7 Medicare Mistakes to Avoid

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Well, hello, everyone. Welcome. Thank you so much for joining us for today’s webinar, seven Medicare misconceptions.

If you’ve tried to read the Medicare handbook and are still fuse, you are not alone. There are a plethora of options which can lead to confusion and even analysis paralysis.

And what’s even more is that your health, and wellness, and wallet might be at stake. So with these concerns in mind, we are cohost today at Mercer Advisors, the webinar, seven Medicare misconceptions, or seven mistakes to avoid with chapter a free concierge service for Mercer Advisors client. My name is Laura Holmes. I am a managing director at Mercer Advisors, and I am joined by Josh De Forest, Managing Director and Ari Parker, who is the cofounder in our Medicare partner chapter.

Today, we are going to be talking all things Medicare.

And as many of you know, Medicare can be incredibly confusing.

And it is our hope today that we can walk through and really highlight these misconceptions, walk these walk you through these, and really that you would walk away today with a new sense of clarity.

Mercer Advisors, our goal is for every client to achieve economic freedom, so they don’t have to worry about money.

And for every one of our clients, you might define that differently. There’s a few common areas in your financial plan that are most important for everyone, And we found that over the years of working with clients, one of the largest sources of anxiety in retirement is healthcare.

And so today in an effort to turn that potential risk into an opportunity, we have partnered with Chapter.

And chapters joining us today. They are independent Medicare advisor who provide unbiased, holistic healthcare guidance to our clients.

And joining me today is our subject matter Spert Arie Parker. Arie is one of the country’s leading Medicare experts.

And he has helped thousands of Americans sign up for Medicare by breaking it really into small bite sized pieces.

RA’s work has been featured in the New York Times, in for CNBC and a number of other publications.

And as a graduate of Stanford Law School, Ari trains and leads Chapters team of over thirty licensed Medicare advisors, and it is my pleasure to introduce you today to Arie Parker. Welcome, Arie.

Thank you, Laura. Thank you so much for having me back. I’m beyond excited to present on Medicare. It’s my favorite subject, my wife.

She can’t She can’t she’s trying to get me to stop talking about it, but thank you for having me on. It’s a pleasure to be back with you. Absolutely. And for our listeners, they’re glad it’s your favorite subject, because there are a lot of questions.

And so to kick us off, we’re going to talk through these seven Medicare misconceptions, Arie, but before we jump into the misconceptions, to kick us off, can you let we’re gonna lay a foundation, and can you help us understand a little bit more about the three key components of Medicare and what each of them are for.

Absolutely.

You can picture Medicare as a three legged stool. The three parts are hospital, outpatient, which is everything outside the hospital, and then drug coverage. Now each leg of the stool corresponds with a letter, so hospital is part a, outpatient is Part B. Don’t worry about Part C right now, and then drug coverage is Part D, d as in drugs. Digging into the key components a little further on the next slide.

Part a is hospital insurance. This covers you when you’re inpatient at the hospital. It means you have a wristband. It also covers inpatient mental health care, skilled nursing facility care, Home Healthcare even Hospice is covered under Part a.

Typically, your premiums for Part a are fully prepaid. If you or your spouse has paid federal payroll tax for ten years plus, then part a is premium free to you. Then there’s part b. Part B is medical insurance.

This is what we think of as visits the doctor, visits the specialist, lab work, x rays, the list goes on, even ambulance services is covered under Part b and preventative services. Now there’s a charge for Part b. For most Americans, it’s a hundred and sixty four dollars and ninety cents per month. Part a in part b is what is referred to as original Medicare.

This is what was established in the mid nineteen sixties.

Now on the next slide, you’ll see a picture of your red, white, and blue card. This is what we will help you get at Traktor. You’ll notice that now there’s a unique Medicare identifier no longer your Social Security number, it’s now a unique number.

And if you take Medicare by way of turning sixty five, then your Part A and your Part B dates will match. But if you delay starting Medicare, that is if you’re still working for a large employer, let’s say, and don’t worry, we’ll cover that in a moment, then your part b date might be different than your part a date. That’s totally natural.

Mhmm. Absolutely. That’s helpful just kinda get the, what it does cover. Okay? We’ve set the groundwork there. Ari, share with us a little bit about what is not included in Medicare, because a lot of clients might be confused about what is covered, what isn’t covered, like you just mentioned, maybe especially those coming from traditional employer coverage, can you talk through what Medicare doesn’t cover in this next section?

Absolutely. So there’s two big ticket items that Medicare doesn’t cover. The first is there’s no maximum out of pocket. On original Medicare.

Sky is the limit. I’ll cover that in a moment. The second big item that Medicare doesn’t cover is long term care. Long term care is defined by the activities of daily living.

It’s also called nursing care or custodial care. This covers things like bathing, toileting, dressing oneself, even cognitive decline. Unfortunately, there’s no coverage for long term care under original Medicare.

Digging into the financial exposure under original Medicare.

On the next slide, you’ll see that Original Medicare leaves you covering twenty percent of your medical expenses, at least twenty percent. So for example, My mom lives in the Chicago Land area and just needed a knee replacement. It’s a forty thousand dollar procedure. She owed would have owed eight thousand dollars under original Medicare for her knee replacement, plus all the pre post op visits as well. She then broke her elbow, unfortunately, two months later, she would have owed twenty percent for that as well. So the point is that original Medicare leaves you covering at least twenty percent of your medical expenses And it also doesn’t cover things like prescriptions, dental, vision, and hearing. So when people realize that there’s these gaps under original Medicare, that kick starts the conversation about how to get comprehensive coverage.

