Medicare Explained in 10 Minutes!
As of this post, March 25th, 2020 I could not see people in person for 2 months! Normally I see you face to face at your home, a restaurant, library, my house or wherever. I have been going to meet with people since the lockdown was lifted. I wear a mask and keep my distance. If that is not suitable I will talk to you on the phone, zoom or skype, or communicate via e-mail and text. But just to get things started, this is pretty much my explanation of how it all works as you go ON Medicare. As mentioned, I do have my cheat sheet, which I normally leave with people after explaining things, as it helps you “see” how it all works. Again, this is just a starting point, to help you start to understand the wonderful and confusing world of Medicare. Reach out to me directly at (717) 468-0130.
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Medicare Explained in 10 Minutes
My Favorite Medicare Myth!
There are many myths about Medicare, or maybe just misunderstandings. My favorite, or probably just the one I hear most of all is:
“You have to sign up for Medicare 3 months before your 65th birthday, or you get penalized!”
Oh boy, where do I begin to debunk this myth? As long as you have “creditable” coverage elsewhere, typically from your own employment or your spouse’s employment, there will never be a penalty for signing up for Medicare later, even well past your 65th birthday. So, you do not have to sign up for Medicare. Not even Part A, the “free” part.
When you are approaching the age of 65, you’re mailbox gets stuffed with promotional offers about Medicare Insurance Plans, like Medigap Supplemental Insurance, Medicare Advantage Plans and Prescription Drug Plans. (None are as informative, clever and humorous as mine, of course) The funny thing is, none of these mailings are from Medicare, unless you are already collecting Social Security. That’s right! If you are not yet collecting your monthly retirement benefit from Social Security, you will not receive a single thing in the mail from the Government, telling you what you have to do (or don’t have to do) regarding Medicare! Weird, right?
Myths are widely held beliefs, or false ideas. Medicare has been around for over 50 years. I don’t know who started this one, but it’s spread around for decades, “You have to sign up for Medicare 3 months before your 65th birthday, or you get penalized!” There CAN be a penalty, it’s just that few people end up owing it. If you wait to enroll in Medicare past age 65, for every 12 month period you did not have Part B, and did not have creditable coverage, you will pay 10% more for Part B for the rest of your life. But, as previously stated, the likely reason to delay taking Part B, is because you DO have creditable coverage.
And…NO…you do NOT have to let Social Security or Medicare know that you are NOT going on Medicare at 65.
If you are still puzzled by what you HAVE to do with Medicare as you are nearing 65, call me (717) 468-0130, call Medicare (1-800-MEDICARE) or call Social Security (1-800-772-1213).
What is the Donut Hole???
I am frequently asked 3 questions about a mysterious and misunderstood segment of Medicare Prescription Drug (Part D) coverage:
1. What is the Donut Hole?
2. How do I get in the Donut Hole??
3. How do I get out of the Donut Hole???
Whether your Medicare Prescription Drug Coverage is a “stand alone” Prescription Drug Plan or included in your Medicare Advantage Plan, it has the dreaded Donut Hole.
What is the Donut Hole? Technically it is the “Coverage Gap” in Medicare, just one segment of the 4 Part D Coverage stages:
• Deductible: If your plan has a deductible, you will pay the “Full Cost” of the drug until you meet the annual deductible, though some plans exclude some “tiers” from deductible.
• Initial Coverage: After the deductible has been met, you generally have fixed amounts to pay for your drugs—Co-pays or Co-insurance (percentage of the cost)
• Coverage Gap (Donut Hole)
• Catastrophic Coverage
How Do I Get IN the Donut Hole??
Part D Prescription Drug Coverage works on a calendar year basis, January 1st through December 31st. As you fill prescriptions throughout the year, your plan is keeping track of the “Full Cost” of your drugs. For example you may pay $3, $20 and $47 dollars for three different drugs that actually cost $11.55, $66.23 and $454.81 dollars.
If the FULL COST of your drugs added together in the calendar year reach a certain threshold, (which changes each year), it is $3750.00 in 2018…YOU ARE IN THE DONUT HOLE!!
All Plans have the Donut Hole, and what you pay for drugs changes to a percentage of the “Full Cost” your Part D Plan has for your prescriptions. In 2018 the costs are 44% on Generic drugs and 35% of Brand drugs. (the percentages change each year)
How Do I Get OUT of the Donut Hole???
Stay with me here! Your “True Out Of Pocket” (TROOP) costs must reach $5000.00 in 2018. The 5000 really has nothing to do with the 3750, it is 2 different calculations! The TROOP of 5000 is reached by adding up what YOU actually paid initially, this includes deductible if any, then co-pays/co-insurances in Initial Coverage plus the 44% on generics/35% on brands in the Donut Hole, AND the drug manufacturer of your Brand name drugs contributes 50% of the cost of the Brand drug. If this adds up 5000, then…YOU ARE OUT OF THE DONUT HOLE!!!
Now you are in Catastrophic Coverage. Costs generally go down. For 2018, you will pay the greater of 5% of the full cost of your drugs, or $3.35 for generics, $8.35 for brands. This will continue to the end of the year, and it starts all over again from the beginning on January 1st!
Pretty easy, right? LOL!
Do You Have the Right Part D Plan for 2018?
