Today Mike and John are once again joined by Bryan Gay, Owner of Boomer Insurance, to explore the intricacies of TRICARE For Life Medicare Advantage. For many retirees, especially those with a military background, navigating the complexities of Medicare options can be daunting. Bryan sheds light on the two primary choices available to those with TRICARE for Life, and breaks down what to know about each.
In this eye-opening episode, we dive deep into the ever-evolving landscape of healthcare options, with a particular focus on TRICARE for Life (TFL) and the intriguing possibilities presented by Medicare Advantage.
Listen in as we delve into the nuances of TRICARE and the Medicare Advantage experience. You will learn about potential drawbacks and how to avoid them, the transition from traditional Medicare, and the importance of understanding international coverage when making informed healthcare decisions.
Traditionally, TFL beneficiaries were advised against enrolling in Medicare Advantage plans, but recent regulatory changes have transformed this conventional wisdom. Now, those with TRICARE for Life have a unique opportunity to rethink their healthcare choices, and the advantages are compelling. Unlike others, TRICARE for Life Medicare Advantage enrollees can swiftly switch back to traditional Medicare and TRICARE for Life, offering adaptability.
We'll help you evaluate the benefits and considerations, providing practical advice to assist you in making informed decisions. Whether you're a TRICARE for Life beneficiary or interested in understanding these changes, this episode is a must-listen.
It's time to reimagine your healthcare options and make choices that align with your unique needs and preferences. Tune in to explore the TRICARE for Life Medicare Advantage, and discover a world of possibilities in healthcare planning.
Listen to the full episode here:
What you will learn:
- The two options in the public sector when it comes to how you receive your Medicare benefits. (4:05)
- What TRICARE and TRICARE For Life are. (10:45)
- What the Advantage experience is like for most of America. (12:35)
- The downside of being on Advantage. (18:30)
- What happens when you go on an Advantage plan. (23:00)
- What happens if you’re in the middle of switching between Advantage and traditional Medicare. (32:30)
- What you need to know about TRICARE and international coverage. (40:30)
Ideas worth sharing:
- “At 65, TRICARE becomes the payer of last resort, and our clients are forced to enroll in Medicare part A and B.” - Mason & Associates, LLC
- “There are only two options in the public sector when it comes to choosing how you receive your Medicare benefits. You’re either going to go with Option 1—which has been around a little longer, is more expensive, but is a luxury—or you are going with option 2, which is best for people looking to save as much money as possible.” - Bryan Gay
- “When people go on Advantage plans, the Advantage plan company that you choose takes over for Medicare, so now Medicare A and B are not primary. Your Advantage plan becomes primary.” - 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, certified financial planner and president at Mason & Associates. This is our third episode on our Medicare series with Bryan Gay of Boomer Insurance Group.
And we have Mike Mason, certified financial planner and founder of Mason & Associates. Co-founder along with his brother Kenneth Mason here today. So, on this episode you have myself, John Mason, you've got Mike Mason and then Bryan Gay from Boomer Insurance Group. Fellars, how we doing?
Michael Mason: Really good at this and I'm excited about this episode maybe changing 25 to 30 years of advice that we've been given. But if you don't stay up with the things that are changing, kind of like tax code and now Medicare and Medicare Advantage, then you'll get left behind.
So, I'm excited about this and Bryan, it's great to meet you today and be part of this show.
John Mason: And folks, if you've missed the last couple episodes, so this again, is a three-part miniseries on Medicare.
We’ve talked a lot about Medicare in the history of the podcast. We have episodes called Aunt IRMAA. We have other episodes that talk about FEHB and the coordination with Medicare.
But this is unique because Bryan Gay has real world 22 years of experience helping people acquire Medicare supplement plans and Medicare Advantage plans. And he's been a great resource for our clients.
So, if you've missed the last two episodes, you'll probably want to go back and listen to those.
This episode specifically TRICARE For Life and Medicare Advantage. So, let me say that title again, TRICARE For Life and Medicare Advantage plans, this is going to be completely foreign.
So, Federal Employee Financial Planning Podcast, what do we know about federal employees? We know a lot of you are also retired military. And a lot of you have TRICARE, access to TRICARE.
So, if this doesn't apply to you, we ask that you hang with us throughout the episode because these types of changes are not just changes that affect military, they’re changes that seem to be reverberating throughout all government health insurance, throughout FEHB and what have you.
So, hang with us. It may not directly apply to you, but we think you're going to love the information. Speaking of the information and the education that we're providing, our goal at Mason & Associates, empower, educate, and motivate.
