Today John, Ben, and special guest Bryan Gay from Boomer Insurance discuss Medicare and Medicare Advantage, shedding light on a topic often overshadowed by federal employee health benefits. They start by breaking down Medicare, comparing it to just another insurance company, and exploring the distinctions between Medicare Part A and Part B. You'll gain valuable insights into the affordability and comprehensive coverage provided by Medicare, as well as discover the out-of-pocket limits associated with this healthcare option.
Listen in to hear about the freedom that Medicare offers, making it a compelling choice for those who value options and the ability to choose the best healthcare solutions. If you have federal employee health benefits, understanding the nuances of Medicare becomes even more crucial, as it can open doors to additional advantages and opportunities for comprehensive healthcare coverage.
Listen to the full episode here:
What you will learn:
- Who Bryan is and what his company does. (5:00)
- How to think about Medicare in terms of your insurance. (6:30)
- The difference between part A and part B of Medicare. (7:20)
- Why we believe Medicare is great insurance. (11:00)
- The out-of-pocket limit on Medicare. (14:50)
- The car and the bus analogy. (18:00)
- The freedom Medicare allows you. (22:20)
- What to know about Medicare Advantage. (26:00)
- The importance of understanding your options. (32:00)
Ideas worth sharing:
“Think of Medicare as just another medical insurance company.” - Bryan Gay
“Medicare is very affordable and also wonderful health insurance once you get on it and start using it.” - Bryan Gay
“Medicare Advantage is a wonderful plan for what it is designed to do, and it is designed to save people money.” - Bryan Gay
Resources from this episode:
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Read the Transcript Below:
Congratulations for taking ownership of your financial plan by tuning into the Federal Employee Financial Planning Podcast, hosted by Mason & Associates, financial advisors with over three decades of experience serving you.
John Mason: Welcome to the Federal Employee Financial Planning Podcast. I'm John Mason, president of Mason & Associates, and I'm a certified financial planner.
Today's episode is going to be really fun. We're talking Medicare and Medicare Advantage. And I know, just bear with me when you hear Medicare and Medicare Advantage, you don't think fun, but I promise you this will be an entertaining episode for you today.
So, Medicare and Medicare Advantage, and the analogy, the car and the bus with me, a usual co-host, Ben Raikes, certified financial planner, IRS enrolled agent, and a special guest with us as well, Bryan Gay from Boomer Insurance out of Richmond, Virginia.
So, folks, stay with us. This is going to be a fun episode talking about Medicare and Medicare Advantage. And I want to preface this. Federal employees have wonderful, wonderful health benefits, so sometimes this Medicare conversation, we want to tune it out.
We would encourage you to get out of your comfort zone a little bit today. Stick with us as we talk about the car and the bus. So, to my two hosts and co-hosts for today. Thanks for joining us, Ben. How you doing?
Ben Raikes: I'm doing great John, recent update for me as I recently got married, I guess it's not too recent now, it's a total of two weeks ago. So, we had a big family reunion and I got to tell everyone, all 115 people at the family reunion after the wedding that we are now going two weeks strong.
And my mind when I got married goes to, I need to get joint bank accounts, I need to update all my beneficiaries, I need to get estate documents. And I think that flows really nicely along with we need to think about healthcare decisions as well.
And so, I'm glad we got someone like Bryan here. We're pretty far away from making Medicare decisions, but Bryan, talk to us a little bit about kind of what you do and helping us plan for those healthcare decisions, and particularly your field Medicare and Medicare Advantage plans.
Bryan Gay: That is perfect. Yeah. So, my name's Bryan Gay. I'm out in Richmond, Virginia area. That's where my company is headquartered. And this question comes up quite a bit with the federal employees and how that intertwines with Medicare.
There's quite a lot of complications that kind of go along with that from what people hear, what people are told, what their friends did. So, it's nice to be able to kind of shed some light on everything and help your client base and your listener base understand some of those things. It'll be easy.
John Mason: Well, Bryan, we're excited to have you and Boomer Insurance has been a resource to us and our clients for a long time, and I know Tommy and Ben have a long history with you as well.
