Stephanie McCullough: (0:06)

Welcome to Take Back Retirement, the show for women 50 and better, facing a financial future on their own. I’m Stephanie McCullough. Along with my fellow financial planner, Kevin Gaines, we’re going to tackle the myths and mysteries of “retirement,” so you can make wise decisions toward a sustainable financial future. Through conversations and interviews, you’ll get the information and motivation you need to move forward with confidence. We’ll be sure to have some fun along the way. We’re so glad you’re here. Let’s dive in.

Stephanie McCullough: (0:41)

Coming to you semi live from the beautiful Westlakes Office Park in suburban Philadelphia, this is Stephanie McCullough and Kevin Gaines of Sofia Financial and American Financial Management Group. Say hello, Kevin.

 

Kevin Gaines: (0:51)

Hello, Kevin. Today, we actually have a guest, Susan Sloan, to talk about Medicare and the whole exciting world that that is. I’ve actually known Sue for a while from a weekly lunch that we do, and we always have these interesting conversations around Medicare. She’s been somebody we’ve wanted to bring on for a while because Medicare is a huge part of your retirement.

Stephanie McCullough: (1:18)

It is. Once you hit 65, as we’ll learn, this is a huge part of your health insurance situation so it really pays to understand it before you get there, or heck, even if you’re already there to understand it better.

Kevin Gaines: (1:31)

Exactly, because there’s a lot of things that can still change even once you start it. Without further ado, welcome Sue Sloan.

Stephanie McCullough: (1:42)

Sue Sloan, welcome to Take Back Retirement.

Susan Sloan: (1:44)

Hi Stephanie, thank you for having me as your guest. I appreciate that.

Stephanie McCullough: (1:48)

Absolutely. So the first question is, how do you know so much about Medicare and health insurance?

Susan Sloan: (1:55)

Well, many years ago, I started working for Independence Blue Cross. I worked with individuals as well as I worked with providers at Independence Blue Cross, and I got to learn a lot about how health insurance works at the health insurance end of things. What I really got to know was how people don’t understand their benefits and how the doctors really don’t understand the benefits, and that can cause lots of problems for lots of people. So then I decided, you know what, I really want to get into health insurance sales because I really wanted to do something that was going to do more for people than me just sitting at a desk saying, “Yes, this is covered. No, that’s not covered.” And so, I found out through the grapevine that there was a hospital that was $7 million in the hole and needed help getting that money back, and needed somebody who knew the Blue Cross system, not just Independence but nationwide. And so I said, I’ll help you. I took a pay cut, but what I got out of that was the provider end of billing.

Stephanie McCullough: (3:11)

When you say provider, like health care provider, right?

Susan Sloan: (3:14)

The health care provider, the hospitals, the doctors, because in reality, the doctors and hospitals and the insurance companies live on two separate planets. And if you’ve ever had to have a procedure done and watched your doctor being very frustrated that he or she had no control over whether a procedure that he or she wanted to do was going to be performed, that’s because of the insurance companies. Basically, I’ve got the $7 million back for the hospital and then some, even some things they’ve written off.

Kevin Gaines: (3:52)

That should make them happy.

Susan Sloan: (3:54)

That tells you I can do a lot of arguing, and I’m good at that. And so basically, I said now I want to go on my own and get into health insurance because it gave me that background. So what I do for my clients that is somewhat different than what a regular insurance agent does is, I know the products in and out. But when you have problems, whether it’s with insurance companies, whether it’s with Medicare or Social Security, whether it’s with Medicaid, I’ll get on the phone with you and I will do the legwork. Sometimes all I need you to do is give me permission to speak, and then I’ll do all the talking. You don’t have to do it. That’s the big thing, and a lot of times you don’t even have to be on the phone.

Stephanie McCullough: (4:44)

That’s such a gift. I mean, when you said doing insurance sales, you’re really more like having an advocate.

Susan Sloan: (4:49)

Yeah, and that was part of it because, as I said, I was really frustrated at the insurance companies. I had a woman whose face was bitten off by a dog one time, and that happens, dog bites are one of the most common injuries in the country. The surgery to keep her alive was covered, but the surgery to have her look more like a human being again was denied as cosmetic surgery.

Stephanie McCullough: (5:20)

Oh, come on.

Kevin Gaines: (5:22)

Wow.