We're doing that through this podcast, through our YouTube channel as well as one-on-one financial plans with clients. That by far is our favorite. We do financial planning first and we do content creation second.
If you like what you hear, five stars, check out the YouTube channel or connect with us on masonllc.net, if you'd like us to either A, give you a second opinion or help you through your financial plan.
So, guys, let's dive right in. Bryan, on the first episode that we did with you, we specifically talked about the car and the bus, and if you could talk really quickly about Medicare supplement plans and then we'll go ahead and also loop in TRICARE For Life and FEHB along with Medicare supplement plans.
What are those and then what's Medicare Advantage and what the heck is this car and the bus analogy?
Bryan Gay: So, I would highly recommend going back and listening to the other podcast about the details of the car and the bus.
But the quick cliff notes or the Reader's Digest version for those of us old enough to remember Reader’s Digest, the short version is there's only two options in the public sector when it comes to choosing how you receive your Medicare benefits.
You're either going to go with option one or option two. Option number one's been around a little longer and it's with Medicare as your primary with a Medicare supplement, which is also known as Medigap and a standalone prescription drug plan.
So, with option number one, you wind up with these three ID cards. You have your Medicare card, a supplement card, and a drug plan ID card. Now I refer to that a lot of times as the car, because it's usually more expensive for people to go that option, but it's a luxury.
You can go to whatever doctors, whatever hospitals, whatever specialist. You can get top tier coverage and medical advice. But it's more expensive for people to typically go that way, for option number one. So, that's like the car.
Now, on the other side of the coin is people who like the idea of trying to save as much money as possible, well you got to give up the game.
So, what ends up happening is this other program is called Medicare Advantage. Medicare Advantage does exactly what it is supposed to do, which is saves money. So, not 100% of the time, but the large majority of the time, people who choose to go on Medicare Advantage save money over their retirement.
But it's not designed for freedom and flexibility, Medicare Advantage is kind of more like the bus where you have to go where the bus goes.
So, like a network of doctors and with an Advantage plan you pay these little copayments when you go to the specialist, or you go to the hospital, or you go to have surgeries.
So, the normal everyday public person without TRICARE For Life, without federal employee’s health plans, that's their two options. They're paying for the car, or they can go wherever they want to go, and they have very little out of pocket when they do go, but they're paying more per month.
Or they'll go with Medicare Advantage, like the bus, and they'll pay as they use it. So, that's kind of the whole short version of the car and the bus.
John Mason: Thank you. I think it's just such a great analogy and it really just simplifies it down to both are applicable and both can be a resource for folks and we kind of gravitate towards Plan G or Medicare supplement plans for our private sector clients.
But we can't turn a blind eye either to the fact that Advantage plans, no pun intended, have a lot of advantages to them, one being cost. So, do you value choice? Do you value cost savings? Are you okay with a network of doctors? Do you want more choices?
Everything that we do at Mason & Associates is highly customized and individual for each client financial plan. But it's a good reminder, Mike, that we can't just go with the same old advice all the time because Advantage plans are compelling.
Michael Mason: Yeah, you have to get out of your comfort zone, which is hard for clients to do and it's just as hard for us to do as their advisors.
Because health insurance is, I mean, it is scary and folks, they do all their homework early and they've been with Blue Cross Blue Shield, let's say for the last 40 years and they've never researched it again. They just know it always works. So, they get afraid.
John Mason: Well, and-
Michael Mason: And to do that work again and try something different.
John Mason: Well Mike, we've said this for the 13 — I always say for, we've been doing this for 13 years that I've been here.
And in our default, not that we give bad advice around health insurance because I don't think we do, but the default for 13 years has been federal employee health benefits and TRICARE are pretty awesome.
Basic is pretty good. Nobody's ever complained about it. Nobody's ever had an issue with it. Maybe you're on some prescription drugs that I don't know about but seems like you might as well try basic and if you don't like it, switch back to the other one.
And that's kind of been, I don't want to downplay the advice that we're giving, but understanding formularies and understanding the different, who fits into what insurance box is not something that we've ever really been really, really that great at or emphasized that hard.
Michael Mason: And then some of the times we do, I get to tell the old stories where I wanted my dad to switch from Blue Cross Blue Shield standard to basic, it was going to save them $200 a month, plus they would get that $800 per person rebate for being on basic.
And he was so comfortable for 50 years with Blue Cross, he didn't want to do it. And by accident we got them on basic. We had signed up for basic during the open season.
Bryan, he got frustrated with me. So, I got back on during open season, switched it back to standard and then three months into the new year he called me, he says, “Mike, they're just charging me for the basic.”