So, we're excited for you to be here. We're excited that you're joining us on this podcast. And as we get rolling, I want to say a couple things. One, Ben, I didn't realize you were such a hopeless romantic, married two weeks and already talking about your estate plan and getting a trust and appropriate life insurance. I'm sure, your spouse is really digging that.
Ben Raikes: No, there is nothing that really gets a marriage kicked off by, “Hey babe, we got married, we had our honeymoon. Let's talk about estate planning.”
John Mason: Let's talk about estate planning. Well, Bryan, I guess quick question for you as well, I have two of them. One is have you ever done a podcast before? And then number two, what'd you think of that opening song?
Bryan Gay: Well, let's start with the opening song first because that's pretty fantastic. I don't know how you got that to do that, but that is amazing. So, congratulations on that. That's a pretty catchy tune.
Podcast, I have done a couple in the past, but nothing as elaborate as what you guys have set up here. So, this is pretty amazing.
John Mason: Awesome, thank you. Well, again, for our audience today, today's topic is Medicare, Medicare Advantage, and we're specifically talking the difference between these two.
I often think of Medicare as alphabet soup. There are so many Parts, it's very confusing. And again, luckily our federal employees, they don't really have to pay attention as much because they have those federal employee health benefits.
But like we do on our YouTube channel, our goal of this podcast is to educate, motivate, and empower. So, we hope you as our listeners, although you're federal and maybe retired military as well, we hope that you appreciate this education. We hope that it motivates you in some other aspect of your financial plan.
So, even though some of it's not necessarily directly applicable to you as a federal employee, we think you're going to like the content.
So Bryan, if you could just share with the audience really quickly, how long have you been practicing with Boomer Insurance? How long have you been in the Medicare arena?
And then maybe you could tell our audience the differences, what is Medicare A and what is Medicare B?
Bryan Gay: That's all easy. Okay, so I'll tackle the first one is my company is called Boomer Insurance Group, and this year is my 22nd year helping people with Medicare insurance.
So, there's always no questions too tough. They're all easy at this point, so be happy to explain any questions. There's a little bit of an overlap with some of the federal employees and the military benefits with the Tricare for Life, which we'd be happy to kind of go over and answer some of those questions.
But there's quite a few people who retire from the military and then still retire from the federal employee’s health benefit programs too. And they have a lot of decisions to make.
But when it comes to Medicare, people kind of get confused with it. But if they think of Medicare as just another health insurance company, like a big Blue Cross Blue Shield or United Healthcare, or Cigna or Aetna, it's just health insurance.
And Medicare is one provider of health insurance. Now, when people are working, they've been prepaying for Part A of Medicare. So, Medicare Part A, like alpha, that is health insurance, but it's only for hospitalization or really inpatient medical claims.
So, if you only have Part A, it's going to help cover some of the costs if somebody is hospitalized or have to go to hospice or even in an inpatient rehab, things like that.
Now again, I said just insurance. So, you've had to prepay for Part A your entire working life. So, if anybody's still actively working, who's listening to this podcast, if you ever look at your paystub, it'll say federal, it'll say state withholdings. And then it says Medicare. That Medicare tax, the Medicare withholding out of your paychecks is going to prepay for Part A.
Now, once you've got 40 quarters, which is technically 10 years, you don't have to pay anything for Part A when you no longer receive a paycheck.
A lot of people will say Part A is free, it's not free, it's absolutely not free. You've paid for it over many, many years of working. But that's what Part A is, hospital insurance, that's how you paid for it moving forward.
And then there's Part B of Medicare, like bravo, you have not prepaid for Part B, so you would have to start paying for Part B when it's the time to start paying for Part B.
Now, right now it's the year 2023, which you guys will hear me say probably quite a bit just because as the years go on, if somebody's listening to this in 2029, they should know that … the 2023 rates, but the current Medicare Part B monthly payment is $164 and 90 cents. That's every month.
Now that pays for Part B, well, Part B is just insurance again, and that is for outpatient medical claims. So, things like the doctor's offices or lab work going to a specialist, going to physical therapy, even the emergency room is technically outpatient. An ambulance ride is outpatient. Outpatient surgery, like cataract surgeries and all that kind of thing. All those claims, all those bills will be filed under Part B of Medicare.