Great. Thanks, Ari, for setting the stage for just the basic foundation. What does Medicare cover, what does it not cover? We’re going to move now into talking through the top seven Medicare misconceptions and walking through and hopefully debunking some of these misconceptions or myths. And I want to remind listeners today we would love to answer questions, feel free to put any questions that you have in the Q and A. We’re gonna be answering these during the time at the end, and then also following up directly with you if you do have specific questions. But, Josh, I’ll turn things over to you to jump into the top Medicare misconceptions.

Excellent. Thank you, Laura.

Yeah. So when Laura Ari and I did this presentation about eight months ago or we realized that there were a lot of very common questions. Laura mentioned, you know, please put them in the chat. But what we got from literally getting hundreds of questions was that there are some misconceptions that are out there and some things that we wanted to come back to you all and say, hey, you know, here are some of the things that we learned. Here’s some of the things that we realized that was confusing for people.

And so as we get into this, there’s seven key ones. The first one that we’re gonna think about is when you sign up for Medicare. There were a lot of people who thought, you know, I can just automatically get signed up for Medicare. It’s confusing because we people think it’s tied to Social Security, and maybe they’re delaying when they receive their Social Security payments, and so they should delay getting Medicare as well. There’s other instances where it gets more confusing as well. But Ari, can you talk a little bit about this misconception about it automatically starting when you turn sixty five?

Yeah. Josh, this is such an important point. Now the application to apply to enroll in Medicare, it actually contains a question about whether someone wants to begin taking Social Security. So there’s a lot of confusion about whether the two are tied together.

They’re not. It is Medicare enrollment is automatic if you’re taking Social Security at age sixty five, but you don’t have to be taking Social Security in order to get Medicare. It’s your right by way of turning sixty five to apply to enroll in Medicare. So if you go to the next slide, This is called your initial enrollment period.

It applies to someone who’s turning sixty five and it starts three months before the month in which you turn sixty five and it extends three months after the month in which you turn sixty five. So for example, Josh, if your birthday were December twenty third, Your initial enrollment period would begin September first. Your Part A and your Part B will be dated to December first. It will go to the first of the month.

In the month in which you turn sixty five. It always starts the first of the month.

So that’s that’s a good primer for people. There are some people though who may still be working and this also creates some confusion for people. Talk about how that’s different from the initial enrollment period, which you just discussed, and the special enrollment period, which might apply to some other people.

Yeah. So a special enrollment period is for someone who delays starting Medicare because they’re working for a large employer.

A large employer is defined as twenty employees or more. So if you work for a small employer that is nineteen employees or fewer, you need to start Medicare by way of initial enrollment period. A special enrollment period is only for someone who works for an employer or their spouse’s employer that has twenty or more employees.

If you want to delay starting Medicare and wait until you come off yours or your spouse’s coverage, then you’ll receive an eight month period in which to sign up for Medicare. Starting and this period it’s eight months from when you lose your work coverage, but it actually opens three months before the month in which you choose to sign off. And it’s really important to apply to enroll in Medicare Part b before you sign off from yours or your spouse’s work coverage, otherwise you’ll have a gap in coverage. You won’t have healthcare, which is a big deal. And something that we definitely want to get in front of. So that’s one of the first things that you’ll cover with a chapter advisor in your one on one appointment.

There is an exception here. So while we even if you plan to remain on your yours or your spouse’s work provided coverage, It’s oftentimes your benefit to just take Medicare part a, hospital coverage. And I can explain why I’m sure we’ll get some questions on it. But there’s one exception here. Which is if you’re contributing to a health savings account, that is if you’re on a high deductible plan and you’re making contributions to an HSA, then you can’t take any part of Medicare. It’s a very technical rule and something that we walk clients through all the time so that they don’t face a federal excise penalty.

Yeah. I think that’s that’s really important. You talked about that gap in coverage being one reason why it’s important to know, make sure you get signed up on time. As we move to misconception number two, there’s another reason too why you have to make sure that you get signed up on time.

I was actually speaking with one of my clients who said, you know, I’m in good health. I feel like I’m doing pretty good. I don’t really want to pay for this coverage, so I’m just gonna wait. I’m gonna sign up in a few years when I feel like it.

I’ll save the money in the meantime. Can you tell us why that’s not necessarily the best strategy?

Yeah. So taking a step back from the penalties, if you don’t start Medicare on time, you won’t have access to affordable healthcare. You’ll either pay too much for poor coverage, or worse yet you’ll experience a gap in coverage. And I know this firsthand, Josh, because I watched my dad delay his Medicare and he wasn’t able to get treatment for his hernia as a result. So in addition to having a gap in coverage, you’re going to owe penalties. So if we go to the next slide, These penalties for delaying enrollment in Medicare are cumulative and lifetime penalties, so this is for someone who missed their initial enrollment period or their special enrollment period, which is something that won’t happen to you if you work with Mercer and Chapter.

So There’s two separate penalties here. There’s one for Medicare Part B, and there’s one for Medicare Part D drugs.

