The Ultimate Medicare Breakdown: Choosing the Best Plan for Your Needs

Host: 00:01:00

Welcome to Money Roots, the podcast where personal finance gets personal. Each week, Amy and her guests dig deep into the world of finance, making it more approachable and understandable for everyone.

No matter where you are on your financial journey, from savings and investments to budgeting and planning, we'll bring you practical advice, inspiring stories, and expert insights. We believe that everyone has the potential to grow a healthy financial future, and we're here to help you nurture it.

So whether you're a financial guru or just starting to plant the seeds of your financial knowledge, this is the place for you. Get ready to uncover the tools and strategies that can help you thrive financially.

So, without further ado, let's dive into today's episode of Money Roots.

Amy: 00:01:50

Hello, Money Roots podcast listeners. Amy Irvine here. And joining me today is Carrie B. One of our other financial planners. Carrie, it's so fantastic to be back and recording.

Kerrie: 00:02:05

I'm very excited you're back and recording. It's been fun and it's been a pleasure doing it, but we are very happy to have you on today.

Amy: 00:02:15

Well, you and I were talking about some of the challenges that we're hearing from our clients, and one of them in particular had to do with the open enrollment period around Medicare and even just the eligibility period of Medicare in general and all of the confusion that goes around it. So we thought it would be great if we could do a little podcast on that.

Kerrie: 00:02:36

Yeah, sounds. I think it'll be a good.

Just maybe education for some and maybe a refresher for others as we go, you know, into the time when everybody's that's eligible. Starting to think about it and just get it on everyone's mind.

Amy: 00:02:52

Yeah. So I thought a great way to start this would be to talk about the different parts of Medicare.

This is very confusing because when we think about, like, traditional insurance in general, it's just you hand an insurance card in and you, you know. Yeah. You have different parts to it and different coverages and stuff like that.

But it's not the same as, like, having a part A, a part B, a part C, a part D, a supplemental. There's, like, all this stuff, and you see all these ads on TV of all this different stuff. Right. It's so confusing.

And I know clients are like, you know, they. They get tons of stuff in the mail from different providers. So I thought maybe we could break it down into, like, what is the actual.

What is Medicare? Like, what is it in general? So traditional Medicare. Traditional Medicare has part A and part B. That is traditional Medicare.

So part A of Traditional Medicare is your hospital insurance, right?

rly significant deductible of: 1600

ation, then once you pay that: 1632

Days one through 60, you don't have any additional insurance or any additional cost coming out of your pocket. Once you meet that $1,632 days 61 to 90, you pay $408 a day.

And then after day 90, you pay $816 each day up to 60 days, which is what they call the lifetime reserve days. So if you are in the hospital and you used up all of your coverage, you're now going into your own private pay.

So after you use all of that, you pay 100% of the cost that's on traditional part A.

So if you were in the hospital, say five, six months for some reason, and you only had part A coverage once you use up your reserve period, you used up your 90 days, use up your reserve period, which again was 60 days, you now pay all costs. If you don't have any supplemental insurance or anything like that, that's part A, that's traditional. Then there's part B.

s, all that sort of thing. In: 2024

Now, on top of that, just as A, most people don't have to pay a premium for part A, but they do have to pay a premium for part B. So, like, we pay insurance costs, you know, if we have insurance, part A doesn't have a cost for premium.

. And in: 2024

And then you also pay 20%. Again, this is if you don't have any supplement, right? This is what you would be responsible for paying out of pocket, right? Those two work.

Those two work hand in hand. Does that make sense so far?

Kerrie: 00:06:55

Yeah, it does.

So I think it's like from when you're thinking about it, you could just think of like, I know if you have regular insurance, it's all kind of falls under the same umbrella, but with these two, it's like A, as if something bad happens and you're not going on a regular doctor visit and you have to go into the hospital and then B is just kind of for your regular everyday things and they have their own deductibles. Is that a fair.

Amy: 00:07:20

That's correct. You got it. Yep. Okay.

Kerrie: 00:07:22

So, okay.

