Signing Up for Medicare

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This is the Truth Network. Welcome to Finishing Wealth, brought to you by CardinalGuide.com, with certified financial planner, Hans Scheil, best-selling author and financial planner, helping families finish well for over 40 years. On Finishing Wealth, we'll examine both biblical and practical knowledge to assist families in finishing wealth, including discussions on managing social security, Medicare, IRAs, long-term care, life insurance, investments, and taxes. Now, let's get started with Finishing Wealth.

So, have fun today on Finishing Wealth with certified financial planner, or Hans Scheil, my certified financial planner, Hans Scheil. Today's show, I know all too well, is signing up for Medicare. You've just been through this. Yeah, it's a process. And so, you know, as we're thinking about the biblical application of signing up for Medicare, and I make, you may notice that, you know, not even in Proverbs is Medicare mentioned. But I was thinking about that there's a process. And the sad truth is knowing Robbie, the procrastinator that I am, had I not met my friend here, if I was completely vulnerable, I would say, chances are, here I am a month before I have to sign up for social security, comes into effect for me.

I'll be 65 next month. I would not have even glanced at the book. I wouldn't have gone to the website. There's nothing that I would have done in preparation for this event. I would have totally ignored the process.

And as a result, honestly, knowing what I now know, I mean, there are fines involved, all sorts of things I might have regretted those decisions for the rest of my life. And so, you know, there's a story in the Bible that kind of illustrates this wealth from my perspective, Hans. And in the book of Esther, right, here's this young lady, and she gets a chance to marry, you know, the king of the Medes and the Persians.

You know, Artaxerxes, you may know the story. But the interesting thing about that story is you just don't get a chance to go into the king without a process. And so, the process for Esther was she literally had to go through a year of beauty treatments, a year. And the Bible goes into great detail of all the treatments that she had to go through before she even got to see the guy, right, before she had a chance at anything. But as a result of her going through that process, and as a result of her praying through that process, and good counsel, from my opinion, from her uncle, she had her own little Hans Shiel right there, Mordecai, to help her out along the way.

But because of that, you know, she literally saved the entire, with the help of God, clearly, you know, the entire Hebrew, you know, consulate that was, you know, there in the area at the time, because they were all going to be killed. So, we live in a fast food culture, and we expect things like, we're just going to get this immediately. But there's just more to this signing up for Medicare than what I would have ever dreamed. And so, we thought it was a worthwhile thing, didn't we, Jay? To spend a little time to go, okay, I know everybody isn't coming to this point, but because of something you may not have had happen at the point when you did sign up for it, or when you do sign up for it, I think this is going to be extremely helpful. Yeah. Well, and so, signing up for Medicare is not necessarily that simple. I mean, because you got four parts to Medicare, and you can sign up for them at different times, and you say, well, why would I want to do that? Well, stay tuned.

Yeah, really. You might have to do that. You might want to do that. And what I find is, is that the average consumer is going to rely upon the people calling upon them to sell them insurance as their source of information about Medicare and Medicare insurance, okay? So, a lot of people just basically wait for people to start calling them, mailing them, showing up at your doorstep, whatever.

And then they don't let most of the people in. They don't talk to most of the people, but somebody's going to get through to them. And then it's that person and their explanation of Medicare that a lot of them are going to base their decisions on.

They're also, if they worked with a bunch of people, and then some of the people are a little older than them, they maybe are going to go to them and find out what they did, or if their spouse is older than them, then they're going to use their experience. So people don't really research this stuff very well, in my experience. And when they do attempt to research it, they do it with the people selling Medicare supplements or Medicare Advantage plans, and maybe they talk to several of them. But, you know, and I am one of those people, so I don't want to start trash talking trash talking people that sell Medicare supplements or Medicare Advantage plans, but I'm going to tell you is you're not going to necessarily get a very good education about Medicare and what you ought to do about signing up from those people. You're just not. And I am going to say, this sounds a little self-serving, you are going to get that from me. Darrell Bock Yeah, well, that's, it's clearly been my experience that, you know, in order to make any of those decisions, you got to make some sense of alphabet soup. But also, it just begins with, you got to be a little bit armed with what you're going to do with your Social Security before you even go, because, you know, one of the first questions they're going to ask you as you begin this process is, you know, are you are you doing this under Social Security, or are you are you doing this outside?

