Welcome back to the Excel in Retirement podcast, where we help good people make wise financial decisions so that they may excel in retirement with confidence. Learn more at clientsexcel.com. Now to your host, David Treese.

David Treese.

All right, hello and welcome to episode 129 of the Clients Excel podcast. This is Felicia Page and I've got Mr. David Treece here with me today, and we're going to be talking about Medicare. So as of yesterday, it was October 15th, and we have open enrollment for Medicare, and that's going to be open through December 7th. So you definitely want to get your changes made, or if you're just starting to get started with Medicare, you definitely want to listen to this and determine what it is that you can do. So stay tuned.

Thank you, Felicia. I appreciate you hosting us today.

Mary, first question. Who is eligible for Medicare?

Yeah, when we attain the age of 65 and we have worked, I believe it's 10 years, we are eligible. Either us, we have worked ourself or our spouse have worked, we are eligible for Medicare. And the government says that they will pay 80% of our health care costs with a few caveats.

Okay, awesome. 80% is awesome.

Yes.

So obviously, I know sometimes I hear Part A, Part B. So can you kind of tell us a little bit about that? What is Part A Medicare?

Yeah, so in that 80%, you have Part A and Part B. And so Part A, just remember admitted. So Part A helps you if you're ever admitted to a hospital and you get a bed overnight. And so that's your hospital coverage. There is a deductible with that, but there's no cost on a monthly basis with this, part B is your outpatient care. So anytime you see a healthcare provider outside of a hospital, part B would cover you. Now, if you went to the emergency room for say, God forbid you had a broken arm or something like that, and they patched you up and you were there for a few hours and then left, part B would cover you for that. So part A only helps you if you get admitted to the hospital.

Okay. All right. And so obviously you covered Part B as well as outpatient care. Yep. So obviously we've got 80% of this Medicare covered. So there's this 20%, right?

Yes.

That's left over. So what are our options with that?

So there's a couple different options, but I probably should add one more detail about Part B. One of the caveats with that is the government charges you. And this year in 2023, it starts at$174.10. It's based on your income, and that is per person. And they just released, the government just released the figures for next year. And I believe we said it was 185, right, Felicia, next year? Yes. A complaint I often hear from people is the cost of living adjustment that Social Security provides normally offsets the increase for Medicare. And so it doesn't feel like people sometimes are getting much of an increase in their Social Security benefits, or at least that's what I've heard people say to me. And so that goes up with inflation, though. And so you have the 20% that you're responsible for. Another good detail is if you're 65, you're you're probably gonna get inundated with solicitations and people telling you you have to make decisions. And the government's really serious about you getting on Part B when you turn 65. If you don't get on it at the appropriate time, then they're going to penalize you for the rest of your life. And in my 13 years of doing this work, I've seen one person. Of course, Medicare isn't a focal point of our business, but we like to educate people about this and be a resource for them. But I've interacted with one lady, and for whatever reason, she was in her early 70s at that point. This has probably been 10 years ago or more. But she did not get on Medicare regularly. when she turned 65 and the penalty was substantial that she had to pay when she got onto Medicare in her early 70s. And so they really want you to do it at the right time. But let's say though that you enjoy your career and you have health insurance coverage through your employer and the government uses the term credible coverage. And so if you have credible coverage like a traditional under 65 year old plan or whatnot, you do not have to start Medicare at 65. If you were going to retire at say 67 and then you were not going to have access to that employer plan anymore, you must start part A and Part B and Part D, which we'll get to here in a minute, at that point. Otherwise, you will be penalized for the rest of your life. So they're very serious about that, but you don't have to do anything if you have credible coverage at 65. Okay.

And just since we're kind of talking about that, what do these people have to do in order to register for this? Is there a registration process or how do they come about getting

Medicare? Yeah, there's a can always go to your local Social Security office and start your benefits there. And that can be a situation where you might want to take a good book and a glass of water because you might be waiting for a little bit there.

