Medicare’s Annual Choice: The 2 paths of Medicare

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This is the Truth Network. Welcome to Finishing Well, 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 Well, we'll examine both biblical and practical knowledge to assist families in finishing well, including discussions on managing social security, Medicare, IRAs, long-term care, life insurance, investments, and taxes. Now let's get started with Finishing Well.

Well, welcome to Finishing Well with certified financial planner, Hans Scheil. Today's show is the annual choices of Medicare. So, you know, interestingly, we have our choices. And you may wonder what God chooses, and you might remember this story from the book of Joshua, where Joshua was coming up against Jericho. And when we pick up this story in Joshua 5, 13, it says, Now when Joshua was near Jericho, he looked up and he saw a man standing in front of him with a drawn sword in his hand. And Joshua went up to him and asked, Are you for us or Guinness?

Now he actually said, Are you for us or our enemies? Neither, he replied, but as commander of the army of the Lord, I have now come. Then Joshua fell face down to the ground in reference and asked him, What message does the Lord have for his servant? And the commander of the Lord's army replied, Take off your sandals for the place where I am standing is holy ground. And Joshua did so. So, you know, Hans, what I see so clearly in so many things with working with God is that there's so often a third option.

And I think it's either, you know, Bama or Auburn, or some choice like, you know, NC State or Duke or whatever, when actually, you know, there are more options that the Lord would have me consider. Dr. Jon Olin Sure. And I think where this relates to Medicare, is I kind of prepped you on this. This is really not the consumers or the people that are listening to this radio show that are here. It's more the people that sell Medicare and offer the plans and work for the companies that they have so much passion around their side of the game. And at different points, I've been part of either club. I mean, when I opened this business 10 years ago, I was clearly a Medicare supplement and original Medicare Part A and Part B.

And then putting a supplement on top of that is the way to go. And do a Medicare Advantage, I wasn't for that at all. I mean, we sold some of it. But I always saw that as you got to put up with networks, you're going to have some organization other than the government in control of your health care. And sure, it's less expensive to carry that in terms of premium.

But I was for the one route and really against the other route. And things change over time. And my whole sales organization, I think many of them haven't really changed.

They've kind of stuck with that early thing I taught them. Most of these people have come to work under me. And we have thousands of clients all over the country that have Medicare supplement insurance with us, like approaching 6,000 people. And we probably have 1,000 that have Medicare Advantage. And three or four years ago, we had 200 that had Medicare Advantage.

So we were clearly on one side of this thing. And the other side of it is that the people that sell Medicare Advantage or the companies that sell that, they're not only one-sided on their side. This isn't going to be the greatest thing that's ever happened to you is having this Medicare Advantage.

They take it even deeper. It's like our Medicare Advantage. I mean, it's like Humana or whomever, you know, Cigna, UnitedHealthcare, Blue Cross. It's like because most of them historically have only sold or can sell one of those companies. But there really is a group we're arguing this is the way to go. And when you watch TV commercials, probably 90% of the are for Medicare Advantage and 2% of them are for Medicare Supplement. And so people kind of hear all that. And many of the consumers like you, especially if you're not on it yet, you don't even know which one of these they're on.

And so one of the things that I wanted to do in the beginning of the show here is establish for people these are two distinct routes. And you got to pick one of them annually. So or you can unpick it or you can review it annually.

And in some cases sooner than annually, but annually. But when you're on this particular route, you're on it all the way. If you've got a Medicare Advantage plan, and that's what you're on, you don't have a supplement. And you don't have original Medicare. You've got a Medicare Advantage plan. You've been outsourced.

Yeah. And it really, the amount of confusion that people have, consumers I'm talking about, radio listeners, people like you. I mean, when I sit down with most people and I'm trying to figure out, they're trying to figure out like what they've got.

I mean, we've got to find the starting place before we can help them. There's many people out there that they can't tell me which path they're on. So they start telling me things about their plan. Like as soon as I hear they pay zero premium or low premium, then I know they're on a Medicare Advantage. But they might be describing it as a Medicare supplement.

Okay. They tell you they got golden sneakers or whatever it's called. Yeah. That's probably a Medicare Advantage. But we have Medicare supplement companies that lets you buy silver sneakers too. Oh, it's silver. I'm sorry. I thought it was gold.

Yeah, it's silver sneakers. So they don't make this easy. And there's a reason people are confused. But it's really important if you're going to understand your coverage, or if you're going to make some decisions and some changes going forward, we've got to get real clear of where we are. Or if you're just somebody coming up on Medicare, then you need to learn this. It's almost like when you're talking to somebody, say, which path are you on? I want to know is it one or the other?

And my Facebook 15-minute video explaining all this just plays all over the United States. And people that watch that, they understand this point. So that's the second decision.

