Medicare and Medicare Advantage – The Basics

Michael Hughes  00:07

I’m Mike, your host. And on the show we tackle subjects in aging and family caregiving that can be pretty stressful to work through. And we do this with the help and advice of our skilled NaviGuides. Here at United Church Homes our guides have decades of experience helping families work through these issues, and we want to help everyone everywhere, age with abundance. So we’re lucky to have Robin with us today. And today, we are going to talk about all things insurance. I know, exciting, right? But this is important because when you turn 65, your world kind of changes when it comes to your health coverage in the United States. And you know, you get to know or be more familiar with Medicare, Medicare Advantage, and Medicare supplement insurance. And I want to start off this show, this show is really going to talk more about the basics, we can’t cover everything. But at least we can kind of share a little bit more about the history of these programs and how people might choose between them when it comes time to choose. So rather than Medicare, Medicare Advantage, Medicare supplement insurance, what’s kind of the difference between all those? Okay,

Robin Peconge  01:11

Good morning, thank you for having me. So with Medicare, it does take over once you retire and go on Social Security, and you’re no longer working. And typically what it does is it will pay for 80% of covered cost. There are some other things in there as well. But that’s the general. So people had a 20% that they would be responsible for. So originally, what was very popular with Medicare supplement plan, they did have several plans to choose from, but the most popular was Plan F or plan G, both of those plans, if Medicare paid any portion of the claim, then they would pick up the ballot. So hence nobody had any out of pocket, which was wonderful. When you turn 65, you’re guaranteed coverage. So you can choose any medicare supplement coverage plan company, the one that has the best rate for you, and you’re all set. But after that six month period, you might encounter some health issues. So as the years go on, your premiums go up every year with your age for most plans, you may look for other coverage. But if you’ve had health issues, now you have to go through underwriting and not guarantee coverage. So your premiums at this point could have raised significantly, it has very easily gotten to the point where someone may have to choose between getting their medications covered and getting groceries paying utility bills. And that’s where the issue arises. And that’s when the Medicare Advantage plan was born.

Michael Hughes  02:39

Can I just you know, so? Because this has interest because I you know, that’s the first time it’s kind of been explained to me like that. And that’s really interesting. So before Medicare Advantage. I just wanted you to have traditional Medicare, which has a set level of coverage. People do pay premiums for Medicare, right? Do they usually come out of Social Security? Is that right? So how does it work?

Robin Peconge  03:02

Yes, here worked into so many quarters, then Part A is covered. There’s no premium technically, but then Part B Yes, there is an amount taken out every month like right now. I believe that $164 Okay, yeah,

Michael Hughes  03:15

a lot of people don’t know that right? I mean, a lot of people don’t know that they think Medicare is free, but know that it comes out of Social Security. So then you have covered 80% of the costs. Is it 80% Like no matter what like if I turn 65 And then six months later something horrendous happens to me and then I need millions and millions of dollars in coverage. Medicare recovery, right? So the idea

Robin Peconge  03:38

Okay, it’s correct. I mean, there are like I said, there are some other things like when you go to the hospital, you have a deductible, but in general and you also for Part B there is a small deductible every year but other than that once you meet those deductibles it is just a flat 80%

Michael Hughes  03:54

Okay, and so they’ll pick up the cost but then the remaining 20% I would be responsible for 20% is what I would have bought medicare supplement insurance so that they would pay a little bit each month and off the top of your head. How much did a Medicare supplement insurance plan costs per month or

Robin Peconge  04:15

for what even right now when you first get one if you’re a woman it’s a little less expensive than a man but I’m around $100

Michael Hughes  04:22

A month Okay, so Alright, so I’m on Medicare I’m 65 and paying let’s say 265 bucks a month 264 Whatever it might be and then I as I grow in age I get my health conditions might get a little bit more significant that supplemental insurance plan will know that you know it may cost a little bit more to cover me so they’ll raise premiums which they’re allowed to do and and and before Medicare Advantage and that’s where he kind of got into trouble right?

Robin Peconge  04:50

Well except for with Medicare Supplement. It’s not based on claims history. It’s strictly based on your age. So it goes every year. Okay, yeah,

Michael Hughes  04:58

yeah. Okay for Fact. Okay. Okay, so everything goes up with age. And that was one of the things we need to understand is that you know, as you age, again, you know, your cost of health increases, and they will be reflected in premiums that you pay. Okay, so Medicare Advantage was born that way? Well, that’s a Medicare Advantage plan.