Susan Sloan: (5:22)

Yep, went all the way to the state Supreme Court.

Kevin Gaines: (5:26)

Holy smoke. Did you win, or did she win?

Susan Sloan: (5:31)

No.

Kevin Gaines: (5:32)

Wow.

Susan Sloan: (5:32)

No. At that point, I don’t believe she did. And so, therefore, what that ends up doing is bringing a lawsuit towards the doctors. It just drags things out, and that can happen at… Medicare, what people forget, and to bring this back to Medicare, what people forget is Medicare is basically the federally run insurance company. It’s the largest insurer in the country. It has the largest network of doctors and hospitals in the country. Virtually, all hospitals with very few exceptions participate with Medicare, and probably at least 80%, 85% of doctors participate with Medicare. Maybe more than that. It’s not necessarily that they want to because reimbursement rates are not amazing, but they have to, because they are the largest insurer, and if they don’t participate, they’re not going to have a whole lot of clients. And remember, doctors and hospitals, while you think of them as caregivers, they’re also a business. And that is important when you’re looking at this.

Kevin Gaines: (6:35)

And you’ve had the advantage of working basically on all three points of the insurance company, not Medicare per se, but insurance company, the health care provider, and now what you’re doing for individuals, helping them figure out what they need and such. So, that’s great. So when it comes to Medicare, what do you need?

Susan Sloan: (6:58)

Right away, when you turn 65, you must have Medicare Part A. If you’re already receiving Social Security or if you have been on Medicare disability, then you already have your Medicare card. If you’ve been receiving Social Security benefits, you will automatically get your card in the mail. But if you have not, you have to apply for Medicare Part A and if you don’t, there’s penalties. Those penalties can be very steep, and they can delay when you can go on Medicare. And if you are an individual, if you’re not covered under group insurance but you’re covered under individual insurance, there’s a hard stop. When you turn 65, you don’t have individual coverage anymore. You may still have your card. They may still continue to bill you for a little bit but if they have to pay a claim, it’s going to get canceled back to when you turn 65. That is a really important point.

Susan Sloan: (8:00)

If you do not have Medicare Part A or B, then… I walk people through all the time setting up an account on Social Security, ssa.gov, Social Security Administration. I walked them through that, and then you can apply right online. Not everybody is set up to do that but most people can just go right online. And once you’ve set up your account, then you just click the retirement button. Obviously, you’re applying for Medicare Part A. If you don’t have group insurance in place, then you will probably apply for Medicare Part B as well, and I’ll explain what they are in a minute. You also at that time decide whether you are going to take Social Security or not.

Stephanie McCullough: (8:50)

That’s interesting. You sign up for Medicare on the Social Security website.

Susan Sloan: (8:54)

Right. You don’t sign up on the Medicare website because you’re paying for Medicare through social security.

Stephanie McCullough: (9:00)

Ah.

Susan Sloan: (9:01)

Eventually, that’s where, once you have Social Security benefits. They pull your premium for Medicare Part B out of your Social Security check.

Stephanie McCullough: (9:12)

Got it.

Susan Sloan: (9:13)

You are the payer. Medicare is the insurance company but the payment goes through Social Security, and the setup goes through Social Security. It becomes a pretty complex process because Social Security has to share your information and sometimes they don’t get it right. So there can be issues. Most of the time not, but there can be. And if you’re one of those unlucky people, don’t feel that you’re the only one. Happens all the time. So anyway, you apply for Medicare A, you need that. If you are currently working and you are not in a retirement Medicare plan, but you’re just getting your regular under 65 benefits, do not apply for Medicare Part B. You’re not going to get any benefit out of it, and it’s going to cost you at least $148.50 a month. It can cost all the way up to around $500 a month, depending on how much you’re making in a year.

Susan Sloan: (10:17)

So don’t apply for Medicare Part B, you’re not going to get any real benefits out of that, but you do need to have Medicare Part A. Medicare Part A, you have already paid for by virtue of working. As long as you’ve worked 10 years in your lifetime, 40 quarters, 10 years, you qualify for Medicare Part A with no cost. If you’ve worked less than that, then there can be charges for Part A as well.

Kevin Gaines: (10:45)

And then, kind of circling things back that those 40 quarters come into play with Social Security because you need your 40 quarters to be eligible for Social Security as well.