And I said, “Well dad, I've got proof.” He says, “Well it seems to be working.” He says, “All I've got is eight more months to go, and if I don't like it, I'll change it.” So, that set off. Now, 10 years later dad's not here, but mom's still on basic, so-
John Mason: Well, and that's why Mike, we're so glad to have Bryan with us too because it seems like our financial planning practice is going to have to continue to morph and evolve like it always does.
What we said on the last episode is our clients can rest easy because we're not, and it seems like health insurance is going to have to continue to be a bigger part of the conversation that we're having with clients, with the Medicare Part D changes, the FEHB Part D plans that are coming out, FEHB advantage and supplement plans that are coming out.
Health insurance is going to be a bigger and bigger part of our practice. And Bryan, I just want to say thank you for being able to be there to help us through this transition because It's not going to be easy.
Bryan Gay: No, and it's complicated because it's per person, per family. I mean, different people have different needs, so everything's customizable.
John Mason: So, we've talked now about the car and the bus. We've defined advantage, we've defined supplement plans. I'd like to spend just a second discussing TRICARE and TRICARE For Life and what that means.
So, TRICARE is your military health insurance that you had while you were active military and into retirement. And TRICARE is TRICARE and TRICARE is awesome, but there's a big thing that changes at 65, Bryan.
And as we were prepping for this, you used a term that I thought was very interesting and it's the payer of last resort.
So, at 65, TRICARE becomes the payer of last resort, and our clients are forced to enroll in Medicare Part A and B and TRICARE changes, and it goes from being TRICARE to TRICARE For Life at 65.
So, a good way I think for our audience to think about it is the reason for the name change is essentially a forced enrollment in another insurance so that TRICARE becomes the backup or the payer of last resort.
Michael Mason: And to get that TRICARE For Life card, you turn 65, your TRICARE For Life card is your age 65 military ID, and then you can't get your age 65 military ID until you have your Medicare Part B card. So, they go hand in hand.
John Mason: Thank you Mike, that's awesome. Bryan, the Medicare supplement route versus the Medicare Advantage route, what's the experience like for a client in that?
So, when I think about my Part G supplement plan and I think about my Part D drug plan when I'm going to see these doctors, I don't have any out-of-pockets expense to see my doctor. I don't have any out-of-pocket expense for surgeries and things of that nature.
But I am paying if I have Part D cost for my drug plans. Compare and contrast the difference, one more time for our audience because then we're going to launch right into TRICARE and Advantage.
What's the Advantage experience like for most of America? What are they paying for?
Bryan Gay: Well, yeah, like you were mentioning the difference between supplements and Advantage plans. With that supplement you can go anywhere, do anything and you have very little out-of-pocket costs giving money to doctors and hospitals.
You pay a little bit more per month, but when you start using it, it's wonderful coverage with supplement, like Plan D for instance.
Well, now normal public people who don't have access to TRICARE For Life, who don't have federal employees plans, for some of these people, they're going to choose Medicare Advantage. So, remember the analogy of the bus.
Well, with Medicare Advantage, if you only have regular Medicare Advantage, then you have to go to the doctors that are covered by your Advantage plan. It's called a network of doctors. It's not a bad thing. A lot of people's group insurances these days make people go to certain doctors.
Well, so with these Advantage plans you'd have to go to for instance the UnitedHealthcare Advantage plan network of doctors or the Humana Advantage plan network of doctors.
And it's so funny because we hear people all the time going, “Well I don't want to go to some cut rate terrible doctor.” And I'm like, “Oh yeah, I wouldn't either, who's your family doctor?”
And they go, “Well, doctor Sedlaki,” well dang better recheck that because doctor Sedlaki takes most of these Advantage plans.
“Who's your specialist?” “Oh, well I go to Dr. Reagan, she's the best dermatologist in the state. I'm never going to give up Dr. Reagan.” I'm like, “Whoa, better check on Dr. Reagan because she takes a lot of these Advantage plans.
So, it's so funny to hear people who have preconceived notion with Advantage plans because they do make you go to certain doctors, but you'd be surprised on the quality and the quantity of the doctors that are covered by most of these Advantage plans these days.
So, it's not like you got to go 50 miles to the nearest person who takes your insurance and they've got a six-month wait. It's just not that way. It kind of used to be a long time ago, but it's not that way anymore.
But then, John, the other issue is the copays. So, without TRICARE, without federal employees, without anything else, an Advantage plan, you have this little nuance or nuisance really, it's like a nuisance copayment.
