Original Medicare Vs. Medicare Advantage

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 Well. Welcome to Finishing Well, with certified financial planner, Hans Scheil, and today's show is Original Medicare versus Medicare Advantage. And the idea of that, if you watch the video that's done along these same lines, is that there are two paths to Medicare, and you get to make a choice of which path that you want to take. And as you think about that biblically, you know, you might be familiar with the Scripture, you know, ask for the ancient path and walk in it.

And I was thinking about like, oh my goodness, if there isn't, if there's something on the planet more confusing than Medicare, I would love to know what that might be. And so, you know, it's fascinating to me that life itself, because, you know, Satan's the author of confusion, God gave us the Bible, you know, to show us what paths. And then more than that, he gave us the Holy Spirit and Jesus and himself, the Father, to walk with us in those paths. In fact, that's exactly what he wants.

And he said it so well to me in the book of John, where he said, apart from me, you can do nothing. Well, from my opinion, because Medicare is a very fluid thing, as I've been on it now for about three years, and it changes constantly, that, you know, apart from Hans, I can do nothing. When it comes to Medicare, you know, there's nothing like somebody that actually studies this stuff, keeps up with it, and knows this kind of stuff. And so picking the right path is clearly a big deal, but having somebody to tell you which one to go on really is helpful, you know.

It is. And, you know, I started making these videos, YouTube videos, I guess six years ago. And it just amazed me the number of people that watch these things and then call in, and we do something different than the rest of the world selling this stuff and offering Medicare advice and selling Medicare supplements and Medicare Advantage plans. Because we sit down with every customer, every potential customer, and every presentation that we make and every video we make, and we're going to draw the clear distinction. This is a decision that if you're already on Medicare, you've already made the decision, you've chosen your path. And the path is you're either on a Medicare Advantage plan or you're still on Original Medicare and most likely you have a separate Medigap or Medicare Supplement insurance policy. You can't be on both. And there's so many people out there that call their Medicare Advantage plan a Medicare Supplement. And there's many people that are on Original Medicare and a Medicare Supplement.

They're on the other path and they think that they have to call the doctor to see if he accepts their Medigap plan. I mean people are just really confused even on what road they're on, what decision they made. So we explain the differences between the two.

We're going to do that on this video today. But most importantly, if you're listening to this, you need to get clear where you are. Or if you're anticipating Medicare, if you're somebody that hasn't gone on it yet, then this is the first thing you need to get clear on is which path do I want to take. And so if you're listening to somebody else or somebody's trying to sell you one of these things, you need to get clear with them which path are you talking about here.

Are you selling me a Medicare Advantage plan or are you selling me a Medicare Supplement because the two are clearly different things. Okay, is that – am I making any sense? Oh yeah, and I couldn't agree more that just figuring out which way you're going is that first major decision. And the neat thing about this one is you can change it every year based on the time of year it is. You can. And we're right now in that period, October 15th to December 7th is that six to seven-week timeframe where you can make changes. So if you're on a Medicare Advantage plan, you can change to a different Medicare Advantage plan. You could go from Humana to UnitedHealthcare or you could go from UnitedHealthcare to Aetna or you could make a change. Or you could say I've had it with the Medicare Advantage, I want to go back to original Medicare. I want to get on the government's direct Part A and Part B. I want to go back to that. And you can do that this time of year. And whatever change you make is going to be effective January 1st, but you've got this period of time to make this decision.

So you can change paths. You can go back to the fork in the road and you can say I want to go to original Medicare. If you're on original Medicare and a Medicare supplement and you want to get off of that and you want to get on Medicare Advantage, this is the time of year you can do this. Now, most of the advertising that you see that you get inundated with is really this time of year just talking about Medicare Advantage and they're not making this distinction. They're just going into it and they're just going to say this is the Medicare plan that we have that we're offering you and they're just going to talk about their Medicare plan. And most of the time they're talking about extra benefits. They're talking about the vision, the hearing, the fitness membership, the food, the dental.

And a lot of times they're not talking about actually the medical benefits and the doctors and their network and all that kind of stuff. So there's a lot of confusion out there about this and what we're going to do today is just talk about the two different paths. And so I want to just jump in.

Please. Yeah. So the original Medicare path, that's when you get the little red, white and blue card. It's Part A and Part B. And Part A, you don't have a monthly cost for. Part B, most people are paying $175 a month for and they take it out of their Social Security check unless you're an Irma person. And an Irma person is a high-income person and so you're going to pay a lot more than $175 a month, but we're not going to talk about that on this show. So you got to have Part A and Part B from Medicare and a red, white and blue card no matter which path you choose, you got to sign up for that.