Amy: 00:07:24

And then there's something called part C. Part C because C came after A and B. That's why it got part C. Right. So part C is actually a combination of the two of those plans.

But instead of being under training traditional Medicare, like we think of, you know, part A and B, it's actually, and it's not backed by the Medicare Trust. So part A and B is backed by the Medicare Trust. Part C is where you combine A and B and sometimes D, by the way, but I won't go there yet.

But you combine part A and B and it's a private insurance company that offers it. So a United Health Care, a Blue Cross Blue Shield, mvp, you know, Kaiser, like all of those big kind of insurance companies that are out there.

Part C is no longer under the Medicare trust. It's now run by a private insurance company, like what you often have when you're working.

So each company and each plan is going to have different types of coverage for your hospitalization, for your co pays for all of that.

So now we are taking something like what we usually have through an employer, but we're wrapping it up into a nice little ball and calling it a Medicare Advantage plan. Have you ever heard that terminology? Yes.

Kerrie: 00:08:55

And I have a follow up question whenever you finish.

Amy: 00:08:59

Yeah. No, so. Well, Medicare Advantage plans and part C are the same thing. They're the. That's what they are. Yep.

Kerrie: 00:09:08

Is it a fair thought or you hear different people say different things, but is it very dependent on where you live? And like, is it something that you need to really do your homework on?

If you sign up for Medicare Advantage versus just sticking with a traditional A and B?

Amy: 00:09:28

Yes, Very dependent.

Kerrie: 00:09:30

Okay.

Amy: 00:09:30

Because where I live we hear a.

Kerrie: 00:09:33

Lot of people say, like never sign up for Medicare Advantage in our area, but then we actually have clients that utilize the Medicare Advantage. So that's what prompted the question.

Amy: 00:09:47

Yeah. So in certain states, once you go on Medicare Advantage.

It's when people want to switch back to traditional Medicare with a supplemental plan, which we haven't talked about yet, but I will get to in just a few minutes. If they want to switch back to traditional Medicare and then want to get a supplemental plan on top of that.

Most states, there are a few that don't require this, but the majority of the states require underwriting at that point in time. In other words, they need to approve you to get the supplemental plan.

And that's why for a lot of people, when you would want to switch back to traditional Medicare with a supplemental plan, it's because you might have some rather challenging health conditions and you won't, you probably wouldn't be underwritten. It's kind of like the same thing. Like if somebody wants life insurance and the insurance company says, do we want to take you on as a risk? Yes or no?

Well, when you get off. Because you can only change once a year after your first year, right? So you can only change during open enrollment period.

And so if you want to switch back, you can only do it during open enrollment. In most cases there's, there are a few exceptions. I'm not going to get into them right now.

But in most cases you can only switch back during that open enrollment period. And for most states you would be underwritten, which can make it very challenging. Which is why a lot of people say don't switch.

Plus they're also, remember, when you go to a part C plan, you are going on to a insurance plan. That is where your care sometimes has to be approved by the insurance company.

And that's why I think a lot of people say don't switch because if you're on Medicare, you, you can choose to go anywhere you want. Now, the person that you go to may or may not accept Medicare. You might be able to submit your claim to Medicare for reimbursement.

They may not reimburse at all, but you can completely choose to where you go. Now, if you are on a Medicare Advantage plan, you still can choose to go wherever you want to go.

But if they're out of network or not a provider, that's, you know, if your plan doesn't allow for out of network coverage, then you're not going to get reimbursed. And that's one of those reasons why we always say this is why it's challenging, right? Because what's your medical situation?

What kind of ailments do you have? What kind of medications do you take? Do you have any family conditions? That you aren't experiencing now but you could experience in the future.

I mean, heck, who knows what they could or couldn't experience, right?

But that's why it's a hard decision when people are getting to that point where they're needing to sign up for Medicare and trying to decide between a Medicare Advantage plan and a supplemental plan.