Like you go to the specialist on your Advantage plan. Well, you might have to pay a $35 copay, which I don't think is bad. You pay 35 for the specialist and your insurance company pays the rest, your Advantage plan pays the rest.
The other day we had a customer call, and he was so beside himself, he's like, “This is ridiculous. I went to the emergency room.” He cut his hand by the way, using head stripers, and literally almost cut his finger off.
So, he had a little small surgery in the emergency room, but he was complaining because his copayment was 100 bucks. And he's like, “What? Why do I even have insurance? I had to pay 100 bucks at the emergency room.” And I'm like, “100 bucks, your insurance company paid the rest.”
Because he's always saying, “What did my insurance pay?” “The rest, they paid the rest.” That bill's probably $25,000 and he paid $100 copayment because that's his copayment on an Advantage plan.
So, now my wife who's not politically correct, so I got to preference that, but she says the Medicare Advantage copayments are kind of like paper cuts. They're not going to kill you, they're just annoying.
So, the people who are on Advantage plans, they pay a lot less per month in a lot of reasons. In a lot of ways, they pay nothing per month for an Advantage plan. And then they go to go to the certain doctors, and they pay these copays. But everything changes when you have TRICARE, which sure, we'll talk about that.
John Mason: Yeah, I think we should dive right in. Historically, Mike, the advice has been at 65 enroll in Medicare A and B, your TRICARE For Life is free, your Medicare premiums are 164.90 per month in year 2023 and will change going forward.
And you're out of pockets when you go to see the doctor are going to be goose eggs. Like you're not going to have cost for healthcare in your retirement. And we've long said that this is the best coverage that somebody can have in retirement. But that may be changing.
Michael Mason: Yeah, I'm very interested to hear Bryan tell us about how that's going to change, how it's already changed today and what he sees in the future.
John Mason: So, Bryan, as we've talked about on prior episodes Advantage plans can be … we've just highlighted the good, the bad, the not so good, the not so bad parts of Advantage.
But what's always sticks out in my mind is this irrevocable decision to go on an Advantage plan and then be stuck there.
And on the previous episode we had talked about you go Advantage at 65 when you're middle-aged and bulletproof and then at 75, you have some cancer diagnosis or what have you and you want different coverage.
Well, it's at 75, you're not going to pass medical underwriting likely, especially if you've had a life event, which means you're not going to be able to make that switch to a supplement plan. So, that's one issue is like Advantage, you're stuck there.
The other negative that you and I have discussed previously is that if you switch off an Advantage plan mid-year and you are fortunate enough to get through medical underwriting, you still may have a gap in prescription drug coverage for three months or six months, the balance of that calendar year.
So, one, it's super difficult to get off Advantage in the first place and then two, when you're getting off Advantage and back onto traditional Medicare, if you're fortunate enough to do that, you're going to have a gap in drug cost or drug insurance.
So, how does it work with our military members? And your analogy about the Ferrari is really great and the rule changes that happened, I think you said three or four years ago, share with our audience the differences in how all this works with TRICARE.
Bryan Gay: Well, so I'll also preface this by I'm the exact same as mine. I mean for years and years and years and years, I mean we're talking the betterment of 14, 15 years, 16 years. I was telling anybody and everybody who's on TRICARE For Life or they're approaching TRICARE For Life, I would say the same thing every time.
First off, thank you for your service and next thing don't touch anything except get Medicare A and B. You're perfect the way you are. When you have TRICARE For Life, all you need is your Medicare Part A Part B and show that new military ID card that you're going to need to get and don't buy any more insurance and don't talk to anybody who sells insurance because they're just going to try to sell you something and you don't need it.
I mean that was my spiel forever. You're perfect, leave it alone. So, things change, advice changes because rules change.
But you also have to keep in mind, I didn't tell you this John, that. So, I was raised in a military family, so I was raised by my grandparents. My grandfather was a 23 veteran of the Navy. So, for those of the veterans, but that's either for me or against me sometimes with the Army versus Navy stuff.
But all of my healthcare growing up was military because they were on TRICARE For Life. And little people … don't really — have little known is when you're adopted like that, like we were, we actually got TRICARE For Life.
So, I personally grew up with TRICARE For Life and these little stitches in the top of my head are from TRICARE For Life paying for them.
So, I'm overly familiar with TRICARE For Life and that's another reason why I told people all you need is Medicare A and B and TRICARE For Life and you're perfect because that's literally like owning a Ferrari. It's the greatest healthcare you can get.