Okay. Now if you stay on original Medicare and you don't go the Medicare Advantage route, you're most likely going to want to purchase a Medicare Supplement Policy or sometimes called Medigap. And that's an insurance policy where you're going to pay $100, $150 a month, maybe $200 a month. If you're in New York, $300 a month where you're going to pay a monthly premium and it's going to fill in all the gaps of Medicare or most of the gaps. And it's going to be original Medicare plus a Medicare Supplement is going to be a nice combination, but you got to pay for it.

Okay? And the reason you would want to stay on that, the positives of that is you can go to any doctor in the United States that accepts Medicare, which is most of them. And you don't have to mess around with a network and you don't have to mess around with pre-approvals.

You can just go into the doctor, make an appointment, bring your red, white and blue card in. As long as he takes Medicare, she takes Medicare, you're in. So a lot of flexibility in the providers. You have a lower out-of-pocket cost when you have the combination of the two of original Medicare plus this Medicare Supplement. You're going to pay very little out-of-pocket when you get sick. The predictability of cost, meaning that you're just going to have the Part B deductible to deal with, which is like $240 this year, and that's it. So you're going to know what you're paying and you're going to have very comprehensive coverage. Now, why would you not want to be on this path of original Medicare plus a Medigap? The con would be, number one, you have higher monthly premiums. You've got to pay that premium for the Medicare Supplement.

And for some people, that's a struggle. And so that would be a reason maybe you want to look at the other path. You have no extra benefits. You don't get any dental and vision. And you also have to purchase a separate Medicare Part D plan. In other words, you're going to have to pay for that separately and choose it separately. So that's the original Medicare side. And maybe you should jump in and say the Part D plan is your drugs. The Part D plan is your drugs. That's correct. And you have to purchase that separately. So if we jump over and look at the Medicare Advantage, what you're doing with that is you're just turning your original Medicare into a Medicare Advantage plan.

And you may have done this in the past or you may not. I mean, you may be on the original Medicare, but you may be considering doing it now. And the biggest advantage is you can dump your Medicare Supplement or you don't have to pay the premium of 100, 150, 200 bucks a month.

You can't pay the premium for that because a supplement won't work with an Advantage plan. And so it's lower cost out of pocket, especially if you're healthy, to go this Medicare Advantage route. You also get additional benefits. You're typically going to get vision, hearing, a fitness membership, dental, transportation. There's a lot of extras that you get. Secondly, you're going to have integrated drug coverage. So you're going to get a Part D plan.

It's just all included. And you're going to have an annual out-of-pocket maximum. And many of these things are at zero premium. They're not at zero premium.

It's a very low premium compared to the Medicare Supplement. So there's a lot of reasons to go on a Medicare Advantage plan. Before we go to the break, we want to remind you that this show is brought to you by Cardinal Guide, cardinalguide.com. And there you're going to find the seven worries tabs that we talk about often on the show. And there, one of those worries is Medicare. And so if you click on that, you're going to find a video that's right along these same lines that has show notes with all the details and the facts and figures and the numbers of what we talked about today. Again, it's under the Medicare tab at cardinalguide.com, as well as the complete Cardinal Guide to Planning for Living in Retirement book that Hans authored. And that's available at the website.

And my favorite is, of course, Contact Hans. Because again, when it comes to these decisions, one size does not fit all. And it's nothing like having somebody that you can talk it over with based on your current situation. And the nice thing about Medicare is every year you get a chance to switch if you begin to see that, wow, your situation is changing. But there's issues with that, too.

We'll get to that in a second. And we'll be right back with a whole lot more on the two paths of Medicare versus Medicare Advantage. Investment Advisory Services offered through Brookstone Capital Management LLC, abbreviated BCM, a registered investment advisor. BCM and Cardinal Advisors are independent of each other. Insurance products and services are not offered through BCM, but are offered and sold through individually licensed and appointed agents.

Cardinal Advisors is not affiliated with or endorsed by the Social Security Administration or any other government agency. Welcome back to Finishing Well with certified financial planner Hans Scheil and today's show, Original Medicare versus Medicare Advantage, essentially two different paths that you get to choose when it comes to Medicare. And as we talked about at the beginning of the show, it's a fluid situation that changes all the time. And Hans, we got changes coming, right?

