Medicare Naked

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Welcome to Finishing Well with certified financial planner Hans Shile. Today's show is going to pique your interest, I'll bet. It's called Medicare Naked. Kind of getting into, you know, what would happen with Medicare if that's all that you chose to do.

And so it was really helpful to look at options once you know what it is that you, what kind of exposure, nakedness, you have in Medicare. And I think that as you listen to today's show, you're going to see the biblical concept of eight. You may have heard that seven is the number of completeness. And of course, there were seven words from the cross. But I don't know if you ever thought about what the biblical concept of eight is. And in fact, if you turn the eight on its side, you get an infinity sign.

So Buzz Lightyear, you know, he knew a little bit about this when he said from infinity and beyond. Well, the idea actually came from the idea that Jewish boys were circumcised on the eighth day. And the idea is that you do what you can for seven days, but God's the one who's actually going to cleanse you like the original tabernacle was sanctified Aaron and his sons on the eighth day. And I don't know if you've ever done the math, but part of the reason in the Christian church that we worship on Sunday is it's the eighth day.

In other words, Jesus came in on the triumphal entry on a Sunday, on Palm Sunday, and eight days later is when he came out of the grave. And that's when all of us got this ultimate cleansing, this unbelievable cleansing. So the reason why I bring this up in today's episode is as you listen to this, you go, I need to be a good steward of what I do with Medicare and whatever.

But after you listen to some of the details, I'm sure you're going to agree with me, this isn't something I want to try at home. That, wow, you know, God's going to have to bring me across the finish line. And at some point in time, you have to trust God take you where you can't take yourself. And often that includes getting people like with many counselors plan succeed. So I think after today's episode, when you hear some of the stuff you're going to hear, you're going to agree with me, like, I'm really glad I know Han. You know, these are their details in this that are really critical to my family to the exposure.

So dive in there. It's that time of the year again, Hans, where people are hearing about all these different things when it comes to Medicare, this time of year is just we're getting ready for it, the commercials are going to start, Joe Namos is going to be on TV, your mailbox is going to be full, your phone is ringing, and everybody, it's pretty much got the same story. And what they're selling is, is, you know, and everybody feels you got to do something.

And for a lot of people, you don't have to do much, but they're going to get you all worried about it. So what we're going to try to do with the next several shows, not every week, but we're going to get you prepared for today's topic is really going to be talking about the at the end of the thing, the high deductible plan G, because I had a listener write into me and say, Could you do a show? And could you do a comparison? What's this high deductible plan G? What's that all about? And I'd like to learn about it.

So that's where we're going to end up. But the crux of the show is we're going to talk about Medicare naked. And what we mean by that is if you signed up for Medicare, and you didn't get any supplemental insurance, you just had Medicare naked all by itself. And it's probably one of the best ways to understand like, why you need a supplement, and where it plugs in and to make choices with supplements is just to look at Medicare.

The basics. Okay, I got, you know, on Medicare, you have part A, which is your hospital, and part B, which is your doctor, medical and outpatient. And any more, you don't go into the hospital and spend the night much, or a lot of things. And so you can, you know, you can run up a 3040 $50,000 bill, or more and never go into the hospital, and it all falls under part B.

So, and that's important to remember that. So under part A, you're pretty well covered with just Medicare, because for a 60 day hospital stay, which is a long time in a hospital anymore, you've got a one time deductible of $1,484. So I mean, if you're in there three days, or you're in there 30 days, all it's going to cost you for the hospital part of the bill is $1,484.

If you have Medicare naked. So if that's all there was to worry about, supplements would be Medicare supplements would be a lot less expensive than they actually are. Because anybody that goes in the hospital, which is just a percentage in a given year, a small percentage of the overall population, Medicare would be out, you know, they'd be out for the whole hospital bill, but the Medicare supplement insurance company would only have to pay 1400, or only has to pay 1484 on your behalf.

So that's pretty well kept. Now, after you were in there 60 days in situations that I've had plenty of clients that have been in a hospital longer than that, then it becomes a daily thing that each day is 371 bucks a day out of your pocket, and then the rest is paid by Medicare. And then after 90 days, it changes to $742 a day out of your pocket. And then if the person is laying in the hospital at 150 days, and they continue on Medicare is done. I mean, it doesn't pay anything after that. And then of course, the supplements are going to come in and pay all these things that are out of pocket, or most of them.