Kind of like the

DMV? Yes, yes, exactly. I find the Medicare website and the Social Security website to be pretty user-friendly because Hopefully, by that point when you're starting Medicare, you have already set up your Social Security login. I'm not certain on this, but I think your login for Social Security to view your benefits that you're going to get. is the same for Medicare. I'm pretty sure, I'm not positive on that, but I have helped people in the office pull up their Medicare site and you can register right there and it's pretty user-friendly. I mean, I would have an hour reserved to take care of that. It probably won't take you that long, but just to keep the stress level low. The other thing is, is you can start your Medicare benefits start working on the application process three months before you turn 65, the month you turn 65, and then three months afterwards. And so that's the window. And so if you're going to retire and you need to start Medicare, in order to keep the stress level low, you might want to start working on that a couple months before your targeted retirement date.

Okay. Do they have to do anything annually to maintain it or is it like a set it and forget it kind of thing?

So yes, you should look at your benefits yearly. So let's go to that 20% that you're responsible for. So that's 20% of any number. It might be 20% of$5 or if you had a lot of medical expense of a million dollars. And so that's not something that you want to try to self-insure for normally. And so there's two routes you can go. The The oldest route is with a Medicare supplement. And there's, I believe there's 10 different Medicare supplement plans that you can choose from. And Plan G is normally thought to be the most comprehensive plan that covers the most stuff. And Plan G covers 100% of that 20% that you are responsible for. It covers the Part A hospital coverage deductible. There is a small deductible that you have to pay a couple hundred dollars the first time you go to the doctor in the year and that's something you pay every year but for a monthly cost that is Some people may find it affordable, some people may not. The opinions vary on this, but a lot of times, I have found in my personal experience that people, a lot of times, Medicare is a little bit cheaper than their plan they were using when they were under 65, but of course, everyone's experience is gonna be a little bit different with that, but a Plan G will cost a monthly amount, and you can go that route. There's different plans that you can use, so you could evaluate those different plans. If I were 65, which I am not at this point, I would use a Medicare Plan G probably. That would be my preference. Good people are going to have a vast array of choices there.

For sure. What is it specifically about the Plan G that you think and find so beneficial?

I think that it provides the most liberty with going to whatever doctor that accepts Medicare that you want to go to. If you travel at all, a supplement may be better for you because you don't have as many restrictions on doctors that you can go to like you would in a Medicare Advantage plan. And that's the main reason, just more liberty with where you can go.

Yeah, absolutely. I know I like to choose my doctors.

Yes, no doubt. For

sure. All right. So you mentioned the Advantage plan. I'm guessing that's the other option instead of the supplement plan. So tell us a little bit more about that.

so an advantage plan i believe those came about under george w bush in 2006 and you have a ppo or an hmo of doctors and health care providers that you need to go to when you have an advantage plan and generally an advantage plan has no monthly cost for that coverage but you typically will pay co-pays and deductibles when you get care And there can be multiple co-pays and deductibles, and so it's very important with an Advantage plan to know what your potential out-of-pocket cost is. Some of those Advantage plans have a drug plan and silver sneakers and various different benefits embedded into them. If you do not get an Advantage plan that has a drug plan and you go with a supplement, you must get Part D, which is a drug plan also. All

right. Anything else we need to talk about in terms of the drug plan itself?

Yeah. So a drug plan is based on your income, the cost, but there's a tool on Medicare.gov that you can type in the brand names of any prescriptions you take and the dosages and quantities. And it will tell you the most efficient plan for you to take. And that is something that you want to evaluate every year during annual election period in October, November, and the early part of December to make sure that your plan is the best one, especially if you've gotten new drugs prescribed to you that year. That's important to look at. Even if you are not taking prescriptions, the government requires you to have that prescription drug plan. That is important. important too.

Awesome. All right. Any other final notes about Medicare that we should really discuss?

The first time that we get on Medicare, the insurance companies, whether that's an Advantage plan or a supplement company, cannot ask you any health questions. It's what's called a guaranteed issue period. And so you could literally have a foot in the grave and they would have to give you any plan that you wanted. And so it may be advisable if you have health challenges to make a good decision that first time. That's important to understand. I think that is what I would call Medicare 101, though. That's a high-level overview. There's nuance to it, of course, when it comes to those advantage plans, especially in the supplements. And we would be happy to refer you to somebody that specializes in that, that can help you with it, or talk through your questions that you might have on that.

Awesome. Well, we appreciate you educating us here today.

Yeah. Thank you, Felicia. Anything else you have?

I think that's it.

Okay. Well, we always appreciate our listeners and look for another show

soon.

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