John Green Right. So you need to, is taking Social Security at 65 is early for somebody right now. I mean, your full retirement age is 66 and two months, even though you're turning 65 right now. Now, your father, when he turned 65, that was full retirement age.

But, you know, that's another day, another show. So if you were going to take your Social Security at the same time you sign up for Medicare, you're going to be taking it early. Or if you've already taken your Social Security, like you took it back when you were 62 or 63 and you're getting a regular check, you don't have to worry about signing up for Medicare, because they're just going to sign you up automatically. They're going to assume you're retired, assume you want it, and mail you a card and sign you up for Part A and Part B. And they're going to start taking the premium, the monthly premium, which is $144.60 a month for most, they're going to just start taking that out of the Social Security check that you're already getting.

Now, that's fine and good. Most people turning 65 are not getting their Social Security check yet. They're either not retired, like you, they're still working, or they are retired but they're still waiting until full retirement or beyond to take their Social Security check. So if the Social Security Administration, they kind of know about you, but they're not going to automatically sign you up unless you're getting a Social Security check at the time you're turning 65.

Right, which just, you know, there's the first, from my perspective, thing that I was not aware of. Like, if you don't sign up for Medicare when the time comes, if you are in fact not on some kind of health insurance, there could be a fine. Yeah, there's going to be penalties.

We see that a lot. And we see these people when they're 75 years old and they didn't sign up for Medicare at the right time, or they didn't sign up for Medicare Part B, or they didn't sign up for Medicare Part D, and it was several years. And now, after they're obviously signed up by now, they're paying a fine every month. They're lifetime penalties and they're going to pay that as long as they're alive.

Once that penalty's set, it's going to stay there. There's no getting rid of it. Yeah, I got a close relative who just simply let their Part D plan lapse.

You know, they weren't getting any drugs. I don't really need this. I'm going to quit making the payments on it. And next thing you know, boom, for the rest of their life, you know, they're paying penalties because they didn't think their Part D plan was, which is the drug part, which we're going to get a lot into these alphabets here in a minute. But there's consequences to all this stuff. So, it's definitely worth, from my perspective, going into the process as a disciple. Like, you know, disciples are enthusiastic learners. What can I learn about this process? As Esther went in to see the people that were going to help her become more beautiful, you know, she became a disciple.

She learned, what do I need to do in order to prosper during this process? Yeah, so, you know, Medicare has four parts to it. Part A, Part B, Part C, and Part D. And they all do different things.

Okay? Now, you have what's called original Medicare. And that, just by its name, you know, it's Medicare since 1965 or when it was first started.

And they're pretty much unchanged to the present day. Part A and Part B are original Medicare. Part A is your hospital and skilled nursing. Part B is your doctor and outpatient or medical. So, and you need both parts if you're going to rely on Medicare for your insurance, for your health insurance. It's kind of like having half a policy if you only got Part A and it pays your hospital bill. But it's not going to, you need Part B to pay the doctors who are waiting on you and lab tests and outpatient surgery, all that kind of stuff. So, Part A and Part B, you don't necessarily sign up for them at the same time.

Now, in your case, you're still working. And the first of the month before your 65th birthday was October 1st. And then you back the clock up three months because you can't do this more than three months in advance.

So, July 1st was the first time you were eligible to actually push the buttons on the computer to do it. And because you're still working, if you would have continued your current group insurance, you would have only signed up for Part A and you would have deferred signing up for Part B. And you would have deferred for a couple of reasons. There's one, you don't need Part B if you kept your group insurance. It's like you're paying for two insurances. And then Part B costs $144.60 a month.

Why pay that and pay your insurance too? Now, some people do that, though. They sign up for A, they pay, you know, sign up for B, and then they're paying for B, and they have group insurance, and they keep working. You know, they're the signer-upperers. I mean, there's some people out there sign up for everything.