Now the penalties get technical, And of course, we want to give you as much heads up so you avoid these penalties, but you notice someone who waits four years too long, if you look at the bottom row, They’re going to owe forty percent additional for Medicare Part B, and fifty three percent additional for Medicare Part D for the rest of their lives. So it’s something we definitely want to get in front of and avoid, and the best way to do that is by scheduling a one on one consultation with the chapter team.

So what I’m hearing you say is that by saving on some money for a few years while, you know, not having to pay the Medicare premium, we’re gonna get to that here in a second.

It’s not worth the the penalty that you have to pay for the entire rest of your life. Ex exactly. It’s definitely not worth it.

Which get this to our next question. I I’ve even seen one or two questions on the topic come into the chat, which is our misconception number three. And candidly, this is actually probably one of the areas where we have some of the most overlap with Captor, and the work we do as comprehensive wealth advisors is in thinking about all of the moving pieces in someone’s financial life, whether that’s, you know, how to sign up for Medicare, what they’re going to pay for it, but a lot of the work that we do on acts loss harvesting or Roth conversions. And it really matters if you’re gonna sign up for age sixty five, if you’re gonna sign up for Medicare when you turn sixty five, you have to start some of this planning actually in advance of that. Can you talk about how it works with income how much you’re gonna end up paying for Medicare?

Yes. Yes. And there’s definitely a lot of overlap here with the work that the Mercer team does. Remember when I said most people pay roughly a hundred and sixty five dollars per month for Medicare Part B?

Well, if you earn more than most people, then you’re going to pay more for Medicare Part B and for Medicare Part D. So if we go to the next slide, These are called the high earner tax. Social Security officially calls it an income related monthly adjustment amount. Or you may know it by its acronym Irma, the government loves the government loves acronyms.

Don’t get me don’t get me started on why they named it Irma. Now Irma applies to anyone who earns more than ninety seven thousand dollars in file solo or someone who earns more than a hundred and ninety four thousand dollars and files jointly.

What is this based on? It’s based on a two year look back. So this year’s assessment for twenty twenty three is based on your twenty twenty one tax return. And to determine your Irma, the government uses your modified adjusted gross income, which includes cap gains.

Now, what if your income has changed substantially? Josh hinted at this, then you can appeal your Irma determination. It’s something our chapter team is highly familiar with. We work in partnership with Mercer all the time on this. And in fact not a day goes by without a question on Irma. So essentially, there’s eight life changing events that allow you to appeal your Irma determination.

Two of the most common are work stoppage or work reduction.

And a successful appeal can save Mercer clients four thousand dollars to five thousand dollars per year in their Medicare Part B and Medicare Part D. Expenses. So it’s really worth it and something I write about more in my short book on Medicare.

Yeah. And we’re gonna get more into how you all can get a copy of this book actually at the very end of our conversation today. It’s something we’re gonna give away to everybody here on the call.

So you’ve already gotten into sort of our inception number four, which is this alphabet dupe. You’ve talked about a, you’ve talked about B, there’s C, there’s G, there’s just all of these letters. And I think sometimes that’s even partly what makes this so confusing for people. It’s it’s just not as you mentioned earlier written in, like, plain English. So can you help us think through the alphabet soup? What does that mean? What is a, b, what and even two, how do we think about those supplemental coverages in plan g?

Yeah. Absa absolutely. And as you mentioned, it it indeed is an alphabet soup. So you already know that original Medicare refers to part a and part b.

And it only covers eighty percent of your medical expenses. So if you go to the next slide, you’re probably curious, how do I get comprehensive coverage then, Ari? What do I do about the other twenty percent? What do I do about drugs, dental, vision hearing?

And that’s something that we walk through. We walk That’s something that your advisor will walk you through. There are only two ways to achieve comprehensive coverage, though. These are plans.

So Medicare the alphabet soup that Josh was referring to is parts, part a hospital, part b, medical, part d, drugs, when we talk about achieving comprehensive coverage, we’re talking about plan types, and there are only two plan types to get comprehensive coverage.

The first is to choose a Medicare supplement, which is also known as a Medigap plan.

This covers almost all of the costs that you would have under original Medicare. It covers the gap. That’s why people call it Medigap. It covers the gap under original Medicare, And as you’ll see, it’s the most comprehensive option if you can afford it. All you would need in addition if you go the Medigap route is a standalone prescription drug plan, which only costs about two to three cups of coffee per month depending on your prescriptions.

The second option is what’s advertised on television. You see Joe Namath, William Shatner, Jimmy Walker, pitching these Medicare advantage plans. This is Part C. So Part C is known as Medicare Advantage. It’s also sometimes referred to as an all in one plan. What this does is it replaces your original Medicare with a private insurance company’s offering, so it’s a replacement for original Medicare, It comes with network limitations on the doctors that you can see unlike original Medicare.

It It combines the benefits of Part A and Part B. It has to be at least as good as what you would have gotten from uncle Sam, and some of these plans come with additional benefits like dental, vision, and hearing, along with prescription coverage bundled in. Many of the plans have a premium as low as zero dollars, but keep in mind you’ll still owe your premium for Medicare Part b. Now you probably are wondering, but both of these sound great. Can I have both? You can’t have both. You can only go one or the other, so it’s either Medigap plus a standalone prescription drug plan or Medicare advantage.

I I think that’s actually really helpful because it’s it’s nice to kinda see what the different options are. And without, like, giving specific advice, you know, I do find a lot of my client end up preferring option number one just because it allows a lot more flexibility. Obviously, every single person is a little bit different. And so, you wanna this is where a chapter can really come in and help big figure out what makes sense for any individual.

