The basic Guide to Medicare for every Michigander! Everything you need to know to become an EXPERT!
If you would like further information on planning for or reevaluating your retirement, or simply want to chat, give us a call at 231-421-7391.
Alright! So you all are here today because you’ve got a big birthday coming up. Or maybe it just happened earlier this year. But you’re turning 65 and you’re going on to Medicare and it’s a big decision to decide how Medicare is going to work for you. But, this video is going to show you the basics of Medicare for every Michigander and believe it or not, you’re going to be pretty much an expert by the time you’re done viewing this.
So let’s go ahead, let’s get started.
Now, what I’ve always said, and I’ve been in this business for over 10 years. What I’ve always said is that when a person turns 65, they’re one of the most popular people on earth. And if you haven’t experienced this yet, its one of two things, you’re either lucky or it’s coming. So be prepared!
Everybody knows you’re turning 65 right?! Your phone is ringing off the hook. You’re getting a big pile of junk mail. Some of which looks really official, and you don’t know if it’s coming from Social Security or Medicare itself. You don’t know whether to fill it out and send it back in. There’s even people showing up on your doorstep and their all trying to peek in. They’re going “Hey, let me talk to you about my insurance!” Or, “the insurance that I can offer you!” It’s because you get on a list that’s the way the world works right now. There’s a list of people that are turning 65 and you’re on that list. There’s a lot of people out there who are trying to talk to you about the different options that go along with Medicare.
Now, you’re going to want to find somebody independent. That’s a tip for you! If you’re looking for insurance, I would suggest, working with somebody who is an independent broker who can offer you a variety of different options. Everybody’s situation is different, what your neighbor has may not be what you should have, right? Everybody’s situation is different, so, find somebody who is independent who can help you out!
But, right now there’s really no reason for you to stress or say “This is so confusing! I don’t know what to do!”
Today, right, just hang in there with me for a few minutes. All of the pieces and the parts of Medicare are going to start to make sense to you. You’re going to be able to make a logical educated decision as to what option that supplements Medicare is best for your situation. Alright? So, talking about pieces and parts. Lets go ahead and get started by talking about Part A of Medicare!
Now Part A of Medicare is simply hospital coverage.
You’ve already paid for this in your working years with your FICA taxes. When you looked at your paycheck over the years and you saw all the different taxes that were coming out. Well FICA taxes, that you saw on that paycheck stub, is what funded this part of Medicare. Now it’s just simply room & board in the hospital. It doesn’t cover any kind of procedures, that’s coming up next, this is just simply; you’re admitted to the hospital and you got a bed. Okay? Depending on the length of your stay, with just Medicare Part A, there is going to be a deductible, and different co-pays that go along with that hospital coverage.
I love that little cartoon down there. I don’t know about you, but I’ve spent some time in the hospital with my youngest son. I was on bed rest and I always used to just, at first it was funny and then it wasn’t to funny. After that, they come in to wake you up to make sure that you’re okay, but I like this one because it’s waking the fella up to take his sleeping pill. Hospital days are fun aren’t they? But that’s the first part of Part A.
The second part of Part A is Skilled Care.
Now this would be in a care facility okay? So, there’s different requirements that you have to meet before your Medicare Part A is going to cover that stay. You’re going to have to be in the hospital for 3 days, prior to going into the facility and you have to be recovering from something.
So for instance, my step-father, who has since passed away, he was diagnosed with Lewy Body Dementia, he suffered a fall and was in the hospital for 3 days. Then he went to Meadowbrook, which is our care facility in Bellaire and the first 20 days were covered by Medicare and also days up until 100. There was some coverage there. Not because he had Lewy Body Dementia though, Lewy Body Dementia you do not recover from. This was because of the fall, he was recovering from some of the injuries from the fall. So if you have a stroke and your recovering, you break a hip and your recovering, that’s when Medicare is going to pay for Skilled Care. After 100 days though folks, Bupkiss! It’s a Yiddish word meaning “nothing”. You’re on your own and that’s when you should have a long-term care plan in place.