They may need to make people coming up on Medicare. Am I going to go down this path or that path? And you can't choose both. You can't have a little bit of one or a lot of the other. It's one or the other. So we'll keep reiterating that throughout the deal here. And go over just – we're going to end up with some why would you want the one over the other, okay? And when we get to there, it doesn't mean that the other is bad or even bad for you. It's just we want to get down to the pluses and the minuses of both to help people make good decisions.

I really think that your story of the man in New York City would be something that had I come up in his situation, I would not be on a Medicare supplement. So I think that's a good one to maybe start with. I think this is really cool. And we can thank Facebook for that, that I can play a 15-minute video, which I can really get a concept of a whiteboard across in 15 minutes, okay? Much more than I can in one minute or 30 seconds. So it's the same price as a 30-second deal.

And then people have a choice whether they watch it or don't. So this guy watched my video. And like a lot of people, it really moved him. He sent in his information.

In fact, he didn't do that. He called me, and he wanted to talk to me. He called the office. He said, I want to talk to the guy on the video.

Can I do that? I said, sure. Put him through to me.

We had a conversation. This guy's a dentist. He makes 400 grand a year. He's in partnership with his brother.

He's quarantined. He's just seeing patients three days a week. I didn't get whether his income's gone down or not.

He's turning 65. And when he watched the video, he had deducted that he needed help making this decision of one or the other. And he thought the two paths or the two choices were HMO or PPO.

And he didn't realize that he was over on one path, already made that decision, and then making a next decision of an HMO, because they're both under the same decision. So I had to unlearn all of that, go back, explain it to him again, and said, no, you've got to sign up for A. You've got to sign up for B, no matter which path.

You've got to do that first. And you've got to pay for B. In this guy's case, he's not only going to pay for B. He's going to pay Irma, a pretty big Irma.

And we calculated that. Can't do anything about that until he retires. And then we can fill a form, maybe get him out of it for a year or two.

We can do some financial planning to get his post-retirement income down so that he won't have to deal with Irma. But you need to sign up for A and B, no matter which route you take. And once we do that, then we're either going to just stay on original Medicare, A and B, and we're going to buy a supplement, which in New York City, ring the bell. Okay? They're expensive.

But we'll get to that in a sec. Then we're going to go over his other decision that he could make is he could outsource his Medicare, or he could allow the government to outsource. When you're on original Medicare, you're filing your claims with Medicare. Your doctor is dealing with Medicare itself, and they're getting the money directly from Medicare. When you go to a Medicare Advantage, once you enroll, like with Humana, Humana is going to get a check every month every month from Medicare. It's going to say Robbie Dilmore on it, or it probably won't, but it's going to be the government.

It's probably like 900 bucks a month, maybe 1,000 a month. Every month, the government's going to be sending it to Humana, and they're going to be saying, here, you cover Robbie Dilmore. You pay him. You pay for his Medicare.

We're just going to pay you. That's really what's going on. And then this is called officially Medicare Part C, but you can't get on Medicare Part C until you enroll in A and B. So you're still in A. You're still in B, but you've now moved over here to C, and you don't only have Humana to pick from. You've got UnitedHealthcare, La Crosse, Cigna, Aetna, you name it. So you've got a whole list of them, and they all want the check from Medicare. So they want your business. And most of them these days offer zero premium.

In other words, I'm not making any payments. Right. And that puzzles a lot of people.

It puzzled him. How can this be? On the one side, you want 300 bucks a month for this supplement. And on this side, you're telling me I can go with the same company. We could sell him a UnitedHealthcare Medicare Advantage, but his premium is now zero. And so I'm going to explain that when we come back. I'm going to tell all of you what I told him, and it applies to all of you, how they can make the premium zero, because it's not really zero.

Right. When we come back again, you can find out all this information in Hans' book, The Complete Cardinal Guide to Planning for and Living in Retirement, which is from cardinalguide.com. Email Hans, or if you want to call him, I'm sure the number is right there where you can do that as well. You can get the book there. When we come back, you're going to find more advantages and disadvantages to Healthcare Advantage, Medicare Advantage.

Be right back. Hans and I would love to take our show on the road to your church, Sunday School, Christian, or civic group. Here's a chance for you to advance the kingdom through financial resources by leveraging Hans' expertise in qualified charitable contributions, veterans aid and attendance, IRAs, Social Security, Medicare, and long-term care. Just go to cardinalguide.com and contact Hans to schedule a live recording of Finishing Well at your church, Sunday School, Christian, or civic group. Contact Hans at cardinalguide.com.