We get into those those medigap coverages that you mentioned, and there’s a whole alphabet soup there too.

To simplify it, there’s a lot of options, but we do find that Plan g is oftentimes one of the plans that people find the most appealing for various reasons. Can you talk a little bit about that?

Absolutely. So plan g is a type of medigap plan. These Medigap plans are standardized under federal law. Any plan g works the same way as any other plan g. It must cover the same hospital and medical expenses. So one carrier’s plan g is no different on the hospital and medical benefits it must cover than any other plan g. That’s federal law.

So Josh is Josh mentioned a lot of his clients choose Plan g. Why is that? Well, most Mercer clients choose Medigap plan g because it’s Cadillac coverage. It’s the most comprehensive plan for someone who wants choice of doctor, flexibility, maybe they love to travel.

So here’s what a plan g does. First, plan g doesn’t have network restrictions. Your network is the same as original Medicare, and almost every doctor accepts original Medicare with the exception of concierge doctors.

There’s no rec referral required for specialist visits. You can go to a specialist, let’s say, MD Anderson in Houston, the Cleveland Clinic, or even the Mayo Clinic here in Scottsdale, or in Florida, and you won’t have any issues seeing specialists.

There’s no additional bills or co pays. It covers the gap that you would have otherwise had under original Medicare, that is the twenty percent.

It works nationwide, so you can go see doctors in Texas even if you live in Arizona. If you live in New York and you spend substantial time in Florida, no problem. You can go and see specialist in Florida because it works nationwide.

And finally, it even has eighty percent coverage abroad when you travel internationally. For the first sixty days you’re outside the US.

I was helping a client over the summer. The story got picked up by the New York Times, They were hospitalized outside Paris, Paris, and racked up almost thirty thousand dollars in hospital costs. Their plan g picked up twenty four thousand dollars, of their hospitalization. So it’s a big deal.

Excellent. And I’m gonna hand it off here in a second to Laura to go through the the next couple of misconception, but just wanna also make a note to everybody. We are answering a lot of these questions live. I can see them coming in, and there’s a whole team of people behind the scenes that are typing in answers.

It’s not Laura. And I So please continue to ask your questions. We’d love to continue to answer them, and we have people here who can do that. So Laura, I’ll turn it over to you to take a support.

Thanks, thanks, Josh. And like Josh said, there are chapter advisors on the line, so they are answering your questions. Some of them are being answered live, and I even see a few that we’re going to be answering in the next couple of myths or misconceptions.

So, moving to our fifth, miss conception. I was recently talking with some clients and they’re incredibly healthy. They don’t take a lot of prescriptions.

And so Ari, you know, what should somebody like that be thinking about? You know, we see here, choosing drug coverage isn’t important if you don’t take expensive prescription. So, what what would you say to my client who says, I’m healthy, I don’t need this, you know, how would you talk to them?

Laura, we’re still going to recommend that your clients sign up for prescription drug coverage because this ties into the penalties point. If your client doesn’t sign up for a prescription drug plan, which costs about two to three cups of coffee per month, then they’re going to be subject to late enrollment lifetime penalties. On Medicare Part d. So it’s still worth it to get it. Just get the cheapest part d plan even if you don’t take any prescriptions.

Now Of course, even if they don’t have prescriptions tout, they might have prescriptions added later. Right? They might have prescriptions added mid year. So that’s why it’s important to have insurance. And if you go to the next slide, the reason to get it is This is Part d, d as in drugs.

You want to avoid the lifetime penalties, and you also want the insurance in case you have prescriptions that are added. And there are two ways to get Part d coverage. The first is through a standalone Part d plan which is what most Mercer clients will choose if they select a Medigap plan g, a Medigap a Medicare supplement, And the second way to get it would be as part of a Medicare advantage prescription drug plan. There’s one more thing I’ll add here. Some clients on this webinar are taking expensive brand name prescriptions like Eliquis, Ozempic, or Trulicity, Part D coverage is especially important for you because there are ways to minimize your out of pocket costs if you choose the right Part D plan. And that’s something that our team will help walk you through.

Thanks, Ari. I think it’s a good reminder that even though we might be healthy today, things can change and just having that coverage is really important.

Thinking about this next misconception.

I’m sometimes guilty of this. If we look at number six, my neighbor’s plan is a good choice.

You know, we’re coming into summer, barbecue season. You might be sitting out on the patio with your friends, your neighbor. You know, we often get some of our advice. Well, my neighbor is doing this, So I’m just gonna do the same thing too. Ari, what is wrong with this thinking?

Oh, we get this one a lot.

Often, the people we’re speaking to aren’t seeing the same doctors as their neighbors. They have different medical preferences than their neighbors. They might like to travel while their neighbor might be more of a homebody. And finally, you probably don’t take the same prescriptions as your neighbor.

So if we go to the same slide that are part in the next slide, what we will talk to you about in our one on one consult and and many of the people I recognize Chat have already spoken with our team one on one, we will go through your three ps. We call them the three ps here, and I write about this in the book as well. We’ll go through your providers. Who are your doctors?

What are the networks and hospitals that are important to you? We’ll go through your prescriptions. What medications do you take? How does this factor in?

And then finally, your priorities. What’s important to you? Do you love to travel? Do your grandchildren live in a different state? For example, or do you just have one doctor that you go to once a year? It’s really important to narrow down your priorities in order to make the best fitting recommendation for you, and it is very likely that your three ps will be different than your neighbors.