Now, when I was still talking to my friends back in Oklahoma, we always thought Cadillac was the best thing ever. So, it's like, TRICARE For Life is having like a Cadillac, because that was the top of the top.
But with the way things change, see here's what happened. TRICARE For Life only worked with something called Original Medicare. And Original Medicare is Part A and Part B, it's the little flimsy red, white, blue paper Medicare card.
And for years and years and years, as long as Medicare was primary, Medicare A and B was primary, your TRICARE For Life picked up all the copayments, all the deductibles.
And that's why people on TRICARE For Life, they walk into any doctor, they throw the Medicare card on the table, there's military ID on the table and they didn't have to pay for any doctors, any surgeries, any ambulance rides, they were just covered.
Well, then came Medicare Advantage plans in 2006, and people don't understand what happened with TRICARE For Life and Advantage plans. See when people go on Medicare Advantage plans, the Advantage plan company that you choose takes over for Medicare.
So, now Medicare A and B is no longer primary. Your Advantage plan becomes primary. And for years and years and years, TRICARE For Life would not coordinate benefits with an Advantage plan.
So, it was a disaster for people on TRICARE For Life to go onto an Advantage plan because now the TRICARE For Life people who've never paid a copayment at a doctor, they've never paid a copayment at a specialist or an emergency room. Now these TRICARE For Life people are paying these copays, they're paying $100 here, $30 there.
So, we used to tell all of our TRICARE people don't do Advantage plans. Well things change. And about three or four years ago, TRICARE For Life started coordinating benefits with Advantage plans. So, remember John, I was telling you about all those copays that people have generally with Advantage plans.
John Mason: Absolutely.
Bryan Gay: The paper cuts that are kind of annoying, those copayments. Well if you have TRICARE For Life, you don't pay those in copayments. So, you can have an Advantage plan, which keep in mind most Advantage plans in America do not cost the consumer anything because they're federally funded, they're paid for by the government.
So, you can get an Advantage plan in most areas and pay nothing for an Advantage plan, have TRICARE For Life as your backup to your Advantage plan.
And then when you go to the doctors, you give them your Advantage plan ID card and your Advantage plan ID card, Advantage and TRICARE For Life. And you still don't pay copayments for emergency rooms or doctors or things like that.
John Mason: So, before you had mentioned that having the … if you had enrolled in Medicare Advantage and you had TRICARE For Life before four years ago, it was like having a Ferrari parked in your garage with a Datsun with 400,000 miles parked behind it that couldn't move.
It was like you had this great vehicle that you can't drive because you have this barrier. And that barrier has now since been eliminated because we have this coordination of benefits.
So, if I'm hearing you right, under both scenarios, traditional Medicare or Medicare Advantage, I'm paying the exact same premium, 164 a month. It's either going to Medicare Part B or it's going to my Advantage plan.
Bryan Gay: Basically, yeah, you're paying it to the same person every time. The $164 and 90 cents that you're paying is going to Medicare and then Medicare has something to do with that money.
They're either paying your medical bills if Medicare's primary, but if you go on an Advantage plan, Medicare doesn't pay your medical bills anymore. They take your money, of course they take the $164, but then the Medicare pays the Advantage plan company a fair amount of money every month.
But now you don't have to pay for the Advantage plan in most areas because the federal government's giving the money to that Advantage plan company. And now that Advantage plan company has to take the money for Medicare and pay for your bills at the hospital, bills for prescriptions and things like that.
John Mason: So, why is a retired military person, if I'm paying the same rate for both either traditional Medicare or Medicare Advantage and under traditional Medicare, I have unlimited options of where I can go and under Medicare Advantage I have maybe more restrictions, albeit still great doctors like you mentioned earlier.
Why would I consider an Advantage plan over traditional Medicare if I'm paying $0 for both sets and it seems like I'm getting better coverage under option one anyhow?
Bryan Gay: Right, because you're thinking of it like, “Will I have original Medicare?”
John Mason: If it aint broke don't fix it.
Bryan Gay: TRICARE's picking up the balance. Well, so let's talk about these Advantage plans a little bit more.
So, if anybody's seen the rather annoying Joe Namath and Jimmie Walker commercials, they're always talking about Medicare Advantage, which is also known as Part C letter C like Charlie. But Part C is Medicare Advantage.
Well, these Advantage plans come with a lot of bells and whistles. So, let's talk about some bells and whistles real quick.
First off, there's vision. So, I'm going to go from kind of least to most. So, vision is something that TRICARE kind of lacks out a little bit on. But on top of that, with the vision of these Advantage plans, most of the time they'll give you 3, $400 towards glasses.