You send it to them, they sign up for it, okay? It's not necessarily that smart because if you signed up for B and you didn't yet apply for a supplement, which you're going to need to do if you're on Original Medicare A and B, you're going to need to buy a supplement, and you've got a six-month open enrollment period that is granted to you by the government, but it's provided to you from a private insurance company. And, you know, in your case, you bought Mutual of Omaha selecting off a list. Mutual of Omaha asked you no health questions because you're within six months of the date you signed up for Part B. But if you had somebody that kept working, stayed on their group insurance, but signed up for A and B, and then you had all three of those things rolling along, you would have been paying for two insurances. And then when you later retired and lost your group insurance, you wouldn't have had open enrollment under Part B because it was more than six months ago. So there's all kinds of intricate details in this signing up.

It's different for everybody, and mistakes can be costly. So we got a lot more of the process of signing up for Medicare today on the show with Finishing Well with certified financial planner, Han Shyle. We have so much more coming back. And in fact, you know, what a delight it is personally, I'll share, you know, some of the coverages I now have that I haven't had, you know, since I was a kid. And so there's some really good things coming because, you know, we get to last week's topic, no pain, no gain. Well, there's some pain with Medicare, no doubt. Some pain I'll share with you, but there's phenomenal gains I'm looking forward to.

Stay tuned. So welcome back to Finishing Well with certified financial planner, Han Shyle. As always, we want to tell you that cardinalguide.com is how you reach out and touch Hans. His email address is there if you want to buy the book, The Complete Cardinal Guide to Planning for and Living Retirement, or just ask Hans for the book. I mean, all that information is very, very inexpensive if you want to buy it.

All this stuff is in that book. That would be really, really helpful. But today, as we talk about in today's show, you know, the steps to signing up for Medicare, you know, you're getting a first-hand experience.

It's just recently been through this. And certainly, there's some things I'm looking forward to as far as health coverage that really, in today's age with regular, you know, health insurance, you can't have the kind of coverage or I sure didn't have anywhere close to the coverage that I'm now looking forward to, which itself makes it, you know, kind of worth what we've gone through, not to mention that it's a whole lot less expensive than the group insurance I was paying for anyway. Sure. There are benefits.

Yeah. And so let's talk about original Medicare part A and part B, okay, is that most people are going to want to sign up for part A when they turn 65, whether they're working or not, or they're covered under group insurance or not. For the main reason is if you're entitled to it, if you've got your 40 quarters in and you've done all the things that most people have, or your spouse does, and you're entitled to it, you might as well go ahead and sign up for it, even to work with your group insurance because it comes at no monthly cost to you. So, you know, it's essentially free for your retirement.

Now, so you're going to want to go ahead and sign up for that. Part B is a little bit different because there is a monthly cost. Which, by the way, as I found out, they bill you for in one lump sum requirement, and here it comes, $433.80, I think it was, that like you're going to have to pay this in advance that very first quarter, which was a little bit of a shocker.

Yeah. I mean, it's $144.60 a month, and they're going to bill you quarterly. And so, you know, you put that together by the year, it's, you know, $1,700 to $1,800 a year out of expense. Now, it's well worth it.

Oh, my goodness. And if you're a high income person, another show, we'll talk about IRMA, Income Related Monthly Adjustment Amount, IRMAA. And if you make a high income in retirement, you're going to pay a lot more than $144.60 a month. And depending on how high that income is, we'll talk about that another day.

Or if you fit in that situation, and you want to call me and talk to me about it, I'll be more than happy to counsel you on that. And there's some things we can do to work with an IRMA thing or to file an appeal. But part B is you're only going to want to sign up for it when you're ready to rely upon Medicare as your only insurance. And if you have group insurance from work, and you're not paying a lot for it, which wasn't your case, you're all paying a lot for it. But if you are not paying a lot for it, well, then you may want to just stay on your group insurance, have your part A and defer on part B. And then if you do all that properly, and your group insurance qualifies, then you can later sign up for part B, when you actually need it, when your group insurance ends, like when you retire or reduce your hours, reduce your hours or whatever, whatever goes on.