That's cardinalguide.com. Welcome back to Finishing Well with certified financial planner, Hans Scheil. Today's show is the advantage, what, I'm trying to remember what the day. Well, we're taking Medicare and we got two paths, and we're making sure that people have two distinct routes. So let's just go on talking about the dentist. I mean, so we got this dude who, he's still mixed up on the two paths, okay, but I'm setting him straight. He got the fact that there are two paths. He just thought they were HMO and PPO. And so I had to back him up off of that, back to this is Medicare Advantage and the outsource and back him up to A and B, and kind of start all over.

And that's what I've just done before the break here as I went through. We got him signed up for A, signed up for B, and then looking at a supplement. A plan G was 300 bucks a month in New York City.

He's right in Manhattan. The same exact policy that you bought, Robbie, he's the same age for what, 100 or 95 or something like that? Yeah. 100 bucks a month. Right.

So it's three times for exactly the same thing. And even that, he's just, well, maybe I'll take a look at those Medicare Advantage plans. And then we get over to the Medicare Advantage plans, and you wouldn't believe how many of those are available in a, you know, like a five mile radius in New York City. I mean, it's just, it's just like infinite. And so we're just kind of narrowing him down. We don't need to look at all these.

So we're going to get him down to the biggies. But he was, he saw there was no premium, zero premium. Zero premium.

So he's looking at that and he's just, well, how can that be? And it was even the same company. It was UnitedHealthcare on both sides that offered the $300 a month premium, which was a good deal. And then they offered the zero premium.

They actually had two of them there. And what I explained to them is I said, I don't know how much it is in New York City, but I bet it's more than a thousand a month, is that if you elect this plan, Medicare is going to pay UnitedHealthcare a bunch of money every month. And they're going to be rid of the liability of paying claims on you. So if, you know, if you just kind of have a mild year with a thousand bucks or something, then the government didn't do themselves any service by paying UnitedHealthcare $12,000 to be rid of you. But they do that with some people and they pay UnitedHealthcare $12,000 and that person costs UnitedHealthcare $100,000 or $200,000.

So we'll let them worry about that. There's zero premium to you or to him. So that compares zero premium to $300 a month.

Now we're talking. And he would have had to pay a premium for his Part D drug plan that he would buy separately in addition to the 300 bucks a month. Those aren't ridiculous in price in New York City for some reason.

They're about like they are here. They're not much, but it's still something that comes along with the zero premium on the Medicare Advantage plan. And so we went through that and then now we went up over the HMO or PPO because the HMO plans within Medicare Advantage look more attractive.

Mostly do. They, they've got some extra stuff. And the catch is with the HMO is you can't go outside the network. There is no non-network providers. And then if you want to see a specialist, you got to go to your primary doctor first. And that doctor has to refer you to a specialist inside of their network. And with a PPO, it's different. You still got the same ball game on, you got to go to somebody in-network to have in-network costs, but you can go out of network and then you just have a higher cost, which didn't seem to bother him. But what really bothered him is being stuck in their circle of doctors in New York City. He just said, I could have doctors I don't want.

Yes, you could. So why don't we just scratch out the HMOs? Cause we've got plenty of PPOs to pick from and we'll just, so we did our work and he's probably going to buy a zero premium PPO from one of those companies. And I think they've narrowed it down.

It doesn't really matter which one. And Tom's helping him with that. And what I pointed out to him in the whole thing is we spent a lot of time with this guy back and forth. He's analyst. He's a smart guy. He's a scientist.

He's a doctor. And so I just, I just pointed something out to him. I said, you know, we're talking about thousands of dollars here. So this is an important decision.

You're turning 65 and it's important to the extent that whatever you decide for May 1st, you're stuck on that till for the rest of the year, but you can change this in the fall. So even if we make a bad decision now or a less, just a poor decision, we can get out of it. And we're talking about several thousand dollars.

So it has significance. You know, then I moved him over, did, was asked him if he was aware that Medicare pays almost nothing for long-term care and they certainly have almost nothing at home. And then, you know, how much does it cost to hire private duty nursing and aid services from a home healthcare agency in New York City and Manhattan?

If you're this rich, retired guy, you know, we're probably talking a hundred thousand dollars a year. I mean, that's how much benefit I'm going to put on his policy. And we've got to cover that for several years and you're ready to just do without that if you hadn't talked to me. So I really woke him up that the sure this decision about Medicare is important, but the whole deal around long-term care is really important and you can't rethink those decisions. What you decide now, yes or no, and how much coverage, that's going to be pretty much it. You can't sit at 80 years old and start saying, well, I think I'm going to change my decisions about long-term care.

No, you need to make those now. So back on the topic, it's just important for people to understand that you've got two distinct routes here to go. Original Medicare and then most people add a supplement to that and they add a Part D drug plan. Right.

And so that, that's in New York City, but here we are in beautiful North Carolina. And I've made the same decision based on similar factors back, what, back really last July. And in my situation, you know, I looked at, you know, there's people in my family that are on a Medicare Advantage plan and I just happened to get their mail. And I can see that there's deductibles and co-pays that are fairly significant in what their plan is because they're in the hospital, you know, they got this 80, 20 thing like you have on your current insurance.