So, that's pretty nice. They also pay for the eye exam, which is also kind of nice to get a little money towards vision and eyeglasses and contacts. But then on top of that you also get money towards over-the-counter items.
So, like bandages, toothbrushes, vitamins, ibuprofen, Zyrtec, all these ace bandages. You get all this extra money from these Advantage plan companies where you can just get these over-the-counter items at no cost. So, then those come for free. So, that's a cost saver there.
But then there's some of these Advantage plans that if you have certain medical conditions, they'll even give you money towards food. I mean the TV commercials are about half right most of the time.
Well, so for instance, there's quite a few Advantage plans around Virginia that if you have that any type of heart problem, any type of diabetes, any type of lung disorders, or you're a little heavy, well then you meet certain medical requirements. And these Advantage plans will give you $50 a month towards your groceries or $100.
I mean there's some areas where they're giving you $200 per person per month for groceries. Well, most people buy groceries.
So, if you're on an Advantage plan and you and your spouse are getting 200 bucks a month towards groceries, that's an extra 400 bucks a month, which in Oklahoma where I grew up, it's about five grand a year that you don't have to spend on groceries because you're getting it from your Advantage plan company.
They're just giving you a debit card that's used at the grocery store. That's a pretty sweet deal.
Michael Mason: It seems kind of odd that you're overweight and they're giving you money for food.
Bryan Gay: For food. Well, because they're hoping that you actually buy carrots and apples instead of apple jacks and whatever else.
But yeah, and actually Mike, that's a good point because you're only allowed to buy certain foods with that money, they don't allow you to buy beer and cigarettes and things like that. So, there is a little bit of limitations on what you can purchase on those things.
But now on top of that, which is a big deal for a lot of our veterans is dental. Now, keep in mind you could always buy extra dental insurance which costs you 30, 40, 50 bucks a month.
Or the Advantage plan that doesn't cost you anything per month in most areas, well they'll give you 2, $3,000 towards dental.
Now, if you guys remember regular dental, they like regular employers where if I had to have a root canal, I pay 50% of the root canal and my insurance company pays 50% of the root canal. I mean that's pretty typical, right?
Michael Mason: Yes.
Bryan Gay: Not on these Advantage plans. Because most of these Advantage plans, it's like having a gift certificate to the dentist. Now you got to go to the in-network dentist so you just can't go to any dentist.
Like for instance, my dentist, my dentist actually takes a lot of these Advantage plans. I'm not on Medicare yet, but if I was on Medicare, if I was on an Advantage plan, there's some of these Advantage plans here in the Richmond, Virginia area where I could go get a crown and a root canal and not pay a single penny because I have $3,000 worth of dental coverage.
So, now after I use my first $3,000, then I'm on my own, the rest of the year I got to pay for my own dental.
But that's not a little bit of money either. I mean you got $3,000 towards dental, you get money towards food, towards groceries, you have money towards over-the-counter items, you get money towards vision and eyeglasses.
So, there's a lot of little extra bells and whistles that come along with these Advantage plans that the TRICARE For Life people can get on and then at some point if they don't like the Advantage plans, they can — a TRICARE For Life person. This only works if you have TRICARE For Life by the way. I can't say that enough times, this only working with TRICARE For Life people.
But in the middle of the year, if you do not like your Advantage plan, you can completely cancel your Advantage plan and it pops you right back over to Original Medicare as primary, TRICARE For Life as your secondary and TRICARE For Life still covers your prescription drugs.
Michael Mason: So, it seems like to me, the only time you're not going to be happy with your Advantage plan is when your health takes a really severe turn, and you may need some specialists that you're not going to have access to on Advantage.
Bryan Gay: That would be the only reason. That's right, Mike. I mean, the only reason why you would not like to have an Advantage plan and TRICARE For Life is if you just needed to go to Johns Hopkins or MD Anderson or somewhere like the Cleveland Clinic, but still you canceled your Advantage plan and that takes effect the first day of next month.
So, if you didn't like your Advantage plan in July and you canceled it in July, August 1st, you're back to where you were and you're heading over to the Cleveland Clinic.
John Mason: It's truly amazing when you start thinking about this, like it's effective the following month and remember you said earlier, Bryan, I want to make this distinction because it's very important that, TRICARE is the payer of last resort TRICARE For Life.
And as we were practicing and getting ready for this call, I'd asked you the question is, “Well if I'm still on a Medicare Advantage plan and I go out of network, I go out of network to receive care what happens?”