Now, I’m not necessarily talking about traditional Long-Term Care Insurance. There are a lot of different options out there that you can use to protect your assets against the cost of long-term care. It may even be that your long-term care plan is to stay with your kids. That might be a plan, but at least you have a plan in place. But be nice to your kids because they are going to pick your nursing home!
Now we go onto Medicare Part B in the Guide to Medicare.
This is kind of the big bites of Medicare and the reason why we refer to them as the “Big Bites” of Medicare is because this is anything performed by a medical professional. Like a doctor, a physician’s assistant, even a nurse, whether that be in a doctor’s office or in the hospital. So, Part A is just the room & board in the hospital, Part B kicks in to cover any of the procedures while your there. Now there is an annual deductible.
Well first of all, lets talk about Part B costs, because unlike Part A that you paid for in your working years, you do have to pay for Part B. When you become 65 and you do go onto Medicare, you do not want to decline taking part B unless you have credible coverage in place. If you do, and you decide to take it later you’re are going to get a penalty and you don’t want that. For most folks right now, it’s $144.60 a month. Now that is coming from your Social Security if you’re currently taking Social Security. It’s going to automatically happen, if your taking Social Security and you won’t have to sign up for Part B.
However, let’s say that you’re still working and you’re losing your work coverage, or other coverage that you have when you turn 65. And you’re not going to take your Social Security yet. Well, you’re going to have to somehow set up a payment plan to pay for that Part B out of your Bank account. You’re going to want to do that about 3 months prior to your 65th birthday. Okay? That is how you are going to be paying for Part B.
Now what does Part B offer to you in terms of coverage?
Well, there is a $198 deductible, which resets every calendar year. That deductible is not set in stone, I remember it being as low as $90 dollars but of course everything goes up with inflation. So, right now, it is $198. Once that is paid, that $198 deductible, that’s paid to your doctor who sends it on to Medicare. Then, we see that 80% coverage of all those services that we were talking about. So, outpatient services like; doctors visits, labs, any kind of procedure, x-rays. Preventive services are also covered like, colonoscopies, or mammograms. And also, durable medical equipment, so if you want to do some wheelchair racing, I don’t know anybody who WANTS to do some wheelchair racing, but hey if you have a wheelchair, might as well have a good time! But other durable medical equipment like, wheelchairs or walkers.
Those all fall under Part B of Medicare.
Now, Part C in the guide to medicare should be next right? A, B, C makes sense! Nope! We’re going to skip Part C for a minute because it makes more sense to talk about Part D first. Medicare
In your Guide to Medicare Part D is your prescription drug plan.
So, we want to think “D” for Drugs, if you think “D” for drugs, that’s going to remind you that is what Part D is for.
Now, most prescription drug companies are moving away from using agents to help sell their products. However, Medicare.gov has really actually improved, it’s a website, a governmental website that has improved, surprise! Especially this last year where you can get on the website, which you see there on the screen. That will help guide you through choosing a prescription drug plan that is going to work best for you. Most zip codes in Northern Michigan, there’s about 30 plans that are available. Don’t just go with the plan that your neighbor has. Because these plans really are specific to your zip code, the drugs that you are taking, the prescriptions that you’re taking, what pharmacy you want to use, whether you want to use mail order.
All of those things play into what plan is going to be best for you. However, Medicare.gov does a really good job of leading through step-by-step and going through a sorting type of system. Where they show you what plan is going to be the least out-of-pocket cost for you.
Alright, so, you’re learning so much right? Let’s do a learning check! We’ve gone over what is considered Original Medicare. So, we have;
- Part A which is your hospitalization
- Part B which is all of your medical services
- and then we have Part D for drugs which stands for your prescription drug plan
Pretty easy so far, right? So, a lot of people are going to be asking, “Can I have Original Medicare Alone?” We see Clint Eastwood down there. Whenever somebody asks this, I always say, “Well how lucky you feelin’? Feel lucky punk? Do you?” You’re not a punk but it always reminds me of Clint Eastwood.