I think that’s a good reminder that each person’s got their own situation, their providers, their prescriptions, I’m even seeing in some of the questions a lot of comments around travel. So, again, speaking to that lifestyle component, different priorities require different coverage and making sure that it fits exactly for your needs. So, again, I love that the process, Ari, is working, for most of our clients is working directly with chapter to really find what the best strategy is and make sure that it’s completely personalized for everyone’s situation.

Great. So, rounding out our misconceptions here. Let’s — if we shift to our seventh, our final misconception, you only need to choose your coverage once. Is this a set it in forget it, Arie? Do we need to be looking at this every year? I’m thinking, we might need to make some changes instead of just having coverage for one specific time. So talk to us about how often or if we should be looking at coverage.

I I love this because it really sets up the Medicare open enrollment period in the fall. So if we go to the next slide, You should adjust or reconfirm coverage every year. Now, if you choose a Medigap plan when you first start Medicare, Then the saying is, marry your Medigap and date your drug plan. Every year, we want to review your standalone Part d plan in order to make sure you’re getting the most savings possible.

And we typically save our members about eleven hundred dollars just by taking fifteen minutes to review their drug coverage each fall. What if you choose the other plan type Medicare advantage? Then it’s really important to review this every year because the network of doctors changes as part of your advantage plan. The prescriptions change, your prescriptions change, and the way your plan covers descriptions might change.

And then finally, the plans themselves are changing, so we want to make sure that you’re aware of what changes are in the pipeline for your plan. This is something we do every fall. The fall is the Medicare open enrollment period, and it’s part of our ongoing service and partnership with the Mercer team. We’re going to review your coverage as the fall rolls around.

So even if you’ve already had an initial consult with us and selected a Plan G with a standalone drug plan, we’re going to review your coverage in the fall just to make sure it’s optimal for you for twenty twenty four. And there’s a nuance here as to Medigap and how it’s really important to choose the Medigap plan you want when you first start Medicare, but we’ll get into that in the q and a.

I think that’s a good reminder is to always review that every fall. It’s very similar to the work Ari that Mercer is doing with all of our clients who are on the line today, having those regular check ins, having that annual review to see if anything’s changed, not only in, you know, from a healthcare standpoint, but also just from a life circumstance. Do we need to adjust your financial plan very similarly, clients need to be thinking about how to adjust their coverage plan from a Medicare standpoint as well. But thanks for walking through that. So We’ve gone through all of our misconceptions, and we are answering questions. Our questions still coming in, which I absolutely love seeing all of the engagement. So, continue putting in your different questions.

One that we get pretty regularly and Josh, I’ll invite you to come back on as well. We’ll answer some questions live here. You know, just to kick us off on our frequently asked questions. We often get a question that I’m past age sixty five. I even saw this in the chat a little bit as well, and I’m going to keep working for another two to three years, do I need to enroll in Medicare or Part B? Ari, can you address that for listeners?

Yes. So it depends on whether you or your spouse work for an employer with twenty or more employees. If the answer is yes, then you have the option of staying on yours or your spouse’s work coverage or starting Medicare.

Here we’ll want to do an Apple to Apple comparison to make sure you’re getting the most value for your money. We’ll look at your premiums, your deductibles on your work coverage, and the quality of your coverage, how much you like it, to see what’s best for you.

If you or your spouse work for a small employer, so that means nineteen or fewer, then you need to start Medicare a and b when you turn sixty five. Otherwise, you’re going to end up with potentially enormous medical and hospital expenses because your small group employer’s insurance will claim that they’re not responsible for the eighty percent of coverage that original Medicare should have been responsible for.

Awesome. Thanks, Ari. Let’s let’s go to this next frequently asked question that we have here, which says, You know, if if someone has a preexisting condition, I think this is really important, especially as we think about sort of traditional just health insurance, you know, preexisting conditions are so important.

Can you be denied for Medigap or supplemental plan? What do talk talk to me about preexisting conditions.

I’m I’m so glad you brought this up. So it’s a really consequential decision, which plan type you choose. If you know you want the most comprehensive coverage, which is Medigap, then it’s important in forty six states to sign up for your supplement when you first start Medicare Part B. Because in those forty six states, if you miss your open enrollment period for Part B, which is separate than the period in the fall. Then you will have to answer about your health history unless a special circumstance applies. So in forty six states, it’s really important to choose whether you want to go the supplement route or the Medicare Advantage route, because in those forty six states, in Colorado, Arizona, even California are amongst them, then you will be subject to health history questions after that period ends, and it’s typically a six month period.

The four states that are exceptions are all along the eastern seaboard. Those are New York, Maine, Massachusetts, and Connecticut. Those are the four states that have year round open enrollment for Medicare supplement. If you don’t live in one of those four states, then you really need to be thoughtful about which plan type you choose when you first start Medicare, and that’s something our team helps clients with every day.

Great. So another question that’s been a common theme that we’ll highlight here is I’ve been hearing a lot about changes to Medicare Part D. What going on with that, Ari?

Yeah. So Congress passed significant changes to Medicare Part d last summer. The changes are staggered and there’s several of them. But the biggest change that you might have heard of is that there will be a maximum out of pocket on your drug costs for the first time ever.