So we're going to get on to that in a second. And where your biggest difficulty here, your biggest risk or exposure is under Part B, which is the medical and outpatient. And with that, you've got a Part A, excuse me, a Part B deductible annually of $203. Okay, and the $203, it's an annual thing, and just about everybody pays that. I mean, just you go a couple times to the doctor, and that's going to be the amount that's out of your pocket. And then after you reach that number, Medicare then pays 80% of all your costs, all your approved costs, and you would be responsible under, you know, if you just had Medicare all by itself, you would be responsible for 20% of the expenses. And what's important with this, people are familiar with 80-20 coverage, but what's important is that there's no cap on the 20%. So if you had, you know, $200,000 of expenses under Part B of Medicare with some major surgery or major, you know, medical expense, you'd be out $40,000. And there's no $5,000 cap or $10,000 cap. And then with Medicare, there's nothing for excess charges, because doctors can balance bill you on Medicare.

They can charge more than the Medicare allowable. And, you know, you'd be responsible for all of those. So there's your rundown.

Is that pretty clear, Robbie? It's clear, but I think it'll be unclear here in about 20 minutes, you know, because, you know, that's a whole lot of stuff. But the, but the thing that jumps out at you, obviously, is wow, the doctor part is scary, because we have all had doctor bills, and we realize how quickly they can jump up. And there's quite a bit of exposure right there. And even that $40,000, as I'm thinking about some of the doctor bills I've had in my life, that would be low compared to when I had a brain abscess and cancer and some of the things that I've experienced. So I'm like, Oh, yeah, yeah, there's a lot of exposure there. And I can see why I need a Medicare supplement.

Well, yeah. And then, you know, the the Medicare supplement, they've been around for as long as I've been in the business 1976. I mean, really, just as soon as Medicare came out, they started having a supplement, you know, just something to pay all these gaps. And when I came in the business that part a hospital deductible, which is now $1484 was 106 bucks.

Okay. And the part B deductible, which is now $203. That was $25 back in 1976. So these things get raised by inflation. And just what the government sets them at, and they'll be higher than this later on. But again, the deductibles are not really the problem that 80% has stayed the same the whole time I've been in the business 45 years, this is the Medicare pays 80%, you pay 20%. And the fact that there's no cap is really a big concern.

And that's where the need for a supplement. So then when you get to the supplements, you get to a Medicare supplement, then you've got all these choices. There's 10 standardized plans. And I generally simplify that for most of my clients, we go right to the plan G. And that's what you bought from us a year ago. And the reason you bought the plan G is they each have a letter, you know, a name one of the letters of the alphabet is because it pays the most benefits.

And you were shopping with an agent that would be me that represents about 40 companies. So you're able to buy the best plan at a very reasonable price because we compare them all against each other. And then you chose shows a good price and the best plan. And what I want to do is show like what is your plan and what a plan G is going to pay.

And so we go right down all those costs that I rattled out. The plan G pays or reimburses you for every single one of those things. The 1400 net 40 $84 deductible and the $371 a day, then the 742 a day.

And then after the 150 days, you're out quite a bit of money at this point. And that's where Medicare stops. The Medicare supplement plan G is going to pay all of those things. They're going to pay the 1484 the 371 a day, the 742 a day, and then all your costs for an additional 365 days, which very comprehensive of what the plan G Medicare supplements just wraps around part A. And then with the part B of Medicare, it's not going to pay the $203 annual deductible. You need to pay that yourself. But that's the only deductible that is not paid under the plan G. So that's on you. Once the $203 is paid, Medicare is paying 80% of all costs. You are paying 20% unless you have the plan G that's going to pay the 20% full with no limit on it.

And then if you have any excess charges where doctors charge you over Medicare, then you you've also got coverage for that they're going to pick up the whole deal. So as I'm sure those of you listening would agree with me that, wow, is there someplace where this is written down? Well, yeah. It's in Honda's book, The Complete Cardinal Guide to Planning for and Living in Retirement, which is available at cardinalguide.com. We got to go to a break. But again, that's cardinalguide.com, where you can get Hans' book on the other side of this Medicare naked show. I think you'll see how easy this really can be to just navigate.

So we'll be right back. Hans and I would love to take our show on the road to your church, Sunday school, Christian or civic room. 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. Well, welcome back to Medicare naked today on Finishing Well with certified financial planner Hans Scheil. We've been getting into an idea of what Medicare covers if you didn't have a supplement or if you didn't have Medicare Advantage, but mostly we're just talking about plain Medicare or Medicare naked and getting into the plan G. So let's pick it up from there, Hans. Yeah, well, we used to have a lot of folks, you know, I'm saying like 20 years ago, I've been in the business a long time, and you just have people that are just these, like conscientious objectors or whatever, they just didn't buy a supplement, they had Medicare A, Medicare B, and they just never bought a supplement.