The point is that if you only have Medicare alone and you don’t have any kind of supplemental insurance in place whether that be an advantage plan or a Medicare supplement, you’re really rolling the dice. Because wouldn’t it be nice if we had a crystal ball, and we could tell what our health is going to be for the next couple of years, or the next 10 years. But we really don’t know what is going to happen in terms of our health in the future. Specifically, anyway.
So, if you only have Medicare by itself, you’re setting yourself up to having some out-of-pocket costs that have no cap or limit on them.
You know it’s one thing to pay 20% for Part B, you’re responsible for your 20%. It’s one thing to pay 20% of $100 office visit, Eh, $20 no big deal. However, Triple Bypass Surgery, just do round numbers, if it costs $100,000, which if you’ve looked at any medical bills ever, you’ll know that procedures are really expensive. That’s a $20,000 bill and I don’t think any of us want that.
So, to help curb those costs, there are a couple of different ways we can do that. With original Medicare, A Medigap Policy is what helps a gap, fill the gap in your Medicare coverage. It works very easily, you go to the doctor, and the doctor sends the bill to Medicare. Medicare pays the approved amount that they have for whatever procedure you had. Then you’re Medigap picks up the remainder. For most Medigap plans, not all of them, because there is about seven standardized plans that the government has come out with to supplement Medicare. Those are standardized plans some of them are going to cover almost 100% of that cost, after the deductible. Well, they do, there is one that does. Then it gets a little less coverage as time goes on.
So that’s how a Medigap policy works, it’s going to cover the payments that Medicare doesn’t, that’s a Medigap policy.
So that’s Original Medicare.
Now we get to go to Part C in the Guide to Medicare!
We went a little bit out of order but now we are at Part C. The reason why I waited to do Part C until now is that this Part C is called a Medicare Advantage plan. Joe Namath talks a lot about these plans on TV if you’re a TV watcher. You’re going to see a lot of commercials for these plans as open enrollment approaches as well. But what a Medicare Advantage Plan, or Part C of Medicare, covers are they roll into one plan. They roll in your hospital, your doctors, your prescriptions, and some of those plans also offer some extra benefits. Like, Dental or Vision, depending on the plan. In Northern Michigan, the companies that offer these plans and an independent agent should be able to explain them to you.
I can’t get into details because the Medicare itself has some pretty strict guidelines about what you can talk about unless you’re face to face with someone who has agreed to an appointment. That’s government rigamaroll.
Anyway! Aetna, Priority, Humana, Blue Cross Blue Shield, these are the companies that offer the plan and its almost like Medicare outsources your coverage. They send that $144.60 that you paid for Medicare Part B; they send that to that private company. Then the private company is responsible for your healthcare. So, this works a little bit differently than the Medigap. You still do have some deductibles and co-pays for doctors’ visits, hospitalization, prescriptions, dental and vision. It just depends on the company and the plan you go with which would determine what those deductibles and co-pays look like. So that’s Part C!
Now, you know! Part A, Part B, Part C, and Part D!
A is Hospitalization
B is your Medical, Procedures
C is an Advantage Plan that rolls A, B & D all into one.
D is your Drug Plan
So that’s how it works in Michigan, you have Medicare that you’re going to start the first day of your birthday month. It doesn’t matter what day of that month you turn 65. Medicare starts on Day 1 for you. And If you don’t have employer coverage that’s going to go into Medicare with you, you really have the choices of the Supplement or the Advantage Plan. But some of you are like what do I do now?
You can contact Hudson Wealth Management/Hudson Agency. We have a number of licensed agents who would be able to help you and navigate you through what would be the best decision for you! It really does make a difference what your unique situation is, as to what plan will work with those parts of Medicare. Alright?
Now, we’re still dealing with the craziness of Covid and we all understand that. We do have social distancing measures in place at the office if you’re close to Traverse City. If not, our agents are on the road and visit folks all over Northern Michigan and of course, we can always do a phone conversation or we can Zoom. Like this right now. So, it’s been my pleasure talking with you about Medicare. Congrats on turning 65! We hope we hear from you soon. We’d love to help you out! Have a great day!