And really Part A and Part B are the only two parts that are given and delivered directly from the government, from the federal government. Anything else is private insurances, like we're going to talk about Part D for drug coverage, we're going to talk about Part C. And Part C is Medicare Advantage. Drug coverage and Medicare Advantage are done through private insurance companies.
But the main thing, the first thing that people need to get when it's time for them to get it is Medicare Part A and then also Part B.
John Mason: Well, Bryan, I really like the way that you kind of mentioned that. It's like, yeah, it's just health insurance. It's just health insurance and it's administered by the federal government. A you paid for while you were working. B, you pay for at 65 or later when you start receiving those benefits.
So, I really like how you broke that down, that it's just health insurance. I think that's good for our audience to hear that. So, Part A is the hospital. Part B is that outpatient and 164.90 is the standard rate.
Many of our folks have probably already listened to it, but I'm not sure if you're aware, we did an episode that we released probably a few weeks ago or months ago now, and it's titled Aunt IRMAA who may be the most disliked woman in the United States, that income related monthly adjustment amount, the additional penalty that one has to pay if they make too much money in retirement.
So, we've covered a little bit of that in previous podcast, but A and B only cover what they cover, and most people need additional coverage in addition to that. So, this is where I think it gets really confusing because there are so many letters, and the letters overlap.
Bryan Gay: They do, and then there are different plans for different letters. And these different insurance companies offer those different lettered plans. So, that's when it can get very confusing very quickly.
John Mason: So, I guess one question I have for you, because I think Ben, you feel the same way, is I've joked around with clients for a long time. It's like, I cannot wait until I'm 65 because I want to go on Medicare. So, I've said that statement many times and it's like, yeah, I think this is going to be a good day for me. Am I right or am I wrong, Bryan?
Bryan Gay: Well, you could be both. But at the end of the day, I also say that probably 20 times a day, I cannot wait to go into Medicare. I think it's great insurance. I mean, for people who are still working or self-employed, some of these insurance plans have high deductibles now or they're really high premiums, they cost a lot of money every month.
So, I feel like Medicare is very affordable and also wonderful health insurance once you get on it and actually start using it and understand how it works.
Ben Raikes: So Bryan, I think I'm probably jumping the gun a little bit to where you're getting to. It's great insurance. We all in this room jokingly say we can't wait to get on it. You're in that boat too, but A and B is not going to cover everything.
So, aside from a Medicare advantage plan and a drug plan, what options do people have for when they are looking at covering whatever A and B doesn't, that extra 20%.
Bryan Gay: So, that is the main decision that people have to come to figure out. And even outside of the federal employees benefit programs where you log into your Office of Personnel Management portal and get to choose plans and things like that for the federal people, the federal people have those choices, but they also have the same choices that anybody else has in America to get some kind of coverage for this leftover 20%.
So, whether they're federal employees or just regular employees, retirees, when they're coming into Medicare, usually around the age of 65, but there's quite a few people who are retiring after the age of 65 these days, of course.
But whether they're coming into 65 or later, they have these two decisions that they have to make. And one of those is what we call option number one, which we at our company refer to as the “car” in quotation marks for those that are listening because it's like a car.
Option number one is a way to get Medicare insurances where you can just go to any doctor, any hospital, anywhere in America and they just have to bill Medicare, which most medical facilities, most doctors’ offices will bill Medicare.
Well, this option, the reason why you say it's like a car and it's usually a little more expensive to go this way. So, it's really nice because you can go where you want, when you want, for whatever reason you want to go there. It's like having your own card, but it's just more expensive.
And when you go down this option, you wind up with three separate ID cards. So, you have Medicare Part A and Part B, which we talked about very briefly, but when you have Medicare Part A and Part B as your primary, that's important. So, when Medicare Part A and Part B is primary, then Medicare will pay 80% of your medical bills. But only after you meet the Medicare deductible.
