Medicare Part 2

November 13, 2020
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Frank Tehel:

Welcome to Finance with Frank. My name is Frank Tehel. I am a Certified Financial Planner and a Fiduciary. I work with October Effect Limited, a registered investment advisor. We're registered in the state of Virginia and we're housed in Virginia Beach, offices at Town Center Complex. Today, I have a special guest with me, Patty Ramsey. And this is the second episode with Patty. We're going to go on to the details of the Advantage plans and then go on into some of the Obamacare changes that are going to affect the non-retirees. Patty, tell me what other details we needed to talk about on the Advantage plans.

Patty Ramsey:

I would really want to just say, if you do have a Medicare Advantage plan, during this annual enrollment period, it is the time to make sure that plan is still good for you. And what's important is checking those prescription drug plans, prescriptions that you are currently on, to find out if that plan is still the best plan suited for you. I can tell you I'm really excited for 2021. The plans coming out for 2021, we have a lot of increases, some better benefits. We have really good plans for veterans. They actually are going to help pay back a small portion of your part B premium that you're paying. So it's really exciting for 2021. There's a lot of new products coming out and a lot of good benefits that are added. So, it's real important to go ahead and make sure that you get with an agent that's going to check your drugs and make sure that plan is the best fit for you.

Frank Tehel:

Thank you, Patty. So now we're going to move over and address the questions for those people who are not retired or immediately getting ready to retire. And for medical reasons, that's anyone 64 and older, because at 64 and a half, you should be applying for Medicare in one way or another. Prior to that, you're going to be living with some of the individual cares or the group plans for businesses, Patty, what's going on in the Obamacare world? I know the last year, we've seen things with the President talking about this, that, and everything. Has it really changed the plan?

Patty Ramsey:

Not real big changes currently, that's still up in the air. There's still, I guess, a battle you could say going on, if there's going to be changes or not. One thing that I do like to kind of get out there because this took place... Actually it took place I think a couple of years ago, but it's like the word didn't really get out. It used to be if you owned a small business, if you were a one-person band, or if you were a husband and wife that owned a business, you could not get a small group policy. Now you can get a small business, small group health insurance policy. I actually have a couple that own their own business. And I actually quoted, they currently... They don't get any subsidy from the marketplace, so they have to pay full price and it's a pretty hefty premium for them.

Patty Ramsey:

I actually quoted them to go on a small group policy because they can now, even though they're husband and wife and business, they don't need any other employees to get that plan. And it was about $140 per month cheaper by going on to that small group plan versus the individual plan. So that's really good news. I'm excited to offer those products coming up. You actually can get them any time and even for a one person. So, I mean, there's a lot of real estate agents, they have their commissions paid to an LLC or even hairdressers. I mean, it's unlimited. Just even a one person, you can get that small group plan and actually save some money and most time, have better benefits with that as well.

Frank Tehel:

Is the enrollment period for the individual Obamacare participants the same, or has that changed?

Patty Ramsey:

So, that is open enrollment. That will start November 1st. And it runs through December 15th. So November 1st through December 15th is open enrollment.

Frank Tehel:

But these small group plans-

Patty Ramsey:

But these small group plans, you can put them in place anytime.

Frank Tehel:

So that's year-round. Now, once they're in a plan, do they have a specific time period to change the plan?

Patty Ramsey:

For the group?

Frank Tehel:

For that one person or two person?

Patty Ramsey:

For that one person? I mean, so they'll have a yearly renewal.

Frank Tehel:

So they'll renew it at a similar time that they've put the plan in place.

Patty Ramsey:

Correct. Correct.

Frank Tehel:

Good. So I know from a tax perspective for that Obama participant, they no longer have to have information going on their tax return as to are they participating in a plan. What kind of supplements are still available for individuals within the Obamacare program?