So beginning in twenty twenty five, the maximum out of pocket cap will be two thousand dollars, which is a huge savings for someone who takes Ozempic. Trulicity, aliquis for high blood pressure. The list keeps going on, but it’s a big deal that there’s finally a maximum out of pocket on Medicare Part d. There are actually some changes that went into effect this year.

For example, the shingles vaccine is now a zero dollar copay.

Alrighty. That’s awesome. And if we go to the next Laura and I are going to spend some time going through a lot of the questions that we’ve seen in the chat. And we’ll ask Ari some additional questions that we’ve seen from all of you guys.

We’ll leave any, obviously, personal information out of it. But before we do this, I wanna leave this up on the screen for a little bit so that if you want to get a copy of Ari’s book. If you’ve heard some things that you want to learn more about, you wanna dive in a little bit deeper. There’s a link here that I’d recommend that you copy down.

There’s even an email address where you can ask more questions, especially if you want to meet with someone from chapter. But if you see that little QR code on the bottom left, If you scan that with your photo app on your phone, it’ll take you to a website, and you will be able to get a free copy of Ari’s book here. So I’ll leave this up so that we have some time for people to to check that out. But as we continue with the q and a section, Ari, One of the questions I always love when people ask, and I think it’s super important is how does chapter get paid?

So chapter earns revenue from insurance companies, and it doesn’t affect which plan you choose, our platform surfaces every single plan available. There are over twenty four thousand plans nationwide hundreds of health insurance companies offering thousands of plans, and it doesn’t matter which one a Mercer client chooses. We will make the best fitting recommendation.

And I think in addition to that question, Josh, something that I’m seeing in the in the chat is really, you know, how does someone get connected with chapter. And is there a cost to this consultation?

There’s, you know, this is part of Mercer Advisors’ services, our comprehensive services for our clients. We partnered with Chapter and have this as an option for people who are interested in in meeting and talking with a Medicare advisor. So the process is really connecting with your wealth adviser, who you meet with on a regular basis, connecting with your wealth adviser, If you’re not sure who that might be, feel free to email mercer medicare at asschapter dot com. We’ll get connected with you. And be able to schedule a complimentary consultation. Again, there’s no cost to work with. Chapter, this is part an extension of our services because we’re so feel so strongly that Medicare is an important piece that we want to make sure we have as part of your overall financial picture.

Yeah. I think that that’s really awesome. The the next question that I have here that I pulled out of the chat and maybe Laura’ll let you do one after this is This question around, you know, someone may have signed up for Medicare. They may have, you know, received insurance already for several years, but they got it from a different Medicare advisor, is chapter able to review that coverage and make recommendations, especially during open enrollment?

Absolutely.

Yes. We’d be more than happy to give you a second opinion on your coverage and make sure that it’s optimal for you. What we’ll go over are the three ps. That is your doctors, your drugs, and then your priorities.

What’s important to you, and we’ll have a value space discussion in order to figure out what’s most comprehensive for twenty twenty four. It’s also important to note here that there are some people who don’t even need to wait for the fall. If you’re on a Medicare supplement, let’s say you’re on a Plan F and you’re curious about Plan G, There’s only one difference between Plan g and Plan f, and that is that PlanG doesn’t cover the two hundred and twenty six dollar Part b annual deductible. So if your savings are going to be more than that on a PlanG, then it might be worth it to consider switching to Plan G, especially because the risk pool for PlanG is younger and healthier than the risk pool for Plan f.

Arie, I think that one of the things that I’m seeing in the chat, and maybe you could just highlight this again are a lot of questions around Irma. And for people that maybe joined a little bit later, can you just quickly highlight again just what people need to be focused on from an income standpoint?

If and if they maybe need to appeal what that process looks like?

Absolutely.

Irma is income related monthly adjustment amount. This applies to you if you file your taxes solo, and you showed more than ninety seven thousand dollars income in twenty twenty one, or if you filed jointly and you showed more than a hundred and ninety four thousand dollar income in twenty twenty one. So it’s a two year look back. For this year, to determine your twenty twenty three Medicare Part B and Part D Irma, the government is looking at your twenty twenty one tax return.

So what if your income changed substantially last year? Well, then you can file an appeal if you have one of the eight life changing circumstances Some of those would be work reduction, work stoppage, a divorce. Those are all life changing circumstances that would allow you to appeal your Irma. There’s a three page form that we walk clients through how and while we’re not tax professionals, we can’t give tax guidance.

We can certainly work in partnership with Mercer, to figure out what your modified adjusted gross income was for twenty twenty two or even your anticipated modified adjusted gross income for twenty twenty three, in order to help you get savings on your Irma and to get a redetermination.

Excellent.

We’re getting a lot of questions about switching. So maybe someone who is on original Medicare and wants to switch to Medicare Advantage or vice versa help people think through, you know, the pros and cons and what that might mean if if you need or want to make a change from one to the other.

The time to change a Medicare Advantage Plan so if you’re on a Medicare Advantage Plan and you’re thinking, wow, a supplement sounds really good. I could use that because I’m planning to do more travel now that the pandemic’s over.

Then the time to switch your Medicare advantage plan would be the fall. The fall is the time for people to review their Medicare advantage coverage.

Unless a special circumstance applies. A special circumstance would be something like moving. If you’re moving, then you can actually change your Medicare advantage plan around the time of move.

There’s no underwriting. There’s no health history questions for Medicare Advantage.