So we've talked about part A, we've talked about part B, we've talked about the part C, which is the Medicare Advantage plans that's going to have different plans, are going to have different deductibles, they're going to have different co pays, they're going to have different coinsurance, all that sort of thing. And then part D is the prescription side of things.

So you could say D for drugs, but it's, it would just happen to be, you know, in line ironically that it was part D. And that is where you get your prescription coverage. If you only have part A and part B, you do not have coverage for your prescriptions.

And by the way, when you sign up for Medicare, you do need to sign up. In most cases you need to Sign up within six months of turning six 65 or you will have a penalty for being late and signing up.

And we usually tell people sign up about three months before your start date so that you have all your cards. But you do have a little bit of a window in signing up. But if you go past that six months from the date that you would have been eligible for it.

So if your birthday is in October, you really want to make sure that you sign up by March. Right. That you have something in place or you'll have a penalty.

And part D is the same thing like if you don't sign up for your prescription coverage around that time that you become eligible. Now if you have a company plan that you're part of, you may that might be one of those exceptions.

But for the most part you need to sign up right around age 65 to get to not have a penalty going forward. But part D. And again, here's another, like part D can actually be rolled into part C or you can have A, B, D and D.

Again, there's multiple plans that are out there.

Some plans are good for you if you're on generic drugs and medications and other plans might be good for you if you're on more expensive medications, you might pay a higher premium but a less of a copay insurance. So part D is something that we always suggest to people. Do not set it and forget it.

Every single year we should be looking at part B or sorry, part D to see if there's a better insurance plan out there for you because maybe you had a prescription change or maybe a formulary change is taking place on the prescription plan that you're on. So again, part D can be rolled into Medicare Advantage if you want it to be. Or you can keep a B and D separate and add on a supplemental plan.

Now just to make this very confusing, the supplemental plans, guess what? They have, they have letters too.

So when we're talking to people, often we'll say, we think, you know, in your situation, maybe you should sign up, for example, plan N. Right. So plan N is a supplemental plan, is one of the, I would say higher quality better plans that you can actually sign up for.

Has pretty decent coverage for what Medicare doesn't cover. So for example, it would cover the, it would cover the hospital deductible that we talked about.

It's going to cover the 20% of your part B that Medicare doesn't. It's going to cover usually your hospital co pays and CO insurance. It'll even cover some foreign travel, up to 80% of foreign travel.

Emergency, emergency only, by the way. So when you think about plan n, there's that 100% of the CO insurance member I said it was about $1,600 for your part a co insurance.

It would cover 100% of that. It would cover all of that hospital co pay that I talked about, all those costs up to an additional 365 days of when Medicare's benefits expires.

It would cover some hospice care, which also is covered under part A, some skilled nursing facility CO payment, especially if you're getting like rehab. And then as I mentioned, part B. But it still doesn't have anything to do with part D. Right.

So even if you choose a supplemental plan, understand that your part D is always a separate plan from, you know, all these other moving parts that I have. And by the way, I'm not promoting plan N for any particular reason.

That's just one that we tend to look at for a lot of clients that are looking for a good solid supplemental plan. That's not the Cadillac of Cadillac plans. Right. And you pay an extra premium for that.

So I'm going to do a quick refresh of everything that I just said and what road you can kind of go down as a participant. So if you were helping your parents navigate, there's two paths that you can kind of follow in that navigation.

One is to stay on traditional Medicare with part A, part B, part D and a supplemental plan. That's one path. The other path is that Medicare Advantage path. Right. So. So if you were thinking about like a.

Oh, some sort of like, sporting table, you know, that you were drilling it down to, you drill it down from Medicare, the big picture, and then do a bracket where traditional Medicare. And then over here, Medicare Advantage. Does that make sense? It does.

Kerrie: 00:17:53

So basically you gotta have A, B, D and the supplemental, which could be a variety of other letters.

Amy: 00:18:01

That's correct.

Kerrie: 00:18:01

Or Medicare C, which is Advantage. And that's the only thing you have.

Amy: 00:18:08

Okay, that's correct.

Kerrie: 00:18:10

Yep.