Patty Ramsey:

I mostly deal with Tidewater area here, Norfolk, Virginia Beach, Chesapeake, Suffolk, and for Norfolk, Virginia Beach, Chesapeake, really Anthem and Optima are your two carriers. It seems like every year, one company's a little bit cheaper than the other. And then it flip-flops to the following company. All of that stuff will start November 1st. I don't really have a lot of the information on what the big changes will be for marketplace.

Frank Tehel:

Can that person applying for that product still get a supplement from the government? Is the government-

Patty Ramsey:

The subsidy amount to help pay the premium?

Frank Tehel:

Right.

Patty Ramsey:

Yes, it will be dependent upon their income and as 2020, also people now qualify for Medicaid that we didn't have before as well. So that's very helpful for a lot of people that their incomes were very low, they didn't qualify for marketplace.

Frank Tehel:

So go into that some more. How did that come about? If your income is so low that you can't even get something out of marketplace, you can go directly to Medicare?

Patty Ramsey:

No, Medicaid.

Frank Tehel:

Medicaid?

Patty Ramsey:

That's a state-provided. It's federal and state, but state-provided.

Frank Tehel:

State does the administration, federal government provides some of the money.

Patty Ramsey:

I believe so.

Frank Tehel:

So that's now effective and the enrollment is the same period?

Patty Ramsey:

Yes. You can apply for Medicaid at any time. You don't have to wait for open enrollment. If you don't have coverage, you can apply for Medicaid any time.

Frank Tehel:

That is truly a government program.

Patty Ramsey:

Yes.

Frank Tehel:

That's not Anthem or-

Patty Ramsey:

Yeah, but the different companies will provide those products for Medicaid, so you will have your choice of which company.

Frank Tehel:

For somebody that's just now going into the Obamacare or the Medicaid program, what's the paperwork like? Is it extensive? Is it straightforward?

Patty Ramsey:

There's not a whole lot to it. I mean, based just... your information, your income, address, all your personal... date of birth, that kind of thing. How many children that's going to be on your income tax or living with you. So all basic information. I actually don't really deal with Medicaid, but if somebody calls me and I'm entering their information on the marketplace, which is really, that's what qualifies you. Entering all that information is going to let you know what you're eligible for. So at the end, it may say, "Okay, this person may be eligible for Medicaid," and they will send it on to Medicaid. And once it leaves that, I'm kind of out of the picture for the Medicaid.

Frank Tehel:

So they actually have to start with you and apply for the Obamacare to get to that program?

Patty Ramsey:

Yes, or they can actually go directly to the Virginia Department of Medicaid and apply. If they don't want to do that, they can actually call the marketplace, call myself, and if I enter your information, depending on your income level, it'll automatically shoot it to Medicaid for approval.

Frank Tehel:

So if we're going through this enrollment process and you start the paperwork, I'm assuming that I, as a new client would have two really important questions. How much is it going to cost me? And how long before I know if I actually have insurance? Can you answer those?

Patty Ramsey:

Well, I actually have a program that I do a quick quote, so I can roughly kind of figure out which way you're going to go and what those amounts are before I actually enter you onto the marketplace.

Frank Tehel:

In other words, before you knew the paperwork, you run the program and that tells you where you want to go and what the options should be?

Patty Ramsey:

Correct. Kind of gives you a little head's up where you're going to fall.

Frank Tehel:

And then, once the paperwork's done, how long before they know they have insurance?

Patty Ramsey:

They'll know immediately, really pretty much. I mean, as far as for marketplace, because we'll actually select whatever product they want to go into. Now, if they qualify for Medicaid, it could take a couple of weeks, I would believe. But they'll get notified from Medicaid. So once somebody comes back and it says they may be eligible for Medicaid, I'm out of the picture once that happens.

Frank Tehel:

So if you're doing the application, once you finish the application and you commit the money side of it, they know they're insured?

Patty Ramsey:

Correct.

Frank Tehel:

That's a nice feeling, I would assume.

Patty Ramsey:

Yes, and I actually email them the information. They get it as soon as I enroll them, they immediately get a confirmation email letting them know what they enrolled in and all the information about the plan.