Now, for Medicare Supplement, If you’re on a Medicare supplement plan and you’re curious about a Medicare advantage plan, then I would encourage you to get more education about pros and cons of switching from supplement to advantage. Because if you live in one of the forty six states in which there’s only a one time opportunity to get a Medicare supplement without answering questions about your health history, then it’s really going to come down to how healthy you are and what the trade offs would be. Because it will be challenging to get your supplement back unless you’re outside your one year trial period. So definitely something to walk through in a one on one consult with the chapter team, and we’ll provide that context so that you are empowered with the information to make the decision that’s best for you.

Thanks. Sorry. One thing that I’ve seen is just a question around cost, you know, are there, what should listeners be thinking about? Maybe just kind of an average idea of a premium or another question similar to what you about moving? Is there, you know, do different states vary by different costs, anything around costs that would be helpful for today’s listeners?

Yeah. So costs vary. So it depends which plan type you’re interested in.

Medicare supplement plans are standardized under federal law, And in many, many states, you’d be surprised at how affordable a Plan g is. Now, of course, this is something that varies carrier by carrier, and we track these differences closely in our platform, so that we can give you guidance on what you would expect to pay as a sixty five, a seventy, a seventy five year old, and so on. And we also look at the carrier’s creditworthiness because we want the carrier that will be around just like you.

Now on the Medicare Advantage side, most premiums are zero dollars, but you still owe the part b premium of The standard Part B premium is a hundred and sixty four dollars and ninety cents per month, but if you’re a high earner, then you’ll pay more for Medicare Part B and Part B. But pros and cons here because there are limitations on advantage plans. It’s first network restrictions, second prior authorization. So it’s more restrictive.

Than the flexibility of original Medicare plus a Medigap plan.

We are getting so many questions in the chat that every time that I look at question to get pushed further and further down the list. We’ve answered lots and lots of them live via the chat and then through this forum too. So this is awesome. Keep them coming. We’ll be on for, you know, probably another five or ten minutes so we can still answer those questions.

I do get this question a lot, because it is a little confusing because the words themselves are somewhat similar. Can you just simply describe the difference between Medicare, which is what we’re talking about today, and Medicaid, which is something different?

Yeah. So Medicaid is for low income.

It’s typically someone who if you’re past age sixty five, it would typically be for someone who’s making even less than the average Social Security recipient receives.

Now you can have Medicaid and Medicare, but what Medicare refers to is insurance for someone who’s commonly turning sixty five or past the age of sixty five. So big differences between them.

Yeah. Thank you. I think that’s a common common question that we get that it’s not always understood that they’re that they are different because they sound the same.

Alright. This one might be more specialized or specific, but one thing that sometimes when I’m working with clients who are turning sixty five, they and they’re thinking about going on Medicare, but they might have dependent children that are still on maybe a health insurance plan, how do those kids, or how does that impact coverage? Or who’s now providing insurance kind of for that family? Any insight on that scenario?

This is this this is where having a one on one consult is really valuable because when we have dependence involved, either a spouse who depends on the employee’s insurance or children, that is someone under the age of twenty six commonly, then it’s where it gets dicey as whether it’s a good decision to start Medicare or to keep your employer coverage, and it’s going to be a very fact specific determination.

When someone is looking to start Medicare and come off their work provided coverage, then there’s a few options. The first is if their spouse has coverage, then the dependent can join the spouse’s coverage.

The second is if the dependent is in school, then typically they can get very affordable coverage. Through their educational institution.

And then finally, the dependent will have the option of covering if their employed is starting med care. So if the employee is starting Medicare, then the dependent will have up to thirty six months to COBRA.

Mhmm. And I I did see a lot of questions that were answered by the chapter advisors for listeners around COBRA and around that coverage. Any expansion on, you know, what what listeners need to do from COVID COBRA coverage?

Yeah. So COBRA’s your right under federal law. And people who are starting Medicare and have an affected spouse, your spouse can COBRA for thirty six months.

Perfect.

We’ve had, actually, several people who have asked about Tricare. So for those of you who have asked, thank you for your service, can you tell us a little bit about what someone who has Tricare may need to think about or not as it relates to Medicare?

Oh, I love this question. Okay. Tricare for life. Tricare for life is for retired service members who served our country for twenty years or more.

So if you are a retired service member, then you get a free Medicare supplement from the government. We don’t want you to lose that, so we want you to keep your Tricare for life. The only thing is Uncle Sam is going to charge you for Medicare part b. So sign up for Medicare part b. You owe that amount and then the government gives you a Medicare supplement, known as Tricare for Life, to cover your remaining twenty percent of medical expenses.

So if I if I understand you correctly, instead of signing up for something like Plan g or one of the other supplemental plans, the TRICAREpolite has you covered in that in that arena. Tricare for life has you covered. You don’t you you just need to start Medicare Part B, and then the government will take care of your twenty percent through TRICARE For Life.

Excellent.

Ari, I we didn’t cover this explicitly today, but I know you and I have had this conversation when working with one of my clients, and it’s around the HSA health savings account. What do listeners need to be aware of? When signing up for Medicare and also maybe contributing to a health savings account if they’re still employed.

I’m so glad. This is my favorite subject, HSA. So HSA’s are great. They’re a triple tax advantage. I know the Mercer team recommends them all the time. To make sure your clients are getting maximum value.

However, health savings accounts, you cannot make new contributions to a savings account and start any part of Medicare. You can still use whatever you’ve contributed to your HSA, but you can’t make fresh contributions.