Robin Peconge  05:20

Okay, so those were designed for people that had those increased premiums. And again, they were having to make those tough decisions on what if they were going to pay those premiums, or if they were going to use that money for other things. So the Medicare Advantage, there is no monthly premium. There’s co-pays much like traditional employer type insurance. So there’s more club sharing for the member than there is with a supplement. So you’re getting rid of the monthly premium, so you have extra money in your pocket. But you could have a higher cost if you had a medical event, or if you go to the doctor a lot, if you see a specialist , if you have a lot of testing, things like that. And that sounds great, especially to those individuals that really don’t go to the doctor very much. But when you have someone that does incur maybe a chronic illness, not necessarily a large event, like a heart attack, or something like that, but someone that developed type two diabetes, that develop that maybe already had diabetes, but it’s getting a little worse, and now they have neuropathy, and maybe their kidneys are starting to have some issues, different things like that, that’s when it becomes troublesome. Okay, with Medicare Advantage plans a lot, again, like employer insurance, there’s networks involved, even though Medicare Advantage plans must base how they’re going to pay something off Medicare guidelines, they can also create their own guidelines on top of that. So although something might not have had a prior authorization requirement under Medicare, it now will under a Medicare Advantage plan. So you know you have networks to choose from, you have prior authorization guidelines, and that’s where it can become a little tricky.

Michael Hughes  07:05

What is someone’s experience? Like? Let’s say I go to the doctor for a regular checkup. And I have Medicare and I have a Medicare Advantage plan. And my experience is, is the experience more on the doctor side, you know, for the Medicare Advantage versus Medicare or is it I mean, I do I even notice the difference when it comes to that. As long

Robin Peconge  07:29

as your doctor is in network, you won’t notice the difference? It typically is on the billing side. That’s where they noticed that your

Michael Hughes  07:36

Friends are all doctors and network with Medicare.

Robin Peconge  07:39

Yeah, yes. For the most part, I mean, I suppose you might find someone in a very rural area or something like that. But yes, and you’re actually all over the world. Oh, okay. Medicare, if you’re traveling, that is the other if you’re a snowbird or if you’d like to travel in your retirement, you would want to really look at that because Medicare Advantage plan, you cover emergency but it’s typically emergency room or urgent care if you have to stay in the hospital for a long term time. In a hospital. When you say long term, you might be looking at a week or two. But that could be probably problematic with a Medicare Advantage plan.

Michael Hughes  08:15

Okay, so if you’re someone that is looking to travel a lot, snowbirds, you may spend months outside the country, you may look at more traditional Medicare as your benefit versus a Medicare Advantage plan. Yes,

Robin Peconge  08:28

A lot of Medicare Advantage plans are very large companies. And they may have a huge network for employer type insurance. The network for Medicare Advantage, it’s based on the county that you live in

Michael Hughes  08:41

The county and the city may be interesting. Can we dive into this a little bit because it just comes to mind? You know if I’m on an employer plan for years and years and years, that’s kind of what I’m used to write and used to do things like in network doctors out of network doctors, HMO plans, PPO plans, HMO plans, I have to see certain doctors PPO I can see more. Sorry, this well, but but but but I guess it’s kind of like you know, I’m 65 and now I’m on Medicare Advantage is kind of like a kind of a parallel experience. Right?

Robin Peconge  09:18

Except for the networks, I don’t know if I can call an insurance company to give you an example. Sure. Okay. So United Healthcare is one of the largest works for both employers based on individual type coverage as well as Medicare Advantage. However, when you’re in a Medicare Advantage, and looking for a network, it is a different network. But if you had employer based insurance and had UnitedHealthcare, which I believe it’s one of the largest networks in the country, you would not see the same issue.

Michael Hughes  09:48

Okay, but it could be though, when you let’s say if I’m on an employer plan and I have x, y is certain Canadians have to say Zed. So I so I’m I I have an employer plan X, Y Zed health insurance company provides health insurance. I turned 65. I’m searching for a Medicare Advantage plan. I’ve liked my experience with my health insurance. So far, X wise plan has a Medicare Advantage plan. I choose that. But in choosing that it could be the case where you know, my doctor might be network net, or Larissa, what you’re saying?

Robin Peconge  10:26

Yes, but when it is locally, you’re probably not going to see much change if it is mostly when you travel. So if your doctor visits XYZ locally, more than likely they’re going to take it with a Medicare Advantage plan as well, it really is troublesome when you travel. Okay. Okay, so that’s good to know. And also choose the benefits that will be different. So with the Medicare Advantage plan, you’re really looking at the county that you live in. So you go by zip code, you typically will also look at the medications that you take, also your preference of doctors or network. So those are the types of things that you kind of plug in when you’re looking for a Medicare Advantage plan, it wouldn’t be just saying, Well, I was really happy with this company here. So that’s the Medicare Advantage plan that I’m going to choose.