A good way to compare Rx costs on your current Part D plan for 2018 is on the official U.S. government site for Medicare:
• Go to www.medicare.gov
• Select the green tab for Find Health and Drug plans
• Enter zip code
• Step 1 Enter Information (about your current type of Medicare coverage)
• Select Current “Drug Plan” (Find your 2017 plan)
• Step 2 of 4. Enter Your Drugs. When finished click “My drug list is complete”
• Step 3 of 4. Select Your Pharmacies. You must select 1, but no more than 2
• On the next page, Step 4, Refine Your Plan Results, the choices are:
o Prescription Drug Plans (with Original Medicare)
o Medicare Health Plans with drug Coverage (aka Medicare Advantage)
o Medicare Health Plans without drug Coverage
Select “Prescription Drug Plans” and it will sort the choices in order for the projected lowest overall costs for all of 2018. “Overall” is the combined total of monthly premiums for the plan, plus the costs to fill prescriptions for all of next year. It will show prescription costs if purchased at a retail pharmacy, as well as through mail order. 2018 data should be on-line as of 10/1/17.
You will receive an Annual Notice of Change (ANOC) from your current plan provider every year at this time. This tells you about any changes for 2018.
Common Reasons for Changing Part D
• Formulary Change: The formulary is the list of drugs your plan covers. Make sure all of your drugs will be covered next year. If they are dropping any of the drugs you take, you would have to pay full price for them next year!
• Changes in the Pharmacy Network: Just because your favorite drug store accepts your plan this year, doesn’t automatically mean they will next year.
• You Now Take Brand Name Drugs: Your Rx list of will change throughout your life. Your current plan may cover your brand, but it may be cheaper on another plan.
• Drug Tier Change: Prescriptions are categorized into “tiers”. Many plans have a 5 tier system that looks like this:
1. Tier 1: Preferred Generic
2. Tier 2: Generic
3. Tier 3: Preferred Brand
4. Tier 4: Non-Preferred Drug
5. Tier 5: “Specialty” Drugs
If some of your drugs have switched tiers, you may pay more for them next year.
• Big Increase in Plan Premium: How much is too much? It’s up to you, but it makes sense to check and see if another plan is significantly more cost effective.
Yeh, I Probably DO Know Where You Live
Johnny Cash had a song called, “I’ve Been Everywhere,” in which he rapidly sings city after city he’s been to. Well I travel all over Lancaster, Lebanon and Berks Counties, visiting with people to explain the confusing mess of Medicare.
Just in the last 30 days I’ve been to Morgantown, Mohnton, Green Hills, Paradise, Lancaster, Ephrata, Lebanon, Palmyra, Myerstown, E-town, Exeter, Wyomissing, Refton, Willow Street, Manheim, Stevens, Landisville, East Earl, New Holland, Akron, Kempton, Millersville, Holtwood, Fredericksburg, Leola, Lititz, Ronks, Boyertown, Oley, Birdsboro, Kutztown, Columbia, Newmanstown, Mount Joy and Hamburg!
I have friends that are brokers for Medicare Insurance like I am, and they all have plush offices for people to come to. I would be bored out of my mind in an office day after day! I like going to different towns every day. I enjoy meeting clients in their home, petting their dog(s) and cat(s), seeing their family photos, and just getting a better sense of who they are.
How Many Phone Calls About Medicare do YOU Get???
If you still have a “land line” phone in your home, chances are very good that agents or telemarketers from insurance companies will call you repeatedly to pitch their Medicare Insurance product(s) to you. They call from all over the country: Texas, Oregon, Florida, etc.
They don’t leave messages. Do you know why they don’t? They know you won’t call them back!
Over 95% of the time when I meet with people to explain options with Medicare Insurance, it is in their home. I have no problem driving up to an hour from my house in Ephrata to where my clients live, typically somewhere in Lancaster, Berks or Lebanon County. It is not uncommon for such phone solicitations to happen 2 or 3 times in the hour that I am in their house!
Some people, in a moment of weakness, or purely by accident, actually answer one of these calls. Shockingly, some people, some really otherwise intelligent people, buy whatever the person on the other end of the line is selling! Now, some of these agents who solicit over the phone, may actually know what they’re talking about. Some may actually be brokers, and can offer multiple companies as options.
Some.
I feel the decisions to be made about your health insurance for the REST OF YOUR LIFE is a little too important to be made over the phone, with anyone, let alone someone on the other end of an 800 Number.
The phone IS necessary…to set up a time to get together face to face, one on one. I DO NOT SOLICIT BY PHONE, I only use the mailbox. I will certainly call you back, but you’ve got to start the ball rolling by calling me first at (717) 468-0130.
I hope to hear from you soon!
You Look Comfortable!
With a warm smile, that’s what a new client said to me today, “You look comfortable!”
Yes it was another sunny September day in scenic Lancaster County, 10 am, first appointment of the week and I was well rested and ready to go. However I think it had more to do with the contentment and joy in doing what I do. Perhaps some of it is being completely confident in what I do. I meet over 500 NEW people each year. I’ve met with THOUSANDS of people about Medicare insurance. The basics are the same, the presentation is the same, but the people are all different. Each person is an individual, so each time it feels brand new, and it’s fun!
Yes. I AM COMFORTABLE!