And so what I could see was clearly where the Medicare Advantage in my case, having been a cancer survivor, have a couple other chronic conditions and stuff that like, man, if I go in the hospital, you know, I'm going to have some exposure. However, I could buy in my case, a supplement for, like you said, it was like 100 bucks a month. And my drug plan that I added to it was like 25 bucks a month. Yeah. And I think the one you're on now is probably seven bucks a month.

I mean, it's just, we changed a lot of people. CVS came out with a $7 a month plan that just, so those prices are actually coming down. So that was clearly a good decision and I recommended it.

And that's probably what I'm going to do if I'm still living in North Carolina, which I probably will be, in a lot of parts of the country. So almost immediately, like boom, I went on Medicare in October. Well, you might recall, if you know me well, that that was when I chose to cut off the end of my finger with my hedge trimmer.

Which, you know, may not seem all that severe at the time, but between all the complications that happened of all the antibiotics I was taking and all sorts of things that happened, you know, I ended up in a hospital three different times, you know, in the next month. And like, holy mackerel, was I glad I had the supplement that I had. Cause boom, I paid my deductible and I was good to go.

There was nothing else. People love them. I mean, they absolutely love them. Now I'm going to tell you is, is that we have a lot of clients that have had the same supplement with us five, six, seven, eight years. And they've kept the same one. We haven't changed them, even though it's gone up because they've developed health conditions, serious health conditions, many of them. And they're not eligible to switch to a new supplement. And it's killing them paying 250, 300 bucks a month for their supplement.

It's only gone up to that point. And a lot of our salespeople have difficulty getting by the biases of, boy, you don't want to give that up. And these people don't want to give it up.

But when they find out that they can give up the $250 a month premium and go to a zero premium, many of them are doing it. And, and so, so we're moving people that are over later. So I just want to give Medicare advantage it's due.

Okay. And this guy may move back to it. This dentist may move back to a Medicare supplement. He's never been on one, but he may opt that after a year of being on this thing, of dancing around to some different doctors.

And so I want to be real clear, and I don't want to insert biases into people like one is better than the other. Because with a Medicare advantage, you got to deal with the networks. So you, and you got to deal with some deductibles and copays.

Although there's a cap on them, they're still there. And with the Medicare supplement and original Medicare put together, you have almost no copays and deductibles. I mean, you've got to pay the Part B deductible, which is $203 a year, and that's it. I mean, just, you got 80% from Medicare.

You got 20% from the supplement. If anybody excess bills you, you got coverage for that under the supplement. And then there's the other Part D drug plan, which by the way, does have copays, whether you got a Medicare supplement or not. But you got copays and all that stuff with your drug plan, which has really been outsourced, right?

Well, yeah. So you are on a little bit of Medicare advantage when you're on the path, you know, the Medicare supplement path, you got to buy a separate Part D. So that would be a disadvantage. But the advantage to that is you get to pick your Part D. So we can go through and pick from all the Part D plans. Whereas when you're over on the Medicare advantage side, you just get whatever Part D plan they gave you.

And you're probably going to be fine with that, but you don't get to pick it. Or if you use that to pick the plan, then it's like the tail wag and the dog. Most people use the doctors to pick the Medicare advantage plan, right? And so with the drug plan, with all the different companies that you guys use, you know, Tom was able to put my medications into the computer and say, oh yeah, well, if you're on these, this is going to be the drug plan that covers the most of your, what your medications are and those kinds of things. Where again, if you had bought a Medicare advantage, whatever they had, you got. But in, but in the case when you got a supplement, I thought it was nice. Sure, you can put in, you can pick it.

You can pick the one that, and you. So there's, there's, there's different plans for different people. This used to be kind of a 50-50 deal. You know, like half the people were on Medicare advantage plans, half on Medicare supplements and original Medicare. In fact, it used to be slanted more toward the supplements. Now it's slanted a little bit more toward the Medicare advantage and they're picking up steam. I mean, and they've made these things better and better and better. Like the networks are better than they used to be. The coverage areas. So you get somebody down at the beach here in North Carolina or up in the mountains, somebody out in the mountains of West Virginia, they used to not have Medicare advantage options. There's no point in comparing it.

Now they do. And they got several choices. Well, once again, we want to let you know that this, all this is covered in Hans' book, The Complete Cardinal Guide to Planning for and Living in Retirement, which is available at cardinalguide.com. As long as, you know, you can always just email Hans, ask for his book and it's helpful to be able to see these in the charts that he has and all those kinds of things. So we're so grateful you joined us today on Finishing Well. Thank you. 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. This is the Truth Network.