Now John and Ben for us, we're used to these 3 and 4 and $5,000 deductible, which are brutal, but Medicare's deductible this year for, again, 2023 is only $226. Well, that's a much better deductible.
So, what ends up happening is you go to whatever doc you want to go to, whatever hospital, you got to cover the first $226 of your medical expenses. After that Medicare is going to pay 80% of your medical bills. But that leaves us with this leftover 20%.
Which 20% of a doctor bill isn't bad. 20% of an ambulance ride isn't that bad. But 20% of a knee replacement or 20% of cancer treatment can get pretty bad pretty quickly financially.
John Mason: Bryan, real quick, is there a out-of-pocket max on Medicare A and B?
Bryan Gay: No, that's the main reason, I guess that's probably the reason why I have a job is because Medicare, there is no limit. Like I mentioned earlier, a lot of people have these deductibles, we keep paying all that money towards the deductible, but you still have an out-of-pocket maximum.
Like for instance, for me and my wife, my out-of-pocket maximum on our plan is $5,000 per person. So, I know if something really bad happened, I'm out 5 grand and my insurance company will pay the rest of my medical bills the rest of the year.
Medicare doesn't have that out-of-pocket maximum. And Medicare would pay 80%, you are responsible for the leftover 20%, whatever that 20% may be.
John Mason: To an unlimited amount for the rest of time. So, it's not really an option for folks to be on Medicare A and B only. Maybe there's people out there that have done it, but that is a very scary place to live in.
Bryan Gay: Yes, there are lots of people who have done that, and we get that phone call probably three or four times a year. It's not as common as it used to be because more and more people are figuring out quicker that it's a financial train wreck not to have some kind of cover for that 20% that's left over.
John Mason: Okay, so we've covered Medicare A and B, we've covered this gigantic Ben, really big 20% of a million dollars, 20% of $10 million. If we have open heart surgery or we have cancer, or we're getting these sorts of medical treatments all the time, 20% could add up to a big number and we can't plan for that in a financial plan. That's impossible.
Ben Raikes: There is absolutely no way to plan for that unknown of what, 20% of, again, I think Bryan said it perfect, a doctor visit, you can handle that. An ambulance ride, okay, that's going to cost a little bit.
But you said open heart surgery, a knee replacement, a hip replacement, long-term cancer treatments, paying that 20% over your life, an undefined amount, to us as financial planners is untenable. So, we would look to someone like Bryan who would be able to recommend some kind of Medicare supplemental policy.
John Mason: And I guess for our audience, what's good to know right now is that most of you who are listening, if not all of you either have TRICARE or federal employee health benefits.
So, when we talk about the Advantage plan or like a Medicare supplement or Medigap policy, I think a lot of these terms are used interchangeably. You already have that, you've already won the game because you have FEHB or Tricare that's going to satisfy that other unknown 20%.
So, that's a really good thing to know is we've already got that in the bag as a federal employee or retired military.
So, I really want you to hit this hard, Bryan, the difference between the car and the bus and I'll lead you in on how you've educated us on this in the past, the car and the bus. So, it's private transportation versus public transportation.
And I do want to just throw out here that we rode the bus at Virginia Tech for four years and it was great, and it did exactly what we wanted it to do. So, this is not a knock on anybody who's riding a bus. It's not a knock on anybody who takes a tram or other public transportation into work every day.
But I think if you fall into that category, you're going to like how Bryan explains advantage versus Medicare supplement the car and the bus.
Bryan Gay: Right. And John, on that same note, when I went on my honeymoon years and years ago, we took public transportation everywhere. We rode only buses and only trains and it was still one of the greatest experience of our lives.
So, like you said, it's not a knock on anything. It's just a good analogy for people to wrap their brain around because people see these terminologies, they hear these words, and they get them confused all the time.
But when you're looking at these analogies, everybody knows the difference between a car and a bus. That's pretty elementary. Well, when you go on the car, option number one, you wind up with these three separate ID cards.
So, you have Medicare Part A and B, that's one ID card, that would be your primary Medicare as primary would pay 80% of your bills after you met that little $226 deductible for this year.