Well, we do. And if the first part of the show, if you listen to that and you're still a little shaky on what the difference is between Original Medicare, that path, and Supplement, and then the other path, which is Advantage, you can go back and watch some of our videos of the past about Medicare. We got a lot of them up there and I think it'll clarify some of that.

Or, you know, if you really need to get clear on all this stuff, you can call us and we'll be glad to help you. And so this time of year is particularly busy for us. We have 5,000 customers who are on Medicare supplements. Well, actually about 4,000 on Medicare supplements and about 1,000 on Advantage plans. And so most of our clientele is going to go the supplement route, but a number of them are on Advantage plans.

So we're somewhere in the middle and I really want to just talk a little bit about what's going on this year and why there's so much attention on this. Two years ago, they passed the Inflation Reduction Act, you know, called the IRA, which sounds like another financial product that we talk about. The Inflation Reduction Act. And it really didn't have a lot to do with inflation, but they tacked on a Medicare benefit that Congress did when they wrote this bill and passed it. And it's a Medicare benefit, so we had to throw something in there for the seniors. And what they threw in there was an overall cap of $2,000 out of pocket for prescription trucks.

So that sounds wonderful on the surface, and it is because it eliminated the doughnut hole, which was confusing. And some of these people that are on very expensive drugs are going to be real happy with this because when they're out of pocket, gets to $2,000, their Part D plan is going to pick up all their drugs. So it's a wonderful benefit they passed.

The problem is they didn't put up any money for it. They just passed the law and the benefit of the cap of $2,000, and so nobody really got ready for this because it doesn't start until 2025. So it was passed a few years ago, and it starts in 2025, which is this Medicare season. So back in the summer, the health insurance companies are coming to Medicare because they got to get all their plans approved and the rates.

And they came for the Part D plans. They were initially asking for, we're going to raise the premium from $5 a month to $150 a month. I mean, just like a drastic, because somebody's got to pay for it, the insurance company's not going to pay for it. I mean, so they're going to make the consumer premium go up drastically from very close to free to $150 a month. And then the government is going, CMS is going, whoa, whoa, whoa, whoa, you know, we can't do that.

And so they put things on hold, and somehow they, I'm just going to simplify this, they found some money, and then they came back to the insurance companies, and they settled around a smaller amount. And I'm just pulling those numbers out of the air. So if you are on a standalone Part D plan, prescription drug plan, you very well have gotten a letter over the last few weeks that has said your premium is going way up. And if you want us to take a look at your other options, you can call us and we will.

What I'm going to tell you is the other options are not really that great. I mean, so we need to do drug plan reviews, but you're going to find the same thing at the next company and the next company and the next company is, you know, you can't pass benefits that you're giving to people without coming up with the money or you're just going to put the cost on all the Medicare beneficiaries. And that's what's happened.

And so that's a big issue that's floating around. Now, on a Medicare Advantage plan, to a degree, you still have the same problem because all of them include a Part D plan, and they got to pay out better on their 2025 Part D plans, that portion of it. But what we're seeing is a number of those Medicare Advantage plans, well, some of them have just been canceled. So people are getting letters that say we're not offering your plan next year. You got to go on Medicare.gov or you got to call somebody like us and find you another plan to get on. And because you've gotten a letter like that, we can help you get you on a different plan. But many of them have just messed around with the benefits or done some things to just kind of – because they got the same cost for the Part D that the insurance companies have on the standalone Part D. So somehow it's just kind of buried in there. And so you really need to look at your plan.

You need to review your plan and make sure that you still have sufficient benefits in 2025 if you just stay on the same plan. Okay, am I making sense to you? Yeah, it's complicated. There's – like Medicare is. But the drug part, for me personally, from what I saw, correct me if I'm wrong, I was on WellCare.

And I have a Medicare supplement, which we'll get into in a little bit why I'm on a Medicare supplement. And so mine didn't go up, thank goodness, that I could see in their letter. It was just like business as usual for them.

Why that? Yeah, okay. Well, and I'm going to tell you that they did not raise their premium. But what they did is they eliminated all agent commissions. So in other words, they're now giving us the privilege of offering their Part D drug plan, but they're not going to pay us any more.

Okay. And that was their way of dealing with that. And then they also cancelled our renewals. So if I sold you that plan and I was paid a very small commission and I get paid for years and years and years, I'm not going to get that next year.