And if they were talking to us, they were maybe interested in one. But this was all the insurance they had is just Medicare, you still got a few of those out there. And it's really, that's one of the things I'd like people to get out of the show is you definitely need a supplement, or you need to go the Advantage plan route. And in the first part of the show, we were just establishing, you know, just what your liabilities are without a supplement, and then how well the plan G Medicare supplement comes in and takes care of these. So in putting all this into context, is at the beginning of the show, I said, this is for people that have chosen to stay on original Medicare to not buy a Medicare Advantage plan to not go that route. Let's talk about that for a second, because the Medicare Advantage open enrollment is coming up. So if you're on original Medicare, and you're maybe thinking that you wanted to get into an Advantage plan, you're going to be able to do that in the fall upcoming. Or if you're on one of those Advantage plans, and you want to get off of it and back on original Medicare, then you're going to be able to do that too.

So and I can help you with all that kind of stuff. But what we're trying to understand today is just Medicare all by itself. And what you're out of pocket for your, you know, what you're out of pocket is going to be if you get sick. If all you have is Medicare, what the Medicare Advantage program has done is they've come in and they've put caps and they've reduced these deductibles. So that's one of the pluses of Medicare Advantage, and the maximum out of pocket are much less on a Medicare Advantage plan than they are on original Medicare by all by itself. And people say, Well, why isn't everybody on a Medicare Advantage plan?

And I can answer that pretty simple is because of the networks because you have to go to their doctors and hospitals. And you now need to start using your Medicare according to the private insurance company's rules. And most clients, many clients really prefer that after they've been on that a year or two that they really want to get back on Medicare like it used to be, or like they knew it as it used to be, which is original Medicare. So we're making the assumption today that you're on original Medicare, you're getting on original Medicare.

And now we're explaining why you need a supplement how much it's going to pay. And then we're talking about the plan G, which has the most benefits of any of the Medicare supplement plans available. There's still a plan F array, F like Frank, and the plan F you can't buy it if you're new to Medicare in 2020 or after but if you're if you started Medicare before then you can actually get a plan F. And the plan F is just a small bit better than the plan G than the fact that it pays that $203 annual deductible.

And that's literally the only difference. So I wouldn't be too worried about it if you can't get one of those. But I do want to say that qualifying the best plan available for some of you, you could still get an app, which is a little bit better than the G. So but most people buying this stuff, at least from us are buying the plan G these days. And then what we really want to talk about today and what this listener had written, what's this high deductible plan G. And it's something the government allowed to be developed. And it's the same from every company. And it's just a version that slaps another deductible on the plan G that you're going to have to pay out of your pocket.

And in 2021, that's $2,370. So you say what in the world would I want that for? I mean, if I, if I can get the regular plan G and my only out of pocket is going to be that annual deductible or $203 for Part B, why would I want a high deductible plan G? And the answer to that is, you know, I don't know.

Actually, it's not I don't know. But it's to save money on your premiums, because that the $2,370 high deductible plan G that's an added deductible is going to run your premium down into the 30 to $40 a month range. From if somebody's up around 150, 200 bucks a month, that starts looking pretty attractive is you you're putting in close to or as much as $2,370 into your plan G or into your high benefit Medicare supplement. So it's a way of self ensuring the first part of your bill when you're sick.

And then if you have healthy years, you have an interest in this, but I'm not recommending this week. I bet you we sell 20 high deductible plan G is a year. So it's not something certainly that we're pushing. But we have people coming in asking about it or asking for it.

And we certainly put it there and for people that are extremely wealthy. If you compare it to regular health insurance, people are not necessarily that scared of two to $3,000 of out of pocket. And they don't they don't want a Medicare Advantage plan because they want to go to their own doctors. And they're just saying if this gets into large dollars, I want insurance, but I can self insure the front end. Yeah. And in the case of certain individuals, in the one example, you're showing your video of people in Florida.

I mean, it's it's almost a no brainer in certain circumstances, right? You know, we do a lot of business in Florida and New York, in California, and we sell a lot more Medicare Advantage plans down there. Because I'm looking at a 65 year old female in Florida is paying about $3,000 a year for a plan G. And in the same same person in North Carolina would be paying at 65 years old $1,127 a year for a plan G. So you know, it's less than half. Now, if you take that $3,000 a year plan G, and then you go buy a high deductible plan G, the premium is 732 bucks a year. So you know, you're saving $2,300 on the premium. So the word going to happen to you is just keep that 2300 bucks in the bank. And if you max out your your deductibles on your meds up, you just going to pay it to the medical facilities, or pay it to the insurance company, I mean, however, you're going to pay it around. But if you're healthy, or you don't spend all that much your money ahead. So, you know, when when people get these Medicare supplements get expensive, we won't we want to cover everything.