It leaves us with a 20%. So, we need that 20% taken care of by something called a Medicare supplement. Now that's the proper terminology is Medicare supplement. But the nickname for supplement is called Medigap, well, tomato-tomato. Same thing just named differently.
Now these Medicare supplement plans take care of the leftover 20%. The supplement plans are initiated by a lettered plan. So, you might hear somebody say, well I have a Medicare supplement plan F like Frank, or I have a Medicare supplement plan G like Gary, or I have a Medicare supplement plan N like Nancy. They're done by lettered plans.
But in essence, to keep us at a high level, you're going to be buying supplement plan from some insurance company, whether it's Blue Cross Blue Shield, whether it's United Healthcare, Aetna, Cigna, you're going to be buying it.
And a typical across America average price for a supplement plan right now for a 65-year-old person is about a 125, 130 bucks a month per person, per month.
Alright, well then you buy this supplement plan, they give you a little plastic ID card. So, now we got two cards, you have a Medicare card, their supplement card, we go anywhere we want to go, any doctor or any hospital. They just have to bill Medicare. We met our deductible, the 226. Medicare pays 80%, the supplement's paying the 20% and we've got no more percentages left to pay, which is wonderful.
But friends, coworkers, retiree buddy, they're going to tell us things like, I go to any doctor I want to go to, and I don't have to pay anything. I just got out of the hospital and didn't pay a dime. Oh, my God. Yes they did. They paid $164 for Medicare. They already met their deductible.
Now they're paying about 130 bucks a month for a supplement plan. They are paying money. It's just now that they've met their deductible, they have those two ID cards, they can kind of go wherever whenever with no red tape. So, I say it's kind of like a car. They're going where you want to go.
But now the issue with this is it does not cover drugs. So, we would need some kind of Part D drug plan. Now Part D or letter D for Delta or D for drugs, that's again, that's a government program, but it's administered by insurance company.
So, you don't just get a Medicare drug plan, you get a Humana Part D drug plan or a Blue Cross and Blue Shield, Part D drug plan or UnitedHealthcare Part D, that kind of thing. You still got to pay a little bit per month. So, maybe they're 30 bucks a month for the plan.
Well, that gives you another plastic ID card. Well, now that you have a drug plan ID card, you take that drug plan ID card down at the pharmacy, whether you get your medications locally or you get them through the mail, you're going to be usually paying some type of small copayment associated with the prescriptions that you pick up.
If they're low-cost generic prescriptions, you might pay nothing. You might pay five, six months. But when you start getting into the more expensive prescriptions, you start taking insulin or inhalers or Xarelto or Eliquis or Restasis. Well, these higher cost drugs, you might have a higher copayment, like 30, $45 but there's copaying for prescriptions.
Well, that's how option number one kind of completes itself together. You have these three ID cards, you have your Medicare card, a supplement card, and a drug ID card. And that is what we tell people is kind of like the car, it costs more money to do it this way, but it's for freedom and flexibility, for choices, for ease of use, just like a car.
John Mason: I think what you're saying there that really hits home and resonates with me, Bryan, is if I'm sick and I want to go to Duke, or if I'm sick and I need to go to Johns Hopkins, or if I just need to go right down the street to a Riverside or Sentara provider, I can do that with my Medicare supplement and Medicare policies, I can go anywhere. I have the freedom of choice.
I'm probably enrolling in Plan G, which I believe is the most comprehensive that's available right now. I think a lot of folks used to do Plan F and if you have Plan F, you're grandfathered into that Plan Frank, but that's no longer available anymore, correct?
Bryan Gay: That's correct. So, the government stopped any more new enrollments for people who are born after 1955. They're born in ‘56, ’57, ’58 or if their Medicare Part A started prior to January 1st, 2020.
So, most people nowadays aren't doing Plan G because again, that's the most comprehensive lettered supplement plan that you can get.
John Mason: Perfect.
Ben Raikes: So Bryan, I think we've covered the car very well, you've got your Medicare a and B card. You've got your supplement card, you've got your drug card. I'm doing the math as we're talking about all this, and it looks like it's going to be about a minimum of $300 a month.
Maybe let's talk about the bus because I would think in some instances the bus should be cheaper than the car, right?
