The federal Medicare program is designed to provide health insurance for people who have reached the age of 65 (or younger but have been disabled for more than 24 months). However, the program is fraught with so many pitfalls that it's challenging to navigate without expert guidance. After all, we want to be confident that we are indeed protected. In this issue, we have as our guest, Veronica Rowell, founder of the company Medicare Chief, a licensed health insurance broker. How can one avoid mistakes and get the maximum benefit from Medicare?
- Veronica, you do a complex and crucial job. But don't you often encounter skepticism from people (like "they're going to sell me something now")?
- Occasionally, this sentiment arises at the initial stage. It means some have been "burned" before and had negative experiences with pushy insurance agents or brokers, or those who lack the necessary experience. But from the very first minutes of our conversation, all doubts disappear as they recognize they're speaking with an expert.
- Your specialization is Medicare. This insurance, in essence, is meant to make life easier for older adults. But why is it so complicated to understand?
- The longer I work in this field, the more I realize it needs reforms. There's a group of thousands of brokers like me who regularly interact with government agencies regarding the challenges people face. I am an active member of the NABIP (National Association of Insurance and Benefits Professionals). Changes are happening, albeit slowly. The system is indeed flawed and overly complex. It's impossible for the average person, regardless of intelligence and education level, to figure it out independently.
- Many believe that Medicare is free and covers everything entirely. Is that true?
- Firstly, Medicare is not a free program, and secondly, it doesn't cover everything. This year, the standard monthly payment for Part B is $164.90 per person with an income ranging roughly from $20,000 to $90,000 a year. Those who qualify and apply for the Medicare Savings Program don't pay for Medicare Part B. Qualifications vary from state to state, and applications can be submitted online or in person at the Medicaid office. On average and for simplicity, let's assume someone earning up to $20k a year qualifies for this program. So, if the income is below $20,000, then one falls under the Medicare Savings program. If someone's income exceeds the $90,000 threshold, they pay a higher amount, referred to as the IRMAA (income-related monthly adjusted amount). If you fall into this category, the Social Security office will notify you via mail, as they have data from the IRS. If your income has changed in the past couple of years – you can challenge the IRMAA.
Part A of Medicare insurance is provided for free to those who have worked in the US for a total of ten years or forty quarters, even with breaks in employment. If you don't have that work history, then Part A costs between $270 to $500 per month. That's, of course, a substantial amount. I often hear from my clients, "We worked all our lives, paid taxes, and now we have to pay again?"
Overall, Medicare has many gaps. The main one for Part A is a deductible of $1600. Notably, this isn't yearly, but for each hospital admission if there's a gap of more than 60 days between admissions. For Part B, the gaps are a $226 deductible and 20% coinsurance without a cap on the maximum amount. This is where most surprises arise for people. Therefore, an additional plan is recommended - either Medicare Advantage or Medicare Supplement, to make medical expenses more predictable.
- You mention Part A and Part B; what do they specifically cover?
- Part A covers hospital or hospice stays. Everything else is under Part B, which includes doctor visits, diagnostics, emergency services, physical therapy, blood transfusions, and so on. Medications are under Part D, which is separate.
Consider this scenario: a person retires, they don't have insurance, and they don't have Medicaid (meaning their income exceeds a certain limit). Then they need Part A, Part B, and Medicare Advantage, which includes a drug plan. Or, Medicare Supplement plus a drug plan. That's the bare minimum. There are also many additional plans, such as for dental services, but that's optional.
- So, does this mean that those with Medicaid are fortunate in this situation?
- If they don't need an additional plan, then yes. When some clients complain that they don't have Medicaid, I tell them that this might mean they have a reasonably high income. However, it's not always the case, as a couple earning $25,000 in most states already doesn't qualify for Medicaid. And that income isn't sufficient for a comfortable life, and medical bills can be quite significant.
- There are rumors about Medicare Advantage being "evil." Where did this misconception come from?
- This misconception comes from the misuse of the plan and a lack of information on how to use it effectively. Most likely, people are dissatisfied with Medicare Advantage when they don't check in advance whether their current doctors are covered and how well medications are covered. I strongly advise, before signing up, to do two things: check if your doctors – primary care and specialists – are in the network of the plan, and if your medications are covered. Most generic medications are covered by most plans. But when it comes to specific drugs – insulins, cardiac medications, and others without analogs – then coverage needs to be checked. Most negative feedback comes from such instances when someone is signed up for a plan that doesn't adequately cover their treatment.