And so where this can get technical is if what if you have a family HSA?

And one of you is starting Medicare. Well then the person who’s not starting Medicare is still allowed to make up to the individual contribution, but you can’t make the family contribution if you’re starting Medicare.

Now, what are the deadlines that apply to someone who’s starting an HSA?

Well, if you’re starting Medicare by way of initial enrollment period, that is by way of turning sixty five, then the last contribution you can make to your HSA is the month before you turn sixty five. So for example, If I were starting Medicare next month in July, then I would be allowed to make half a year’s worth of contribution to my HSA.

I would also be allowed to make the one thousand dollars ketchup contribution if I’m past h fifty five. I’m still entitled to that one thousand dollars ketchup contribution. But I can only make half a year’s contribution. And I think the limit this year, Josh and Laura, check me if I’m wrong, it’s like thirty eight fifty for an individual.

Think that sounds great. I’d have to I’d have to check my book. They change every mail. I have to check it out.

I’d be allowed to make half that amount plus the thousand dollar catch contribution, I would not be able to make the full amount. Now, what if I’m starting Medicare past age sixty five? Let’s say by way of special enrollment period. Then social security is actually going to backdate my Part A six months before the month in which I applied for Medicare.

So now you need to think about timing when your last HSA contribution will be. And this is something our dedicated team will walk you through. Our dedicate our team dedicated to Mercer, so that we make sure that you stop your HSA contributions on time so you don’t face a penalty related to excess HSA contributions, and then it just becomes a mess because you have to unwind your HSA you might have to count it as taxes, which defeats the the savings from using it initially. It’s just something to get in front of.

So if you have an HSA, it’s really important to plan here. As to when you’ll start Medicare, and it’s something we’ll discuss in a one on one consultation.

And just for some additional housekeeping, because I am seeing a couple of questions about this. This is gonna be recorded. We are gonna post it on the Mercer Advisors’ insights tab. Typically takes us a few days to get it put up there. So this will be available if you wanna go back and review it.

If you have questions about that, always reach out to your Mercer advisor’s adviser.

For several things. One, if you want them to send you the link, we can always do that.

Few, if you wanna understand that we’re getting so many questions about taxes, especially as it relates to Irma and that’s, you know, like, what am I gonna pay kind of a question? And that’s a really great question to discuss with your advisor because they can start to help you think through how these various things are going to impact you.

They can also put you in touch with Chapter. There’s a really simple way that we can do that, and make sure that you get on their calendar. The last time that I did did this, I literally spoke with a client in the morning, and we were able to get them in an appointment later that afternoon. So there’s not, like, months and months that you have to wait to talk to somebody.

I’m imagining that we’re gonna get lots of interest after this call, so it might take a day or two, but we’re not talking about weeks and weeks to be able to to get some help. Lastly, you know, make sure that you get your copy of the book. Again, this will be posted. You’ll be able to get it later, but, you know, use that QR code or use that link if you wanna get a copy of Arie’s book here, and then you can also figure out a good way to get in touch with chapter by simply using the email address that you see here on your screen too.

Laura, I think we have time probably for one more question. Do you have one more that you wanna ask before we start to wrap things up?

I think, again, the the biggest thing that I’m seeing is just around the timing. So, Ari, can you just highlight again? We had a couple of people join late. When do people need to really be thinking about this? If they’re not sixty five yet, like, when do we need to be signing up, having those conversations?

Yeah. So just by virtue of attending this presentation, you’re already in good shape.

Now if you’re turning sixty five and you know that your plan is probably to start Medicare, then let’s have a conversation six months before when you’re sixty four and a half just to set expectations as to what things will look like three months before the month in which you turn sixty five. Same thing goes if you’re coming off employer provided insurance. Let’s get the ball rolling six months before, even though we won’t do anything probably until two or three months before you’re ready to come off work provided coverage. If you’re already on Medicare and you’re just wondering whether you’re getting the best deal, then we can have those conversations now, but keep in mind that the plans for twenty twenty four aren’t available yet, those won’t be out until the fall during the Medicare open enrollment period, which begins October fifteenth.

Excellent. I think there’s a couple of commonalities that really come to my mind, which is is in terms of how Medicare works, with how working with Chapterworks, then also just what we do here at Mercer Advisors, it’s, you know, planning proactively is one of the things that helps solve a lot of headaches. If you can create a plan in advance, start to work on that plan in advance, then that can really help. So, you know, again, reach out to your Mercer advisor’s advisor.

The other thing is that life changes. Right? Things come up in your personal life. They come up with in your financial life.

They certainly come up in your health concerns as well. And we wanna make sure that we are able to those things in real time as they come up, and this is really where, you know, we like to partner with Chapter because we can do a lot of that proactive and also reactive planning both in your financial plan and also with chapter.

There’s a lot of moving pieces here. So reach out early. We should have those conversations early in in your kind of Medicare journey, and we are happy to to work on that. Arie, thank you so much for your time, Laura.

Thank you for the great questions. This is such a great topic, such a great opportunity for our clients to learn more about this you know, I think, pretty timely and very interesting conversation for sure. Again, reach out to your advisor if you have more questions. But on behalf of Mercer Advisors, on behalf of Chapter.

We thank you guys for all of your your awesome questions. We received well over a hundred in the chat today. So thank you guys for that.

And we look forward to discussing this more with you guys in the future. So thank you everyone.