Bryan Gay: Yeah, sure is. And I'll just throw it out there for the TRICARE people, because we'll talk about that later on too, maybe on a different podcast. But the Tricare for Life people, that's basically like having option number one. That's basically like having a car, having Tricare for Life is like having a supplement and a drug plan. That's pretty cool to be able to have that.
But you don't have to pay all those extra fees if you have Tricare for Life, because you pay for it with time instead of money.
Now, when you flip over to the other option that is available, like you're mentioning the bus, well that's the Medicare Advantage program. Now, Medicare Advantage is a wonderful program for what it's designed to do, and it is designed to save people money and it usually does save most people money. There's some exceptions to every rule, but Medicare Advantage saves people money typically.
So, Medicare Advantage is also known as Part C like Charlie. Now we tell people what our C stands for combines, doesn't really stand for that, but it does technically combine everything underneath one ID card.
So, when you have Medicare Advantage, you do not show your red wine blue Medicare card. You only show your Advantage plan ID card like a Humana Advantage plan or a UnitedHealthcare Advantage plan or Aetna Advantage plan.
And if you're in different parts of the United States, you've got a lot of different options. There's called Kaiser, there’s Devoted, there's all kinds of insurance. There's no shortage of insurance companies for sure.
But at the end of the day, Medicare Advantage is less expensive per month. So, let's talk about that. You still have to pay for Medicare to get a Medicare Advantage plan. So, you still have to pay for Medicare Part A through your payroll deduction. You also have to pay for Part B of Medicare, which was $164 and 90 cents for this year.
But earlier, when we talk about a supplement plan being 130 bucks and a drug plan being another 20, 30 bucks, not on Advantage plans. Most counties in America have an opportunity to have an Advantage plan and pay nothing for an advantage plan.
So, the large majority of our clients are in Virginia. I mean, we're licensed in about 11 states, but majority of our clients are in Virginia. Well, in every county in Virginia, there is a $0 advantage plan available to Humana, UnitedHealthcare, Blue Cross Blue Shield, that kind of thing.
Which should sound kind of weird to both people because it's like how can you buy insurance and not pay the insurance company anything? How can you buy UnitedHealthcare Insurance, and not pay UnitedHealthcare or Humana or Blue Cross?
Well, these plans aren't really free, but they're heavily subsidized by the federal government. So, on average, the federal government gives the Advantage plan you've chosen out of a thousand dollars a month every month if you're on that company's Advantage plan.
So again, if you’ve got a Humana Advantage Plan, Humana's going to get about a thousand dollars a month from Medicare. You have UnitedHealthcare Plan, UnitedHealthcare is going to get about a thousand dollars a month every month from Medicare.
So, now we go into this Medicare Advantage program, we don't show a Medicare card, but we have to start going to certain doctors. It's kind of why it's like the bus. These things are called a network of doctors.
So, if you had a Cigna Advantage plan, you'd have to go to the Cigna network of doctors. If you had an Aetna Advantage plan, you got to go to the Aetna network of doctors. It's not a bad thing, it's just how it works. It's just like the bus, with a bus you got to go where the bus goes.
Now, there's some advantage plans that are known as EPO Advantage plans that say you can go out of network. You just got to be pretty careful because if you go out of network, out of the typical doctor choices of your insurance company, you could pay a lot of money or you could pay all of it like the entire bill. You just have to be careful of which Advantage claim that you choose.
Most of the time it's got to go to the right doctors who are covered by your Advantage plan. Every time you use the bus, it's just like paying bus fare, like if you use the bus a little bit, you just have a little bit of fees, a little bit of these bus fares, they're called copayments in the insurance world.
So, if you have a payment plan, you're typically paying around $30 copayment to see a specialist. You're usually paying about a hundred dollars copayment to go to the emergency room. You're usually paying around $300 to have a surgery. You're usually paying about 200 bucks to have a CT scan or an MRI.
So, there's different co-pays for different purposes, and you get a big, big book that shows you exactly what copayment you would be paying for which service you'd be receiving.