There are also objective reasons people might not like these plans. One of them is the authorization of services. Expensive medical services, like certain surgeries or MRIs, require authorization. The doctor has to send a request for this service and wait up to 14 days for approval. Part A of Medicare insurance is provided for free to those who have worked in the US for a total of ten years or forty quarters, even if there are breaks in their employment history. If they do not have this work history, Part A costs between 270 and 500 dollars per month. These are, of course, significant amounts. I often hear from my clients, "We've worked all our lives, paid taxes, and now we have to pay again?"
There are many gaps in Medicare. The main one for Part A is a deductible of 1600 dollars. This is not annually, but for each hospitalization if there's a gap of more than 60 days between admissions. For Part B, the gaps are a deductible of 226 dollars and a coinsurance of 20% with no cap. This is where people encounter the most surprises. Therefore, an additional plan is recommended, either Medicare Advantage or Medicare Supplement, to make medical expenses more predictable.
- You mention Part A and Part B; what exactly do they cover?
- Part A covers hospital or hospice stays. Everything else falls under Part B, which includes doctor visits, diagnostics, emergency care, physical therapy, blood transfusions, and so on. Medications are covered by Part D, which is separate.
Consider this scenario: a person retires, has no insurance, and doesn't qualify for Medicaid (meaning their income exceeds a certain limit). They would need Part A, Part B, and Medicare Advantage, which includes a drug plan. Alternatively, they could have Medicare Supplement plus a drug plan. That's the bare minimum. There are also many additional plans, such as for dental services, which are optional.
- So, are those with Medicaid considered lucky in this context?
- If they don't need an additional plan, yes. When some clients complain they don't have Medicaid, I tell them it means they have a reasonably high income. But this isn't always the case, as a couple with an income of 25,000 dollars might not qualify for Medicaid in most states. This income isn't enough for a comfortable life, and paying medical bills can be significant.
- There's a notion that Medicare Advantage is "evil". Where does this misconception come from?
- This misconception arises from poor utilization of the plan and a lack of information on how to use it efficiently. Most likely, people get dissatisfied with Medicare Advantage when they don't check in advance if their current doctors are covered by the plan or how well their medications are covered. I strongly advise checking if your primary care and specialist doctors are within the plan's network and if your medications are covered before enrolling. Most generic drugs are covered by most plans. But when it comes to specific drugs, like insulin or cardiac medications without alternatives, coverage needs to be verified. Most negative feedback comes from situations where someone was enrolled in a plan that doesn't adequately cover their treatment needs.
However, there are valid reasons why some might dislike these plans. One is service authorization. Expensive medical services, like certain surgeries or MRIs, require authorization. The doctor has to send a request and get a response (approval or denial) within 14 days. A denial can be contested, and often on the second attempt, authorization is granted. Clients can't influence this process.
Meanwhile, Medicare Advantage offers many benefits depending on the state. You can get free vision checks and eyeglasses (annually), free gym memberships, and vitamins. The best plans in this regard are in the southern US.
- To access these benefits, is there a specific enrollment period like with the Affordable Care Act, or is it not season-dependent?
- Medicare has general and special enrollment periods. When someone turns 65 and gets Medicare, they have an initial enrollment period, allowing them to enroll in Advantage or Supplement regardless of the calendar. For Supplement, there's guaranteed acceptance within six months of getting Medicare; for Advantage, there are three months before and after. Additionally, there's a period from October 15 to December 7 when one can switch Medicare Advantage plans and make other changes.
For Supplement, there isn't a specific enrollment window, and one can enroll year-round. However, if you have Advantage, you can switch during the same October 15 to December 7 period. There's also an Open Enrollment Period for corrections (January 1 to March 31). Additionally, events like moving to another state can trigger a 60-day period to change your plan. For instance, moving from New York, New Jersey, or Connecticut to Georgia, Florida, or Texas. Each state has different Medicare Advantage and drug plans. They may have the same name across states but will have different numbers. A drug plan from New York would be considered out-of-network in Florida. It might temporarily continue, but it needs to be switched within 60 days. The first step after moving is to change your address (by contacting your local social security office or changing it on www.ssa.gov), and you can then proceed with switching your plan on the same day.
- You definitely need an expert to explain all this...