The listeners ask us to cover something. That's what we're doing. Yeah.

And that but it gives an example to me of the overarching principle. Wow, there are a lot of options. And a lot of considerations. And wow, how cool is it that there's somebody out there that understands the ins and outs of all these different plans, and all the different deductibles, where your exposure is, where it wouldn't be to, you know, help you over the finish line, because, wow, I mean, it just, like I said, at the beginning of the show, I don't want to try this at home, you know, like, man, you know, there's a whole lot to take in right there. And it and it depends on your health. And it depends on your age.

And it depends on where you live. You know, what I want people to walk away with from today's show is just understanding that really a couple of concepts, but one of them is the answer to that question is, why would I want original Medicare compared to a Medicare advantage? And I'm just going to tell you what customers tell me is the people that have the Medicare advantage that get sick. Many of them are not happy with the networks that they have to play by network.

Not all of them are dissatisfied with that, but many of them are. And when they're on original Medicare, all they got to do is play by Medicare. The doctor or the doctor they're going to consider using or the hospital accepts Medicare, then that's all they got to worry about. So that's, that's the real reason that you want to stay on original Medicare, because being on original Medicare is more expensive. And then once you're on original Medicare, then you got all these deductibles and copayments, you need to buy a cell.

I mean, you just, you need it. And that's where it becomes expensive is it just, it costs you money out of pocket every month or every year to pay the premium for that thing. And now we're back on Medicare advantage. Many of these Medicare advantage plans have zero premium. So people like them.

And so we can just bounce back and forth. What I want you to understand is the reason to stay on original Medicare is so you can choose your own doctors in hospital. I can remember it all too well. In my dad's case, you know, the last two years of his life, he was almost in the hospital the whole time after his fall. And he had a plan F that you talked about earlier where he didn't even have a deductible. And I couldn't even believe the hospital bills that were being run up.

And he didn't pay a dime. Yeah. Oh, it's wonderful. I mean, people, people and you know, they attribute all that to us. And, you know, which I can't say I dislike that because it's just, I mean, I, but but I feel a little awkward about it, because it's really Medicare. That's paying the lion's share of the bill. Okay, it's just it's a supplement does such a good job of picking up the balance. And people like you, when you're looking at your dad's thing, they're attributing all that to the Medicare Supplement Insurance Company, because it just came in and paid so well. And I guess I'm fine with that, because I represent that this is what I sell for a living, but I just, it's the two things working together. And we have lots of people that get sick, and they get they owe nothing.

And they're just as shocked as you were. You mean it's nothing, you know, and they tell everybody else, and it's just, it's not the same deal with Medicare Advantage, you're going to have a bunch of deductibles, copayments, and all kinds of things that you're navigating. Now, sure, you're not paying any premium for it. But if I have a bias, if you can afford it, I like buying these Medicare supplement policies and staying on original Medicare. Yeah, and it's, it's nice to have somebody right here to, to run these things off of to go, what if I made this choice? And when I made that choice? And where's my exposure be? Or what, you know, what's your experience with that? Because obviously, Hans, how many clients do you guys have on Medicare supplements and Medicare Advantage?

5,400. We're just getting ready to communicate with all over about seven weeks. So we're going to be real busy. There's no way I can get that kind of experience to be able to help people, you know, because you you've run across most every scenario over the years that you that you can that you can imagine. And that's why Hans wrote the book, the complete cardinal guide to planning for and living in retirement, including the whole chapter on Medicare, which gives all sorts of information along these lines. It's all at cardinalguide.com.

And then he's got these wonderful video series like the one that we talked about today. And to go there, Hans, how do they do that on YouTube? Yeah, you just look up Cardinal Advisors. And that's O-R-S-A-D-V-I-S-O-R-S. Or if you type in Han Shyle, there you go, or you type Medicare Explain.

If you just type that you're going to get a whole bunch of people looking at you, but I'm going to be smiling at you somewhere at the top of the list. Medicare Explain. So again, Cardinal Advisors when it when it comes to YouTube, but cardinalguide.com when it comes to the internet. Hans, once again, great show. Thanks. Thank you. Finishing Well is a general discussion and education of the issues facing retirees. cardinalguide.com, Cardinal Advisors, and Han Shyle, CFP, sell insurance.

This show does not offer investment products or investment advice. 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 Han's 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 Han's 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.