Amy: 00:18:11

Now, each of those items, each of those brackets are going to have different premiums associated with them.

One of the reasons why the Medicare Advantage plans tend to be so popular is because there's no additional premium on top of your Medicare premium that you actually have to pay.

,: 17490

Kerrie: 00:18:48

Sometimes possibly a lot higher.

Amy: 00:18:50

They could be.

And a lot of times what happens is with those situations, it's the expensive things like, you know, for the first six days that you're in the hospital, you're going to pay 3 or $400, right. But maybe your doctor visit, your co pay at your doctor visit is only $30 or $40.

Maybe your specialists are $50, you know, so those Medicare Advantage plans might not have an additional premium that you pay, but they might have higher costs out of pocket. So how do you break that down for your parents? This is our process. This is what we do when we're working with clients.

We would sit down and say, how many times do you go to the doctor? You know, who. Who are your doctors? Doctors. And how many times do you go see them? What are your prescription medications?

Do you have any upcoming surgeries that you are aware of? Is there a need for other.

Because one of the things about Medicare Advantage that a lot of people also like is that often there's some dental cleanings thrown in there, Part A, B, D, and the supplemental. At this stage of the game, most of those plans do not have any dental coverage in there. At this.

There's a couple of states where that's included, but most do not.

Kerrie: 00:20:09

What about vision?

Amy: 00:20:11

It depends on the type of vision. If you're talking glasses, then some of the supplemental plans will give you a credit of like $100 towards glasses.

If you're talking for like, getting your eyes checked, often part B will cover that regardless. And you're. Your advantage plan will cover that.

And if they're checking for things like glaucoma or any kind of eye disease, often you do get coverage for that as well, but the actual prescription is not covered. You know, the actual glasses themselves are not covered. So again, there's always exceptions, and this is why it makes it so hard.

But we sit down and we just ask those questions, like, tell me what last year looked like. If they're already on Medicare and you're looking for, you know, should I be shopping?

You can pull the report that Medicare actually sends and it lists out sort of like an explanation of benefits. How, you know, what did you use your insurance for last year? This is your first year.

You certainly should be able to pull out your explanation of benefits and, you know, maybe look down through your calendar or something like that. What doctors did you go see? How many times did you go see them?

Are they specialists versus are they general practitioners, you know, or your, your general PA or something like that? So, so it's asking those questions.

And then again, I always go back to the listing the medications, you know, what, what do you take for medications from there now you can start to do some research. And Medicare has a fantastic tool out on their website if you know how to use it.

And that's been one of the biggest challenges is that you have to know how to use it. I. For, for preparation of this particular podcast, Carrie.

are, I put in find a plan for: 2025

You know, just stick with traditional Medicare and tell me all of the different Medigap plans that are available. Well, that actually in the state of New York, I mean, it's pretty typical, like the same. The plans are pretty much available wherever they are.

And sometimes you get like a spousal discount, by the way. So if you're looking at something like that, make sure that they tell you that. But when I went out there, it listed a bunch of plans.

This is the Medigap. Now, this is sticking with traditional Medicare, you know, A, B and D. And I went out there and the Medigap plans, like I said, what are the letters?

A, B, C, D, G, K, L, M, N. Right. So those are the plans that are available.

So you can go and look and see what the plans are and they give you a range of what the cost is associated with the different providers that are out there. Now on the other hand, if I looked at, well, maybe I want to look at one of these advantage plans and I would be cautious about that.

Like, make sure that you understand what you're getting into. Carrie, just like you said, like around here we've heard don't ever do that. And I think you really need to figure out if it's right for you.

Just like anything else, you need to see if it's right for you. Now if you're not on any medications, you can skip over there. They actually allow you to put in your medications if you want to.

But if you're not on any medications or you just want to see what's plans are available, then you can go out and you can say, I would like to look at the Medicare Advantage plans that are available now.

went out there just under the: 14830

Kerrie: 00:24:09

Well, I did assist someone last year a little bit in my area and there was like a 115 or something crazy like that.