But again, just like the bus, you pay a little bit every time you use it. Pay a little bit of copays every time you use your Advantage plan.
Well, the other reason why I say it's like the bus is usually you're not paying anything for your Advantage plan for a month. So, just kind of like the bus, if you didn't use the bus all month long, you didn't have to pay for the bus.
Now if you start using the bus a little bit, you pay a little bit and you always need to make sure that you're going to the right doctors, the network of doctors, just like you need to go where the bus goes. So, that's kind of the Reader's Digest version of Medicare Advantage plans.
John Mason: Well, I love the concept of the car on the bus and as we get close to wrapping up this podcast, what I love about it is if you value choice, if you value being able to see the best specialist, if you value unlimited options, then clearly you're going that Medicare supplement route, you're going to pay a premium for it. We know that.
We're going to deal with Part D, we're going to deal with donut holes, et cetera. But then if we don't want all the associated costs of maintaining a vehicle, getting oil changes, getting inspections, having the tires rotated, all of these are expenses that you have to do just to keep the car up and running before you even go to get some of these other services like surgery and whatnot, then maybe that Advantage plan could be right for you.
And we don't have a ton of time to talk about it, but Bryan, I think you can agree with me, what's dangerous here is once you go Advantage, it's very hard to go back to traditional Medicare because don't you have to go through underwriting to do that.
So, it's not a … and just quickly answer, not something that you should take lightly. Because typically the reason you'd want to be switching back to traditional Medicare would likely be that you want to go to Johns Hopkins and something bad's happened.
Bryan Gay: Right, yeah. The switching between plans gets really dicey. I would say out of all the client base that you guys have, the Tricare for Life, the retired military people have the best options available. It's unbelievable the way that they can do things if they really understand their options and how they all work.
But when you're just looking at supplement plans versus Advantage plans, the car versus the bus, in most states, so again, this is state specific, but you can always go with the car first, you can always go with the supplements plan in the beginning, and they cannot ask you the medical underwriting questions. The insurance companies telling the supplement plans have to take you in the beginning.
Now you can always move from a supplement and jump onto Medicare Advantage later. That's no problem. You can go from the car to the bus. But the general rule across America is when you get onto Medicare Advantage, you're not going to be coming off of Medicare Advantage. There's some exceptions to the rule, but most of the time when you go on the bus, you're not coming off the bus.
But like that analogy, you can change seats on the bus, that's no problem. So, if you are on a Humana Advantage plan and you want to move seats and go to the UnitedHealthcare Advantage plan, no problem. You just move right over UnitedHealthcare, but then you just go to United Healthcare Doctors and pay the United Healthcare copay.
So, it's very difficult to get off the bus. It's not, like you were mentioning, most of the time in most of the states, you have to magically qualify to get a supplement plan later in life.
So, for people who've gone on Advantage plan, all of a sudden, they want to go to that Duke University, they want to go to MD Anderson in Houston or Sloan Kettering, well now they have to medically qualify to purchase a supplement plan. And most of the time it's too late to get a Medicare supplement plan if you have some medical. So, that's why it's very difficult to get off the bus.
John Mason: Okay, well I think it's really good for our audience to know too, guys, that as you have federal employee health benefits, whether that's Blue Cross Blue Shield, standard basic or Blue Focus or any of the other plans that are out there, what you have is you have a car.
And under Blue Cross Blue Shield basic, I think the premiums are like four 50 to 500 a month. And that's for self plus one that includes your Medicare supplement and your Part D.
And if I'm not mistaken, we don't have time to talk a ton about it, but there are significant advantages over your prescription drugs and there are Part D and now that might be changing going into 2024. And we have other episodes with Bryan that are coming.
So, our military, if you have TRICARE and you're trying to figure out how this works with Medicare, we have an episode on that.
And we're also going to record an episode that talks about federal employee health benefits, Medicare, Medicare Part D, and some of the changes that's happened this year because there's big changes coming to Medicare Part D going into 2024.
So guys, we like to end this on action items. I think for me, as I think about what our audience can do with this information, I've said for a long time, Bryan, if you're a federal employee and you have federal employee health benefits, when you turn 65 and the six months before that, you're going to get a lot of mail.