Frank Tehel:

That has to be a piece of comfort for a lot of those people without insurance.

Patty Ramsey:

Then the plan will actually mail out their card and information as well.

Frank Tehel:

So let's go down that road a little farther. You have children that are growing up. And I know they can be on the parents' plan for a certain period of time. What is the age when they have to migrate off?

Patty Ramsey:

So they can be covered under their parents' plan until age 26, and then they do have to come off after that.

Frank Tehel:

And they then would meet with you and set up their own marketplace plan?

Patty Ramsey:

Correct.

Frank Tehel:

And they would know the cost and insurance and everything, just like any other enrollee?

Patty Ramsey:

Correct. Let's say, during the year, because their birthday, let's just say maybe their birthday's in March.

Frank Tehel:

Right.

Patty Ramsey:

So they're going to be coming off the plan, they have 60 days only for a special enrollment period. And so-

Frank Tehel:

Ooh.

Patty Ramsey:

... they have to get that coverage in that 60 days, or they're not going to have coverage for the rest of the year. They would have to wait until the next open enrollment, so it's important to get that done.

Frank Tehel:

Which would be November 1 of that year.

Patty Ramsey:

The next enrollment period would be November, but it wouldn't be effective until January of the following year.

Frank Tehel:

Wow.

Patty Ramsey:

So they're without insurance for a long time.

Frank Tehel:

Yeah, so very important to know those special enrollment periods, 60 days. And that's even if you left your company because you're switching jobs and now you've lost that coverage, you also have 60 days. It's a special enrollment period that you can enroll into another plan.

Patty Ramsey:

Now, if somebody misses their 60-day window and they come uninsured, does that effect their enrollment the next time when they sit down in November to get into a plan?

Frank Tehel:

It does not affect the following year, but they will do without coverage for the rest of that current year.

Patty Ramsey:

Okay. Let's go back to the small business person. What's that underwriting process like? You bring them numbers, they look at different plans. How long does that cycle take?

Frank Tehel:

Yeah, so I would actually get some information, we would run some quotes of different companies with different plans, and then I actually will send that to the client and then we'll review that, let them pick the plan. Some of them can pick from... offered two different plans. That process is a little bit longer, because we're having to set up to... I would just say it could be one to three weeks, depending on how fast we get all the information.

Patty Ramsey:

Okay. Are there more vendors in that marketplace than the two that you have with Medicaid?

Frank Tehel:

Yes, there is.

Patty Ramsey:

Are they local? Are they national?

Frank Tehel:

Yeah. Anthem, Optima, United Healthcare. A couple of them.

Patty Ramsey:

All of the major insurers are available in that marketplace?

Frank Tehel:

Correct.

Patty Ramsey:

So Patty, we're now coming into the enrollment period. How busy is your life? What should somebody be looking for? I mean, I'm assuming they need to act immediately. How do they go about doing that?

Frank Tehel:

Yes, just give me a call. The best way to get ahold of me and get on the schedule is to call my cell phone. The number Frank's given out, the (757) 287-4638, that's my cell phone number. All of my clients have my phone number and all of my clients have my phone number in their phone because that's just how I operate. I do give customer service all year round, so they're not having to call 800 numbers. Something comes up, they can call me directly so I can help them through the problem.

Patty Ramsey:

What if there's a mix-up in the paperwork? How do you untangle it? Have you ever seen that happen? Have you seen glitches in the processing?

Frank Tehel:

Yes, there has been glitches. So, it just depends on which company that it's with and what the glitch is, but I escalate it to the top until we get it corrected. So I have had a couple clients that had some problems, but again, we have been able to get them all corrected.

Patty Ramsey:

So it's a matter... work of paper and simply finding the person who's missing a piece of information and filling in that piece of missing information?

Frank Tehel:

Yes, and again, that's why it's a good reason to use an agent because otherwise, you're just on your own doing it. And what a lot of people don't realize is it does not cost you anything extra because you're using that agent. You can do it all by yourself, the premium's going to be exactly what that premium's going to be if I help you. So why would you not want to use an agent that you have their cell phone number and you can call them anytime to help you through any of those processes?