Amy: 00:24:18

In your area?

Kerrie: 00:24:20

Yeah.

Amy: 00:24:20

Yes. So and the: 14830

I mean for most of us that are in that are picking from our employer plans, there's three, maybe two plans. There's 32 different plans about.

Kerrie: 00:24:43

And maybe we didn't put the put a zip code in or something because I just remember thinking, how is any person supposed to go through and figure out what plan they should or want or figure out what they even want to look through and know? And it's just a very overwhelming process.

Amy: 00:25:04

Now I will say that in some states you can contact your office for the Aging and they will have somebody there that can actually sit down with with you and help you through this process. And a lot of people do not know that, that they can call the Office for the Aging to do that.

And of course our clients, you know, this is something that we talk to them about. Every single year. And again, health insurance once you're 65 is not a set it and forget it decision because plans can change every single year.

So once you're in the plan for that year, the plan is what it is. But every year that plan come in, can come in, change co pays and co insurance and medical or prescription coverage.

What you were taking last year may fall as a tier one drug, but next year it may fall as a Tier 3 drug. For whatever reason. You know, the insurance company can change that because they're the ones creating the tears for those medications.

So what we always say is just never set it and forget it. You know, every year review that.

And if you don't have a Carrie and an Amy or a Kate or, you know, Becky to actually come to, to get that kind of advice, then I would strongly encourage looking for like Office for the Aging or somebody like that.

Now, if you're trying to guide your parents through this process, then perhaps you could reach out to the Office for the Aging and get some assistance. What they will need from you is the things that I told you to put together a list of the doctors that your parents go to.

Approximately how many times per year do they go to them? What medications are they on?

If you know, if they have that, they can use that same tool that I'm talking about on Medicare.gov and they can talk to you about the pros and the cons and help narrow down the coverage that you might want.

Sometimes a free premium isn't the best answer for you because some of those Medicare Advantage plans actually do have a premium associated with them.

And that's okay because it, because of the things that you have going on in your life, ultimately you will pay less out of pocket even though you have a premium because your co pays and co insurances will be lower.

Kerrie: 00:27:13

Yeah, one thing. So I did.

One of my parents signed up last year and there's a local person here where we're at that wasn't necessarily from like any local top office where they assist with things like this, but he had more of an insurance office. But he specialized in Medicare selection and he didn't.

There was no chance charge for him assisting us, but he helped walk through all the different plans and he had a lot of knowledge about what plans were very good for our area. I believe he was reimbursed through Medicare somehow.

Amy: 00:27:52

Right.

Kerrie: 00:27:53

But he was very knowledgeable. He made us feel comfortable. And he was not like sales, like really trying to push us for any certain plan.

On the contrary, there was at One point in time, some people had set up a tent outside of Walmart and they were again, really trying to push some Medicare Advantage plans, which I think is what prompted the conversation about, with local people about what plan is good for everyone and everything. And I shared all that to say, I think it's really important to utilize your resources and do find those people, but make sure it's the right people.

Amy: 00:28:34

People.

Kerrie: 00:28:35

Make sure it's the people have your best interest at heart when they're trying to help you pick a plan.

Amy: 00:28:43

Yeah, we have a great resource, too. Carrie. That's a good point. In our area that there's actually a couple resources. One is more nationally. She's.

The company is registered in several states to be able to, like, help pick those plans as well. And then we have a great resource locally here in New York that we refer a lot of clients to that somebody can sit down and talk to them.

And I do think, like, we've vetted these. Like, you kind of vetted that person. I vetted these other two resources.

So if somebody comes to us and they're only looking for that kind of advice, we would recommend that if they don't, they can't get into. Or let's say that you're somebody who you're trying to help your parents, and you live out in California and your parents live in Oklahoma.

Well, it makes it hard to, like, go to the office for the aging.

But there might be somebody like these resources that we're talking about that might be a great option for, you know, you to work with to find the solution. Yeah, it's. That's. And we can put in the show notes the resources that we're talking about.

