the date that you wish your Medicare Part B to start. Give yourself enough time to find a Medicare plan and prescription drug plan. (There are much shorter and restrictive time limits when you have delayed Medicare Part B enrollment.) Drop the forms in the mail or hand deliver them to the local Social Security office.
Medicare Employer Enrollment Forms
Why do you want to involve your employer with your enrollment in Medicare Part B? If you do not have your employer verify that you had health coverage from the time you could have enrolled in Medicare until the time you did take Part B, Medicare will assume you did not have creditable coverage and will asset a penalty. The penalty is a 10% increase in Part B premium for every year you did not have coverage. That can be significant over time and completely unnecessary. Delay Medicare enrollment at your own risk. Get the form. Your employer is required to verify. The human resource department will know exactly what to do. It is a very simple matter.
At Omaha Insurance Solutions, we help clients who delay Medicare enrollment all the time. We can get this done quickly and easily. Give us a call 402-614-3389. We can email you the forms, walk you through filling them out, and explain what to do.
A distressed prospective client told me that Medicare did not cover mental health treatment. I stammered a bit because the subject had never come up before, and I was surprised. I said that it did. She had read that it only covered a one time welcome visit to Medicare. I then showed her in the Medicare & You Handbook on pages 40 and 59 where it detailed the coverage. There is the welcome to Medicare screening, an annual screening, and complete medical coverage. She was surprised and relieved there was Medicare mental health care.
Seniors Need Mental Health Care
Mental health is a serious problem in society, and it is growing among seniors. The World Health Organization documents how important among seniors this issue is. Depression is under reported, little recognized, and often an untreated illness; but Medicare mental health cares for beneficiaries with mental health concerns, like depression. It probably does it better than most employer plans do.
Medicare Mental Health Part A
Medicare Part A deals with the hospital. The same rules around hospital deductibles and co-insurance apply to psychiatric hospitals as to other hospitals. There is, however, one difference. Medicare only allows a lifetime amount of 190 days for a stand alone psychiatric hospitals.
Medicare Mental Health Part B
Medicare Part B covers psychiatrists, counselors, treatment groups. Again the same 20% co-insurance applies as to any other Part B doctor visit. If you have a long standing relationship with a psychologists before Medicare, you may keep that relationship going after you go on Medicare if the medical professional takes assignment for Medicare.
Medicare Supplements will cover Medicare mental health issues and professionals the same as other fees in accordance with your particular Medicare supplement plan. Medicare Advantage will have the same co-pays for psychiatrists and psychologists as for other specialists.
No need to be stressed or depressed about Medicare mental health. You are covered.
Medicare Quote Honesty
People ask for Medicare quotes from insurance agents and companies, but people really don’t know what they are asking for or what they should be looking for. It’s not your fault. You only enroll in Medicare once in a lifetime, so its hard to be an expert. Here are some tips when you are asking for a Medicare quote.
Medicare Part D Quote
How do you know that the agent is showing all the Medicare Part D plans? Make sure she is showing you the Part D plans on the Medicare.gov website. There will be a number indicating how many plans are available in your state. When she proceeds to the page with the quote, all the plans will be listed in order of cost to you beginning with the least. Make sure she enters ALL of your medications and they appear on the medication list. That is how you know that you have a real Part D quote.
Medicare Part C Quote
How do you know that the agent is showing all the Medicare Part C plans? Again there will be a number on the Medicare.gov quoting mechanism indicating the total number of plans in your area. When you proceed to the list, they will be listed in the order of the plan most favorable to you in terms of the medications listed. It may or may not be the best plan when looking at the medical side.
Medicare Supplement Quote
How do you know that the agent is showing you all the Medicare supplements? You see the usual companies, like United Health Care, Aetna, and Blue Cross. What you should also see is a number of lesser known companies. Many of those companies will be the lower cost plans. Some agents don’t include the lower price plans because they get paid less. If you see a number of unfamiliar names, that is good. You are probably seeing a complete list of supplements
Call us at Omaha Insurance Solutions 402-614-3389 for a quote. We will show you everything. We are not concerned about selling you one company over another. We are concerned about you getting what is best for you.
The Big Lie
The “Big Lie” is a phrase and idea that Adolph Hitler and then Joseph Goebbels promoted in their propaganda war. They observed that if you told a lie about the opposition, made the lie an outrageous claim, and repeated the claim, people would believe it. This technique existed before the Nazis and will continue on to the end of time. Some politicians and sales people are particularly adept at this technique. Center for Medicare & Medicaid Services (CMS) refer to phenomena such as this as Medicare scare tactics. CMS dictates client and agent interaction and strongly discourages insurance agents and companies from engaging in Medicare scare tactics.
Medicare Scare Tactics
Some insurance agents who offer Medicare supplements and plans use Medicare scare tactics to promote their themselves and their products. They will make outrageously negative claims about opposing companies, products, or agents. “That company had a 40% rate increase.” “That company uses lower initial rates; then jacks them up when you are older.” Some agents who only offer Medicare supplements will dump on Medicare Advantage plans. “Those co-pays will bankrupt you.” Some agents who offer Medicare Advantage plans exclusively will rip on Medicare supplements. “Why waste your money on premiums when you hardly go to the doctor.” I’ve seen agents falsely accuse another agent of illegal or unethical business practices. “He is not even properly licensed” or “he got himself into trouble.” The more outrageous the accusation, the more it is believed by some.
Counter with Facts
Facts, however, are stubborn things. To counter Medicare scare tactics, ask them to show you the facts from a reputable third party source. I show my clients the insurance company’s history of rate increases. I show clients BOTH supplement and advantage plans side by side. They make the determination which is better for them. All licensed insurance agents are listed on the insurance department website by all states. You can check them out and see if that person has any complaints. When a person makes accusations, have them produce the evidence.
Scare Tactics are Flashing Signals
Medicare scare tactics, a.k.a., trash talk, is a signal. It is like someone who gossips about a co-worker. You know they will be gossiping about you when you walk away. Agents who talk trash about other companies, agents, agencies, and products don’t really have something better to offer. There is no need to talk someone or something down if you are offering something better. Let the facts speak for themselves. The process of selecting a Medicare solution should be an educational process, not propaganda.
If someone is trying to scare or rush you, they probably don’t want you to really see who they are or what they are offering. Cut through the noise. Brush aside the smoke. Look for the facts. “The Truth will set you free.”