Patty Ramsey:

John, is there anything that you're thinking about that we might need to address?

John:

Where Patty was going was getting me thinking that... Correct me if I'm wrong here, Patty, but you are compensated by the insurance companies, not by the individual person and client that you work with?

Patty Ramsey:

Correct.

John:

So it's not a matter of it being a cost to the person who's looking for insurance to come find you, right?

Patty Ramsey:

Correct.

John:

This is such incredibly important work that you're doing. I think about my folks. They are both on Medicare plans at this point. My mom will be 67, My dad will be 70 early next year, and they live out of state. So sometimes I get frustrated or feel a little bit helpless in speaking with them, because they're throwing all of these doctors and all of these medications and all these plans out at me over the phone. And it's really hard for me. So I'm so glad that I've set them up with somebody like you this year, to evaluate the plans based on the doctors they're seeing, the prescriptions that they have-

Patty Ramsey:

Correct.

John:

... and find what the best plan is for them. And hopefully, it will save them a lot of money in 2021, as opposed to what they paid in 2020.

Patty Ramsey:

Correct. The insurance carriers pay the agent, and it has nothing to do with the premium that any client pays for their insurance. If they use an agent or if they don't use an agent, they're going to pay the same exact premium. So I bring that up because I have had a lot of questions. "How much am I going to have to pay if I use you?" or they'll directly ask, "How do you get paid?" So it's important for people to know that because a lot of them did assume that "Okay, well, I'm going to have to pay extra. So, insurance premiums are high enough. I don't want to have to pay extra for that."

John:

And especially for some folks in their retirement, if for example, they haven't planned out their retirement with Frank, money might be a little bit tight, and they're worried about insurance and all these costs and all the day-to-day living. They're worried about having one more bill and it's again, worth repeating that you're not going to send them a bill, that you're compensated from the insurance companies, and it's not going to come out of the insuree's pocket.

Patty Ramsey:

Correct.

Frank Tehel:

That leads me onto one of the questions we were talking about earlier, and that is the comparison between the Advantage plans and the Medicare supplement plans. As Patty said, in a supplement plan, do you know how much you're going to pay out every month? And that's going to be your out-of-pocket costs. In the Advantage plans, you've got copays and I mean, hospital pays, and it's a more complicated formula. And you never really know where that number stops or do you, Patty? Do you-

Patty Ramsey:

Well, you do. All of those Medicare Advantage plans have a maximum out-of-pocket. And actually, that is set per year. So currently, I want to say the most any insurance company on a Medicare Advantage plan can charge is $6,700 currently. That amount is going to go up some for next year, but that does not mean that's what the insurance company is going to have as their maximum out-of-pocket. Those plans can vary.

Patty Ramsey:

That just means that is the cap that they could charge for a maximum out-of-pocket. If you didn't go to the hospital, you didn't have much care, MRIs, that type of thing, your cost is going to be very little, especially if you have that HMO plan that you don't have a premium.

Frank Tehel:

There, John, is the reason why people need to look to Patty or myself.

John:

And what are the best ways to reach the both of you, Frank?

Frank Tehel:

As we've talked in the past, I do a free 45-minute consultation. Patty's available on the phone. You can reach Patty at (757) 287-4638. You can reach me at our office, (757) 390-3339. You can go to my website, October Effect Limited, and contact us through there. Most importantly, take advantage of the material support that we can give you. These are important things that affect one, your health, and two, your pocketbook. And those are two critical parts of anybody's life, whether you're retired or not.

John:

We'll have both of your contact information in the show notes. If you're driving or listening somewhere where you can't write that down, then both of your contact information will be right there. All matters discussed during this show are for informational purposes only. Opinions expressed are those solely of October Effect Limited and staff. All topics covered are believed to be from reliable sources. However, October Effect makes no representations as to its accuracy or completeness.