So if somebody is in, like, your area now, I want to make it clear we're not necessarily saying to you, like, you should use these people. We're saying they might be people that you might want to interview right there.

We have vetted them, we have worked with them, and we've had good experiences with them. But we're not saying, you know, this is 100% what you should do either. We think it's important that you do some of your own investigation work also.

And that is the nuts and bolts of. But it's hard because if you're worried about your parents and you want to make sure that they're taken care of for sure. Right.

I mean, that's something that's really important. You want to make sure that they're getting the maximum that they can get and the maximum coverage that they're getting.

Yeah, I think it's really important to be able to say, you know, do if. And mom and dad might not even, like, they don't know what all the options are even sometimes. So just even talking to them about the resources and.

And they don't even know, like, what am I supposed to do? And even the signing up of Medicare, like, if you're already on Social Security when you turn 65, you are automatically signed up for Medicare.

It's automatic. But if you haven't, if you're not on Social Security and you're approaching age 65, you need to sign up for Medicaid. It's not automatic.

Does that make sense what I'm saying?

Kerrie: 00:31:21

Yeah.

Amy: 00:31:22

Yeah. So it's important that people understand even that very basic part of it.

And I would say, you know, the start to get educated is not like when you turn 65. The start to get educated is about three months before you turn 65. You know that or six months before you turn 65.

Really, you know what plans are out, out there. You can't sign up for a Medigap plan or a Medicare Advantage plan until you have your Medicare card. You can't even begin to sign up for it.

You have to have your Medicare.

Kerrie: 00:31:56

Yeah, it's all the little things.

Amy: 00:31:58

Yes, ma'am, it is.

Kerrie: 00:32:00

And I think my thoughts and biggest takeaway from this is don't like, wait until the very end. I think there's so much to be said for a lot of this pre work.

Getting your prescriptions figured out and knowing what doctors you go to and spending the time to figure out what plan is good for you, I think is so important.

Amy: 00:32:21

Yeah, I think. Yeah, exactly. It's. It's doing that pre work. And so if you were saying what do I need to know in advance? I guess if we.

I was to set a timeline out there, I would say when your parents are 64 and six months. Right.

64 and a half, that if you wanted to start working with them on, you know, what, what's that data collection process, that, that's one piece of it, and then the second piece of it would be getting together a list of their doctors, a list of their medications, you know, how often do they see those doctors? I think all of that would be really important as well.

Kerrie: 00:32:56

Yeah.

Amy: 00:33:00

Well, it's been a pleasure talking about this particular topic. Hopefully this has been helpful to everybody who's been listening.

We'd love to know if there's other concerns that you have or questions that you have about. I know you guys just did a podcast on health insurance and tools and tips and ideas just in general.

But certainly if you have some thoughts or things that you're worrying about that you'd love to know about or know more about, let us know. AskRPGRooted. RootedPG.com is a great website to send that into and we'll try to get some podcasts recorded on those topics.

Also, make sure if you like this episode. Episode, excuse me, please share it with your friends, maybe share it with your parents. Make sure that it's out there.

We're trying to get as much education as we can in 30 minutes as, you know, available to people to get their brains thinking and know what's available. Carrie, any last thoughts from your end?

Kerrie: 00:34:02

I don't think so. I think it sounds all good to me and hope it was informative.

Amy: 00:34:07

Well, thank you everybody and it was wonderful to be back. I've missed, I missed the recordings.

Hope to be, you know, I would say, you know, coming back on and I think, Carrie, we were actually going to do a podcast possibly coming up about taking time off and the benefits, both emotionally, physically and financially in the future, based on yours truly taking three and a half weeks, weeks of vacation, enjoying beautiful Scotland, busting my back to climb some beautiful hills and see some beautiful sights. And I will be sharing in the future my experience and what I learned about taking that little adventure and that time off and the benefits of it.

So that'll be coming up in the future as well. So we have lots of good stuff.

Kerrie: 00:34:59

So.

Amy: 00:35:00

So stay tuned everyone.

Host: 00:35:01

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