So I don't begrudge that. I mean, it's just people got to do what they got to do in business, but all of the companies were kind of freaking out. And so they've all come up with different strategies to just stay in the business. And even the government just came up with some money to kind of postpone the problem because it is an election year. So I would just say for you, if it's people that are on WellCare, you just stay where you are for another year and then we'll see what it is next year. For people that are on some other plans, I've seen some rates go from $5 a month to $45 a month. Okay. And people and then most of those that we've talked to, we've just recommended stay at the $45 a month.

And then we're going to stay there because if the drug plan is working well, you know, you're not going to get any benefit from just switching to another one that's going to have a big cost increase anyhow. Right. Yeah, a perfect sense of it. You know, again, if the important thing is everybody read these letters, right? Because we have a tendency to get so much mail on Medicare that you don't even read the things. And obviously it's critically important.

Yeah. And if you want us to look over what you've got, give us a call. You can send us an email and you can talk to one of the assistants and you can get on somebody's calendar here. A lot of times we can't just talk to you immediately when you call and sometimes we can, but we can certainly put it on the schedule. We can zoom with you if you want to do a zoom and then we can actually look at you and we can put things up on the screen.

It makes it a little easier to serve people remotely. And we can just look at the whole situation and explain the whole picture of Medicare and look over your options and tailor it just to you and your wishes. Now, some of you may be on Medigap, Medicare Supplement and Drug Plan and you may want to move to a Medicare Advantage. You know, perhaps one with a zero premium and we can certainly do that for you before December 7th. Some of you may be on a Medicare Advantage plan and you want to get off of it and you want to move back to a Medicare Supplement.

And you will have to go through underwriting, but we have like 40 different companies to choose from and they all have different underwriting. So we can cross that bridge with many people. So this is the time of year where you can move things around or sometimes we don't move everybody around, but we can at least explain what you've got to you. And then sometimes the end of that is we're just going to stay where we are, but at least you'll have a better explanation of it. So we stand ready to help you if you want our help. Yeah.

And again, that's why you go to CardinalGuide.com and look for the contact Hans Bayne. That's very, very important. But again, the bottom line is, you know, whole like they got two paths to take. And for me, you know, I know that I just witnessed, you know, I was on a Medicare Advantage plan. And when my mother-in-law passed away, she ended up literally with a Medicare Advantage owing, you know, next to $20,000, where my father had passed away like three years before. And he was on a Medicare Supplement, a good one, the best one like I have. I think it's a Plan G. And he owed nothing.

And I was like, oh, my goodness. And I'd heard Hans say many times, if you get bad sick, you know, then you're going to really find out what you have. But Medicare Advantage works good if you're in good health. But if you wait until you get bad sick, right, Hans, then, you know, that isn't such a good idea. It's funny you bring that up. My old guy that I worked with, Jelly, for a whole lot of years, that's when, boy, you know, you get bad sick, you're really going to appreciate that. I love that description of health problems.

So anyhow, he's a good old Southern boy. And, you know, there you go. That's the – again, the Medicare – what I saw in the two is the Medicare Supplement with original Medicare, certainly with the end of life, bad sick in both those two cases.

There wasn't even a close comparison that the Supplement won hands down in that particular case. But unfortunately, once again, we've run out of time before we ran on the show. So we'd remind you that, again, the cardinalguide.com has to contact Hans' information because one size does not fit all that's for sure. And all sorts of information goes into that, as well as, of course, the Seven Worries tabs, which this is Medicare.

And as Hans mentioned, lots of wonderful videos to help get you honed in on exactly what the differences are, as well as Hans' book is really helpful on this, The Complete Cardinal Guide to Planning for and Living in Retirement, which it has such a clear-cut example of what the differences are. And it's all there at cardinalguide.com. Thanks, Hans. Great show. Thank you, and God bless you.

God bless. The information expressed does not take into account your specific situation or objectives and is not intended as recommendations appropriate for you. Before acting on any information mentioned, please consult with a qualified tax or investment advisor to determine if it's suitable for your specific situation.

Finishing Whale is designed to provide accurate and authoritative information with regard to the subject covered. Investment Advisory Services offered through Brookstone Capital Management LLC, abbreviated BCM, a registered investment advisor. BCM and Cardinal Advisors are independent of each other.

Insurance products and services are not offered through BCM but are offered and sold through individually licensed and appointed agents. Cardinal Advisors is not affiliated with or endorsed by the Social Security Administration or any other government agency. We hope you enjoyed Finishing Whale 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' best-selling 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 Whale radio show on the website and send us a word. Once again, that's cardinalguide.com. Cardinalguide.com. This is the Truth Network.