Michael Hughes  11:10

Got it. So if we could run this down, what are the things that people should check? Before they choose a Medicare Advantage plan, and you mentioned, obviously, your doctors being in network, but if you get just kind of restate that and say, you know, three, four, or five things that you should be looking at, and considering, okay, so

Robin Peconge  11:29

the premium, if you can easily afford a supplement premium, that would be one thing. As far as Medicare Advantage plans, you would just look at maybe a worst case scenario in one year, if you had to go to the hospital, if you had several sublet, or specialist appointments, diagnostic testing, that sort of thing. And your agent can help you do this, if you look at your Summary of Benefits and say see what a worst case scenario would be. Because with Medicare Advantage, the nice thing is they do have a maximum out of pocket. As we said, with traditional Medicare, it’s just 20% forever. So if you couldn’t afford that maximum out of pocket and a worst case scenario, then a Medicare Advantage plan would be fine for you. And it could be fine for many years, you know, where you have very low out of pocket, but then in the event that something happens in one particular year, if you can afford that max out of pocket, then that would

Michael Hughes  12:22

be great. Yeah, so that’s important, because I know that. You know, I’ll give you an example. If I have an employer based plan, and something terrible happens, you know that I have a deductible. Often these insurance means volunteer, they have what they call a maximum out of pocket spending for each year, right. So if I were to, you know, fortunately get sick in let’s say, December, and I were going to the hospital, and I had a Medicare Advantage plan that I would basically pay out of pocket to my maximum pocket, right? Isn’t the deductible plus the out of pocket? Or is it just the

Robin Peconge  12:59

So when Medicare Advantage plans, like for instance, in the hospital, most plans have that situation where you pay a certain amount for like the first five days. So it could be $250 a day for the first five days. And then of course, you have your co-payments for doctors and specialists. And then it’s typically a co-insurance for diagnostic testing. So those are the types of things that you look at until you reach your maximum.

Michael Hughes  13:24

Gotcha. Do you reach them? In January between maximum buttocks? But that’s it, right? I mean, I don’t have insurance. Yes. And I’m not wedded to my Medicare. I mean, just like my employer has a plan. And, you know, I kind of take the plane my employer has but in Medicare Advantage, I mean, you can change every year if you wanted to. Right?

Robin Peconge  13:41

Yes, there’s an annual open enrollment from October to December every year.

Michael Hughes  13:47

And I think the last question I’m gonna ask is that Medicare Advantage plans have what they call supplemental benefits. And that’s different from traditional Medicare, right? What are supplemental benefits?

Robin Peconge  14:00

Okay, so there are additional benefits that the companies offer such as transportation, you might get 21 way visits per year to medical appointments, which is lovely for a lot of seniors that maybe don’t drive anymore. There is an over the counter benefit. It really varies based on whether you’re on state assistance or not. You can get anywhere from maybe $50 A quarter to $200 a quarter even now there’s a grocery benefit for one of the companies where you get $130 A month for groceries if you get a debit card and refill it every month. Some of them offer a utility benefit. There are alliances, exercise plans or fitness centers that are free membership.

Michael Hughes  14:43

So just clicks for me here that the supplemental benefits I guess the Medicare providers are recognizing that not not everything that benefits your health and wellness is just from visiting the doctor right i mean they want you to have healthy food they want you to exercise They want you to, they want you to eat, they want you to age abundantly, right. And so they want to give you these benefits that will help with wellness, because they know down the road that I keep, I don’t know, your health from getting worse. So that’s very interesting. And I suppose that that’s sort of another factor when you’re choosing a Medicare Advantage plan is that one company may offer, you know, one type of supplemental benefit or another but you shouldn’t you shouldn’t base your decision on choosing a Medicare Advantage plan, sole supplemental benefits, right?

Robin Peconge  15:35

Correct. And as matter of fact that, you know, a lot of people kind of start out that way, they might hear that their neighbor has this benefit, and they want to know, well, why can I have that plan, and excuse me, but again, you want to plug in your medications first, and you want to plug in your work of doctors first and make sure that those are covered. And then from there, you can kind of narrow it down to the other benefits.

Michael Hughes  15:56

Got it. So let’s say that again, just so our listeners just say that that’s great advice. So when you’re choosing a plan, plug in your doctor, make sure that the doctor is in network, I’ll get your prefer, yes, pharmacy network that you prefer the premiums, of course, and then and then, you know, the icing on the cake, so to speak, might be the supplemental benefits, right? Yes. And there’s a lot of that

Robin Peconge  16:20

as well. Because, you know, when your income is there, there’s extra help you can get from in general and, and that sort of thing, but that is the basics.

Michael Hughes  16:28

Okay. Yeah. And that’s, and the basics. You know, just in talking with the basics, it just opens up so much more in terms, you know, things that we could talk about and, and so those are going to be part of future episodes, I suspect from this one here. I think we’re going to leave that here for this episode. And thank you, Robin, for sharing this knowledge with us. And thank you, our listeners for listening to this episode of Ask a NaviGuide. And it’s part of the agent podcast series brought to you by United Church Homes. If you liked this week’s show, please share and subscribe. I know every single podcast host says that so we can bring you more of this great content. For more information about the UCH NaviGuide program, please visit www.uchnaviguide.org. For more information about United Church homes, visit www.united churchhomes.org. We’ll see you next time.