- I agree. Why reinvent the wheel when there are already professionals and companies in every state that know all this? Some operate on a national scale, like our company, which operates in 42 states. The main thing is to find a specialist with whom you feel comfortable and trust.
- You're not an agent; you're a broker. What's the difference?
- Formally, an agent represents one company. There's nothing wrong with that, but it's essential to understand that an agent can only offer the company they work for. A broker must have a license in each state they operate in, offers various companies, and works for the client. Ideally, they should know the products they offer and regularly undergo training, certification, and testing with these companies. We collaborate with about twenty companies and choose the most suitable plan for our clients from their offerings.
Certainly, here's the translation:
– How much do your consultations cost?
– For our clients, consultations are free! Companies pay us when we sign up clients for their plans, and this is always a fixed amount, to the dollar. The government strictly regulates this aspect, companies aren't allowed to pay more or less. Regardless of the plan's cost, we receive the same amount, so there's no loyalty to any specific company. This means there's no financial incentive for a broker to favor one insurance over another. My "benefit" is to ensure the plan is a perfect match for you. Because if you have problems, then I have problems. We provide lifelong support to our clients, and they primarily call us. Many of them have become like family members to us, and our family keeps growing as they refer friends and relatives.
– People complain about receiving numerous calls, letters, and even visits from strangers about Medicare. Who's behind all this?
– During the enrollment period, there's an aggressive advertising campaign from all sides. People are told they urgently need to change plans, that some new "magical" benefits have appeared. This advertising is on television, comes in the mail, and people get phone calls and home visits. But I always say, if it's not broken, don't fix it. If your plan works well, your medications are covered, doctors accept it, then there's no need to take any action. Even though we also do our own mailings, the advertising is so aggressive that even the most resilient have doubts. Behind all this are large call centers and insurance companies fighting for clients. They have the right to advertise, but there's a lot of misinformation being spread. For instance, not enough emphasis is put on the fact that qualification for plans depends on the state you reside in, among other factors. Some people tend to call the advertised numbers and impulsively change plans. The next day, they realize they made a mistake, and we help them cancel applications. That's why it's vital to caution people against hasty decisions. Don't panic and don't give your social security number, Medicare number, or other personal information to strangers. Medicare and Social Security never call you or visit your home, and they never offer plans with "magical" benefits. They only send info in a sealed envelope with the corresponding stamp, and it never pertains to Medicare Advantage or Medicare Supplement plans. Medicare and Social Security can only send you a bill for Part B if you aren't receiving a pension yet; if you are, then the cost of Part B is deducted from it every month.
– If I want a consultation with you, what do I need to provide? Do you need my medical history?
– We don't need your medical history. Initially, we get to know each other, and you let us know what you don't have or what you're unhappy with. We identify the problem and solve it. We'll need a list of your medications and the doctors you visit. Then, when you've chosen a plan and decided to sign up, we'll need some personal information: your address, Medicare number, and sometimes your social security number. We also ask which services are a priority for you, whether you need dental coverage, etc. A plan is always a package, and we can't pick it apart, so we select the one that suits you best.
– What if someone is healthy after 65 (it does happen), do they still need to enroll in Medicare?
– Absolutely. We are all under God's watch; we're fragile beings. Even if you're in good health, accidents like burns or fractures can occur, and we know how expensive medical services in the U.S. can be. Also, remember that there's a penalty for late Medicare enrollment. When you turn 65, you must enroll (unless you have coverage from an employer you're still actively working for). If you don't enroll in Part B, you'll face a 10% penalty of the Part B cost for every year you're late. This penalty stays with you for life. It can only be waived if you qualify for a low-income program like the Medicare Savings Program or Medicaid. The same goes for Part D. Many think they don't need Part D if they're not on medications. But when you eventually decide you need it, you'll be penalized for the months you missed. Unfortunately, that's our reality. No one gets arrested or imprisoned for this, but this unpleasant penalty could follow you for life.
– What else can you warn our readers about?
– I don't want to scare anyone, but health insurance is a specialty, like accounting or car repair. You can try to navigate it on your own, but it will consume a lot of time, and the likelihood of errors is higher. If you're 65 and still working with employer insurance, it's essential to compare that with a Medicare plan alongside a specialist and choose the more beneficial option. In any case, broker services are free, so why not consult the experts? There's no reason not to! It's crucial to work with someone you trust and enjoy working with. A good broker will be with you for life.