And the answer was, “If the Medicare Advantage plan didn't pay, TRICARE For Life's not paying.”
So, it's very important to know that if you're in the middle of switching between Advantage and traditional Medicare, that you have to wait for that switch to take effect if you want TRICARE to pay for that out-of-network doctor.
Bryan Gay: Exactly, right. Yeah, you want to wait to go to whatever doctor you'd like to go to for the first of the next month kind of thing because otherwise you have to stay in the network of Advantage plan doctor.
Now, keep in mind there are some Advantage plans that give you out-of-network benefits, but you got to weigh those odds. Like some of those Advantage plans that do allow you to go out of network, maybe they have less dental, less vision, less money towards groceries.
So, then you kind of pick and choose which Advantage plan would work best for that particular person who goes to that specific group of doctors, that kind of thing. So, it's always client specific.
John Mason: So, thank you Bryan. Mike, I have a quick question for you, and I know you've heard this gripe for a long time. I don't know when it changed, when retired military folks were forced to enroll in Medicare, but what is the most common complaint that we hear from retired military about healthcare?
Michael Mason: Oh, yeah, “They promised me healthcare for free for the rest of my life, but now I have to pay for Medicare Part B, so it's not free.”
John Mason: And what I'm hearing now is because the government is giving all these private sector health insurance companies 1000 or $2,000 a month, whatever it is to be on an Advantage plan. Bryan just said $3,000 a year in dental, 4,800 in food, vision, drugs, gym memberships, and I don't know, I got to 10 grand pretty quick.
I got to 10 grand pretty quick in benefits from an Advantage plan. So, if I'm paying just let's call it 200 bucks a month for Medicare, that's $2,400 a year that I'm paying. But Bryan just told me that I'm getting $10,000 a year in benefits.
So, it seems like what the government has done is they're paying you $8,400 a year to have free health insurance, unless I'm missing something.
Bryan Gay: And we actually are missing something John, because I didn't even mention there's something called a Part B reduction. So, some of these Advantage plans, again in certain areas, will actually give you money back towards your part B premium.
Again, I'm just going to go with Richmond, Virginia because that's easy for me to name off the cuff. But there's a few Advantage plans here in the Richmond area that will pay the consumer 50 bucks a month towards their Medicare Part B premium. And there's another one that gives $100 a month towards their Medicare Part B premium.
So, for the people who are really upset about having to pay the government $164 to pay for Medicare Part B, if they choose some of these Advantage plans, that already lowers that Part B premium from 164 down to only $64 because they're getting $100 from their Advantage plan to reduce their Part B premium.
Michael Mason: So, I'm going to make a couple of statements and I want you guys to correct me if I'm wrong here. First is going to be a question. Let's say I'm the military retiree and I'm subject to an IRMAA increase in my Medicare part B premiums.
So, I'll make up a number instead of 165, I'm at 330. Is that the same thing if I'm on the Advantage? If it's Part B 330, then it's Advantage 330 as well?
Bryan Gay: It is John, now there's a little bit of trickiness in there. Because what happens is the IRMAA is for Part B as in boy and also for Part D as in delta. So, there's same IRMAA, same old lady, she's not real nice, she's a conspiracy theory extortionist, that's what I call her.
But what happens is with TRICARE For Life you have to have Part B and if you have a higher income, you have to pay more for Part B. Well, you pay more for art B whether you're regular Medicare or on a Medicare Advantage plan.
Either way you go, you always pay the base rate for Medicare plus your IRMAA for Part B as in bravo.
Now, your TRICARE For Life is not really classified as a Part D drug plan. So, they don't have to pay the IRMAA for TRICARE For Life because it's not classified as a part D plan.
Michael Mason: That's a great point. You don't have to pay the D as in David, IRMAA, just the B as in boy, IRMAA. So, many of our clients are federal employees with federal employee’s health benefits.
And we tell them or advise them during the open season maybe you can save a little bit by switching from this plan to that plan. And then we always say, and if you don't like it, well you can come back 12 months later and switch again. So, you're not in it for life.
But it sounds to me this is for military retired with TRICARE For Life, this is almost like a social security decision, it's monthly. If you decide this month, I'm not turning on social security, will you get to have that decision again next month and the next month and the next month.
If I go Advantage and I go three months, and I think it stinks for no other reason, I just think it stinks. Well, I can go back to traditional, or if I test drive this thing using your car analogy, I test drive this thing for six, seven years and I've loved it.
And then, I have that extreme change to my health. Well, I can still go back there and all the money that I've pocketed and the extra benefits that I've received by being on Advantage.