Susan Sloan: (10:56)

Right. That can be a problem a lot of times. It could be a homemaker who never worked at all, but that’s typically not the case because you can also apply through your spouse’s. But where it can be a problem, and I see it all the time, is somebody who moved here from another country. And so, I will have people who’ve moved here from other countries who do have to go through individual health insurance until they have enough quarters, or they may never get enough quarters because, as I said, I think it’s $471 or $477 a month for Medicare Part A if you don’t qualify for it.

Stephanie McCullough: (11:40)

That’s not nothing.

Susan Sloan: (11:42)

And then at least $148.50 for Medicare Part B, so you’re talking over $600 a month. And then you may end up buying a Medicare Advantage or Supplement plan, it can get quite expensive. So for those people, you can get individual insurance if you don’t qualify in any way for Medicare. But then, not typical.

Stephanie McCullough: (12:05)

One question on the group insurance. If I’m still working past age 65, do I still have to sign up for my group by Part A?

Susan Sloan: (12:11)

Yes.

Stephanie McCullough: (12:12)

Okay.

Susan Sloan: (12:13)

You have to have it. And if you work for a company that has 20 or more employees, then the group insurance will be primary and Medicare will be secondary. If you work for a company that has less than 20 employees, you’re really encouraged to go on Medicare. They really strongly want you to go on Medicare and drop the group insurance. If you do choose to stay on the group insurance, and I wouldn’t really recommend that, but if you do choose to stay on the group insurance, then Medicare would be primary and your Medicare A would be primary and your group insurance would pay secondary for inpatient.

Stephanie McCullough: (12:52)

Is that the same for spouses, non-working spouses who are on the group health insurance?

Susan Sloan: (12:58)

Yeah.

Stephanie McCullough: (12:59)

Okay.

Susan Sloan: (13:00)

I have clients who’ve been working all the way up into their 90s and not dropping the group insurance. I’m not even sure that that’s a good idea because typically, you’re going to have more out of pocket unless you have an amazing job with a union or something like that. Typically, you’re going to have higher out of pocket expenses under your group insurance than you would have had with Medicare.

Kevin Gaines: (13:23)

But that’s why somebody would come to someone like you because you’re going to help them walk through the particulars of the situation to say this is probably what’s going to work best for you.

Susan Sloan: (13:34)

Right. They will call me who are not sure, who qualify for various health benefits. I just had someone a couple of days ago who had union benefits through a major company, very large company, and they were charging her $355 a month. And she still had over $2,000 out of pocket expenses a year plus she had to get a prescription plan, and she’s been on it for forever but the group… Finally, that large corporation is dropping the Medicare, their Medicare retiree, the program, which is a good thing for her because I can get her a plan where she has no out of pocket expenses for the year, the F plan, which is the top of the line plan. No out of pocket expenses for the year at all. It’s cost around $166 a month. With her prescriptions, she’s probably going to pay like an extra $15, so $181, $182 as opposed to $355. And she has no out of pocket expenses other than for the prescriptions.

Stephanie McCullough: (14:41)

That just points out that you really have to pay attention to this stuff.

Susan Sloan: (14:48)

You can’t just say, “Oh, I’ve been on my group insurance forever.” A lot of people stay with their group insurance because in this country, most people, since the time they were in their late teens or early 20s have had an employer take care of their insurance. And that’s the big thing. They are afraid to do it themselves, and so they just say I’ll stay with… Without even looking at what the options are, I’m just going to stay with this because it’s easier.

Kevin Gaines: (15:18)

The devil you know.

Stephanie McCullough: (15:20)

Well, it’s hard to understand those descriptions aren’t always the clearest things either.

Susan Sloan: (15:23)

Right. One of the things that we’re starting to do is take a look at going to small, medium size, even if large companies want, and come in and talk to their people who are thinking about retiring.

Stephanie McCullough: (15:37)

Yes, on the cusp.

Susan Sloan: (15:40)

Whether it’s to go on individual insurance, which I also do, whether it’s to go on group insurance, we’ll sit down and go over what their benefits are because… And this is very important. You can have somebody calling you from anywhere in the country. You went online, you Googled something and all of a sudden, agents are calling you left and right. But the thing that you have to be careful of as someone, if you have a retiree program, sometimes you have to take everything or you get nothing. Some companies will allow you to split off the medical and still keep other retirement benefits, others will not. And so it’s really important. I find myself on the phone all the time either with their human resources department or whoever their company has farmed out the retiree benefits to, I’ll get on the phone and say, what is the retirement package if you drop the group insurance and go on Medicare, and either a Supplement or a Medicare Advantage plan? We have to find out what you’re going to lose in your retirement package because retirement packages aren’t always just about health.