So there's a big if there about part B. And the reason we're talking about this week is the subject this week is Social Security. And we talk about Social Security every seven weeks. And where you sign up for Medicare is with the Social Security Administration. And you go to the same place that you sign up for your Social Security check.

So you're going to need to be real careful when you're doing this yourself. And we counseled you before you went in there. And we also told you if you get in there, and you have any concerns, just kind of stop where you are and give us a call.

And we'll, we'll go through that. Because they're going to flash those first questions at you really quick, like, are you wanting to start your Social Security? And since I've been counseled, no, don't do that, because I need to wait till I'm 70 on that.

No, I just want to sign up for Medicare. And I already knew that I wanted part A and part B. You know, that was something that I knew.

So it was not at all difficult to get through that part of the process. And I don't think it even asks you if you want A. I think it only asks you if you want B. Is that right? That's right. So that's another confusing point about it. So, and actually, if you wanted A only, I don't know how you do that online. So you might have to call them.

But in any case, most people are going to do like Robbie did. They're going to call three months in advance, or they're going to go on the web. Call us before the three months in advance if we're going to tell you all and advise you what to do. You go on, you go on online, and you... Yeah, and let me tell you why it's kind of helpful to have done that, because you got a bunch of cards coming. I mean, in order to get ready to go on to Medicare, you got to get a Medicare card.

In my case, I got a Medicare supplement. I got a part D plan, which we're going to get to in a minute. You got to have all these things and kind of understand what you're doing before you, and not to mention get my health insurance stopped in October.

So this is a season that you're now in. And it takes a little time to get all this stuff lined up. So when I run into somebody that's becoming a client for the first time, and let's just say they're 70 years old, and I'm trying to figure out like what happened retroactively.

And a lot of times you can just look at people's stuff and talk to them a little bit, and you can pretty much they were like you. They signed up for A and B. They're not really sure how they did it, but they got it. They got the card.

You can look at the dates. And then they bought a supplement. They have a drug plan.

And it's really not necessary for me to figure all that out retroactively. But when I look at their Medicare card and I got different dates, different signups, maybe I see some penalty or they're talking about the penalty. They don't understand that. Their supplement has lapsed. Maybe they're on a Medicare Advantage plan. We're running into some of them that have a Medicare Advantage plan, but they've never canceled their supplement that was replaced and never understood that. And a lot of people, when we run into them for the first time, they didn't get counseled back when they were 65. They just kind of took this stuff as it went.

Most of them end up okay, but they have a real hard time explaining all this in reverse or even telling you like where they are and why they're there, okay? And I'm trying to figure all that out because I got to get some context before I advise them going forward. And so the thing I want to, you know, it may sound like we're making a bigger deal out of this than it is, is you sign up for A and you sign up for B and you do that only if you don't have group insurance somewhere else for work primarily. You sign up for A and you sign up for B and you do that through the government and social security website. If you pay the money for the part B, you're paying that money to the government. You're not sending it to an insurance company, but that's all you sign up for with the government is part A, part B, original Medicare. Now let's move on to part C. So where do you sign up for a part C plan?

I think you know the answer to that, Robbie. So where do you sign up for part C? In my case, I didn't or do I want to for reasons that we may go to in another show, but part C is where the independent insurance company is going to take your Medicare and you will no longer be on part A and part B. And so that would be like Humana, one of those companies that is going to administer your part A and your part B and they're going to give you a free part D plan. But that was something I did not want. So you're going to be called by hundreds of people.

Yeah. You're going to get, it's hard starting in about two or three weeks not to trip over these people because they're going to be on TV, they're going to be on the radio, they're going to be at the church doing seminars, you know, and they're typically not going to be somebody that says, Hey, we offer five different part C Medicare advantage plans. But if you're turning 65 and you're signing up for Medicare, you can't immediately start at Humana and sign up for a part C. Before you're going to do that, you got to go to the government, to the social security administration and sign up for part A and sign up for part B and pay for part B. Then when you go to the insurance company, now you're in the right place to sign up for part C. And you say, well, what is that? Well, what you're electing and you're electing this, you're giving the government permission essentially to outsource your Medicare or to receive your Medicare from Humana.