You're going to see TV commercials; you're going to get mail. The standard recommendation here is you're going on FEHB and Medicare Part B, throw it all away, baby. So, toss that.
We do not need to bore ourselves. We do not need to do additional research. If you're federal employees, you're probably just staying on the FEHB health plan. So, throw all that other stuff away.
Ben Raikes: And I would say for our non-federal employee clients you've probably heard from this podcast that it can be a mess learning about Part A, Part B, Part C, Part D, plus the Medigap policies. Really, we know enough to be dangerous about these types of Medigap policies.
We need to talk to an expert, someone like Bryan, you need to give him a call and figure out, okay, what's the best drug plan for me? What's the best Medigap plan for me?
And we're happy to be on that call with you and Bryan to make sure that we are picking out the best plan for you, so that you don't make some kind of nearly irrevocable mistake and go on an Advantage plan and then find out later in life that you can't go back.
These are really important decisions, so make sure we're looped into the decision. Make sure you talk to an expert like Bryan and just make sure we're making the best decisions for ourselves.
John Mason: Well, remember you get what you pay for. So, sometimes although Advantage sounds sexy, you may be getting what you pay for. So Bryan, what action items do you have for our audience?
Bryan Gay: Well, I would say pretty much anybody who's on FEHB, a federal employee retiree should really give you guys a call just to talk it out a little bit. Obviously, you can loop me in and — as well to see if it would be right for them to look at outside plans, but if it's not right, then we can help them show exactly that value of FEHB program to the Office of Personnel Management and really which plans would be best for them over there too.
So, it's really a per person, per case by case. It's prescriptions people use, the doctors they go to. It's really a personal decision and I think that's a good thing to get knowledge base around and contact guys. You can always loop me here.
John Mason: Awesome, thanks Bryan. And you were breaking up a little bit there, but I think we'll be able to capture some of that in the transcript that we post on our blog at masonllc.net . We should be able to get that.
So, if you miss or didn't hear all of that audio, you'll be able to get the full transcript when we post this in the show notes.
Couple other things, if you don't enroll in Medicare Part B on time, there's a gigantic penalty. So, you need to be aware. If you're enrolled in social security, your enrollment in Medicare A and B is automatic, but if you're not, it's mandatory that you have to physically go in and apply yourself.
So, make sure you have usernames and passwords reset. Make sure that you get in during your initial enrollment period, which is the seven months surrounding your birthday.
And federal employees, your health benefits is one of your greatest benefits that you get to carry into retirement. Just like Bryan said, the government's paying a thousand dollars a month if you're on an Advantage plan. That’s what the government's paying these insurance companies.
Well, guess what? If you're enrolled in Blue Cross Blue Shield, the government share of that plan is like a thousand dollars a month there too. So, as you think about FEHB and retirement, it's like having another $12,000 pension above and beyond your FERS or your CSRS.
Thanks for joining us. This has been another episode of the Federal Employee Financial Planning Podcast, Medicare with Bryan Gay of Boomer Insurance. He didn't say it, but folks, Bryan gets paid to help you acquire a Medicare supplement or a Medicare Advantage plan, and he gets paid more under Advantage than he does supplement.
But what we love about Bryan is he's not scared to recommend Plan G or a Plan D or a supplement plan rather than Advantage, even though he would get paid more under Advantage, we can count on Bryan to help you make the recommendation that's best for you, not what's best for him.
This is Mason & Associates, we’re the Federal Employee Financial Planning Podcast. Thank you to our audience. Thank you for tuning in every two weeks to hear more information.
If you like what you hear, please leave us a five-star rating. Shoot us any emails or comments to masonfp@masonllc.net .
Quick shout out to our clients who are listening, thank you, one, for being a client. Thank you for your support and we'll see you next time on the Federal Employee Financial Planning Podcast.
The topics discussed on this podcast represent our best understanding of federal benefits and are for informational and educational purposes only, and should not be construed as investment, financial planning, or other professional advice.
We encourage you to consult with the office of personnel management and one or more professional advisors before taking any action based on the information presented.