Bryan Gay: That's right. Now, you can always get out, but you can't always get back in month to month. So, if you would like an Advantage plan, then you need to sign up for an Advantage plan between October 15th through December the 7th because that window of time is the Medicare annual enrollment period.
So, October 15th until Pearl Harbor Day, which I think is ridiculous that they ended the enrollment period on Pearl Harbor Day, but totally different subject. But during those 68-day windows of opportunity, you can get an Advantage plan.
Now, when you sign up on an Advantage plan during the enrollment period, it wouldn't start until January 1st. So, then that's when you're test driving that advantage program.
You can test it for January, February, March, and if you like it, you keep it. And if you don't like it, it's basically canceled anytime, and you go right back to regular Medicare with TRICARE For Life as your secondary.
John Mason: Unbelievable. These benefits and the advice that we can be able to give to clients, and this podcast is going to change the lives of retired military folks throughout the country and it's going to change the way that we deliver financial planning advice to our clients for the balance of this year leading up to the Medicare enrollment period, this fall, Bryan, it’s tremendous.
It's a huge opportunity for folks. And we're running short on time here, so we need to transition into action items, but I had one final question for you on international coverage.
Like we talked about on a previous episode, we have a lot of clients that travel, and I don't know if you can speak to this offhand and I'm certainly not an expert. How does TRICARE pay if I'm in Europe and I need a medical procedure?
Bryan Gay: Not really well.
John Mason: It doesn't pay well or you're not too familiar?
Bryan Gay: From what I've seen, it doesn't pay very well overseas. I would always recommend getting traveler's insurance. Again, a little policy goes a long way.
John Mason: Okay. And traditional Medicare-
Bryan Gay: We don't even sell traveler's insurance, but that's a good thing to do.
John Mason: And you mentioned on the last episode, traditional Medicare doesn't pay overseas either.
Bryan Gay: Not a dime.
John Mason: But Advantage plans reimburse you?
Bryan Gay: Well, Advantage plans are supposed to reimburse you, but it's kind of a pain in the neck to try to get an Advantage plan to pay or an out of country bill because they have all these stipulations where you got to get very detailed itemized statements.
And again, I've been doing this for a long, long time. I mean, we've got almost 10,000 Medicare clients, we've got like 9,300, I guess. But Switzerland for instance, will absolutely not give you an itemized statement and you'd be surprised how many people will get hurt in Switzerland.
So, no matter what, just chalk that up to nobody's paying yet unless you have traveler's insurance.
John Mason: Got it. That's perfect. Well guys, let's transition and do a few action items. And before we go there, Bryan, our third episode with you, thank you for being a part of this, this Medicare miniseries I think has been great, tremendous value for our clients and listeners throughout the country.
So, I didn't want to forget that. Thank you for being with us and being a part of the podcast.
Bryan Gay: You're very welcome. Thanks for having me.
John Mason: Alright guys, let's go around the room here, action items as we finish out this episode.
Michael Mason: Well, it's kind of simple for me, and I'm going to take a lot of action items myself and look back through our book of business, military retirees and have this conversation with them, no doubt.
John Mason: Bryan, how about you?
Bryan Gay: I would say if they're open to learning about their own circumstances and what's going on with how it could benefit them, because it may be a good idea, might not be a good idea.
So, if somebody who's listening to this is a TRICARE For Life person, then just give you guys a phone call, give us a phone call and we'll take a look at that scenario. And if it's right, then we can look at doing an enrollment during the enrollment period and they can test it out for a month or a year or 10 years.
John Mason: That's right. So, Boomer Insurance Group out of Richmond, Virginia, this is Bryan Gay. Bryan, your phone number?
Bryan Gay: It is (804) 464-8960.
John Mason: There we go. So, if you guys have Medicare questions, you can give Bryan a call. Our phone number at Mason & Associates (757) 223-9898.
My final action item for today is, remember our theme at Mason & Associates is educate, motivate, and empower.
And we hope we're doing that through this education and through our meetings with clients. And we want to challenge you to basically challenge the status quo. The rules that you knew yesterday are no longer the rules that we're playing by today.
Life is changing quick, fast, in a hurry. You can rest easy now because we're not and we're Mason & Associates. We thank you, we're hopeful that you use this podcast and the information that we're producing to make some change in your financial plan.
Although it can't be construed as investment or financial planning advice, we're hoping that you can use this education to be empowering and motivating for you and your financial plan.
Thanks for being with us on the Federal Employee Financial Planning Podcast, we’re Mason & Associates, masonllc.net .
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.