Okay. So you fill out a form with Humana or you do a thing over the web or on the phone and then Humana will now send into the government, say that Robbie is now covered by us. So we're going to give him his Medicare benefits.

You don't have to anymore, Mr. and Mrs. Government. And the government is going to send you, send Humana a check every month to be rid of you. I mean, essentially, or to, they've outsourced you. So Humana is going to get paid to deliver the benefits to you.

Right. And unfortunately, a lot of people go to whether it's a Humana salesman or United healthcare salesperson or a Aetna salesperson or a Wellcares. I mean, there's a whole list of these companies that, that for a lot of folks is their source of information for education about Medicare. And so, I mean, you could very well end up with one of these and be fine. Now, what I'm going to tell you is a part C is really nothing more than getting your part A and part B from a private insurance company. And we'll get into on another show, like why you would want to do that or not want to do that.

In my case, not want to do that. Okay. Correct. Now part D, you know, it's just coincidental that it stands for drugs. It's prescription drugs. So the part D of Medicare, you again get it from a private insurance company and you don't enroll in part D directly through the government. You do it with a private insurance company. And if you got one of these part C Medicare advantage plans, they typically include a part D plan.

It's all part of the package. Now, if you don't go on part C, if you just stay on original Medicare part A and part B, then you would, you would need to purchase a separate part D plan. And the point I want to make is that most businesses that are in the business like us of selling Medicare supplements or Medicare advantage plans, part C and part D, they only represent one or the other. So you've got your Medicare supplement people and then you've got your Medicare advantage people, but you don't have too many people that do both. And then within the Medicare advantage, typically this is offered by one company. So you've got the Humana people and you've got the United healthcare people and you have to go to all these separate people to learn about all the different plans. And so what we've done is we provide you the consulting, cause this is different for everybody depending upon their situation, about Medicare first and get you all lined up with your Medicare properly first. Then we talk about insurance. And when we do talk about insurance, we help you make the decision whether you're going to go the supplement route or you're going to go the Medicare advantage part C route. And then once you make that decision, then we're going to decide which company you're going to get that through. And we represent most of them on both sides of the equation.

That's a sweet thing. But the thing we don't want to miss out or I wouldn't want anybody to not understand is that, wow, here we are, we're at this process. So by going to an insurance company, which you kind of have to because you sign up for part A, part B, but if you don't do something apart part D, then you could face a fine for the rest of your life. And so you've got to either talk to either supplement company or a part C company or you're not going to get a part D. And so you're faced with, yes, I definitely did. Unfortunately, I got Tom. Tom walked me right through it, got a really cool supplement, got way more coverage than I ever had for not nowhere near the amount of money and then also had the drug plan.

And so I never face any fines. I'm all set up. I got all kinds of cards. I'm ready to go. And I'm quite excited because I'm making doctor's appointments for things I've been concerned about for years, but I didn't want the exposure.

Yeah. And so, wow, there's a lot to learn on signing up for Medicare. We want to remind you that all this information is always available in the wonderful book, The Complete Cardinal Guide to Planning for and Living in Retirement by Hans Schile. It's all there at Cardinal Guide. Don't forget the guide after cardinal.com where you can just email Hans any questions. You might have 50 after today's show, but that's part of being a disciple as you're supposed to have questions.

Yeah. Well, thank you much. Thanks for listening. We hope you enjoyed Finishing Well, brought to you by cardinalguide.com. Visit cardinalguide.com for free downloads of this show or previous shows on topics such as social security, Medicare, IRAs, long-term care, life insurance, investments, and taxes, as well as Hans' bestselling book, The Complete Cardinal Guide to Planning for and Living in Retirement and the workbook. Once again, for dozens of free resources, past shows, or to get Hans' book, go to cardinalguide.com. If you have a question, comment, or suggestion for future shows, click on the Finishing Well radio show on the website and send us a word. Once again, that's cardinalguide.com. Cardinalguide.com.