Kevin Gaines: (16:50)

I want to shift gears here because we’ve thrown out quite a few letters at this point. Will you walk us through what all these letters mean, A, B, F?

Susan Sloan: (17:02)

Right, part A and B. And remember, the key word is part, not plan, but part. Part A are your inpatient hospital benefits. Anything done on an inpatient basis, whether it be hospital, skilled nursing facility because there’s limited skilled nursing facility benefit of up to 100 days per incident, inpatient blood, hospice care, all falls under Medicare Part A. Now, the reason that in order to get a full Medicare insurance plan, be it a Supplement or an Advantage plan, that you also have to take part B. Part A was all inpatient. Most of your stuff is going to be outpatient, that’s Part B. That’s the doctors. That’s any diagnostic tests. That’s any outpatient surgeries, home health care. The majority of it falls under part A, little bit under Part B, or Part B, with a little bit under Part A.

Susan Sloan: (18:04)

If you’re doing foreign travel, that can fall under… Well, foreign travel does not come under Part B, it comes under a Supplement, but basically it would be a B benefit. Anyhow, you need to have A and B together. Once you have A and B together, then you have the ability to get a full health package.

Stephanie McCullough: (18:25)

What do you mean by a full health package?

Susan Sloan: (18:29)

That’s when you start thinking, now I have Medicare but Medicare has a lot of gaps in it. Are they deductibles are like over $1,400? And then it can get quite expensive under Part A, for inpatient hospitalization. Part B, everybody knows this one, there’s the deductible. The Part B deductible is $203 and then Medicare pays 80%, and you would be responsible for 20%. That leaves you with some pretty serious gaps, particularly the Part A, but also it can be under Part B, some pretty serious gaps as to how much money you’re going to owe out of pocket.

Stephanie McCullough: (19:05)

Got it.

Susan Sloan: (19:06)

And remember, at 65, you may have a giant nest egg. But you might live to 95 or more. That nest egg is dwindling. So you really have to think about how you’re going to cover expenses. And let’s face it, as your money is dwindling, the cost of healthcare is going up so you really have to think about your expenses. The two typical ways most… Some people stay just with Original Medicare Parts A and B. Most people either do a Supplement or a Medicare Advantage plan. The Supplemental plans work in conjunction with Medicare. Medicare is going to be your insurer. When you buy a Medicare Supplement or another word for it is Medigap Plan, those plans are issued by a private insurer, whether it’s a life insurance company or a health insurance company. What’s really important is to remember if you have Medicare Supplement and Original Medicare and you go to the doctor who is your insurer. Say if you bought your insurance through ABC insurance company for your Supplement, and Medicare, who’s your insurer? Medicare.

Stephanie McCullough: (20:25)

Medicare. Medicare is always-

Susan Sloan: (20:28)

Medicare is paying a majority of the bill.

Stephanie McCullough: (20:32)

Okay.

Susan Sloan: (20:32)

The Supplement is exactly what it says it is. It’s a Supplement, or the other word is Medigap, it fills in the gaps that Original Medicare doesn’t pay. So a lot of people will say, “I’ve been with ABC insurance company forever and they’ve always taken good care of me.” Maybe they haven’t sometimes, but you forget about it at that moment. And you’re sitting there saying, “I want to stay with ABC insurance company who offers a Medicare Supplement.” And guess what? They’re charging twice the price of what some of the other companies are charging. It doesn’t make any difference who your insurer is.

Stephanie McCullough: (21:18)

For the Supplement?

Susan Sloan: (21:20)

Right, for the Supplement. All the plans are the same. And A Plan is… Not Part A, but Plan A is the same no matter which insurance company you get. B is the same. C is the same. F, G and on and on and on, they are all the same. The benefits are set by the government, not by the insurance company. So despite the fact that some insurers will do television commercials and say, “Oh, we have the best.” No, they don’t. They have the same that everybody else does. And typically, it is not the insurance company who decides whether a claim is going to be paid or not. It is Medicare. All a Supplement can do… Because it is a Supplement or a gap filler, Medigap, all the Supplement can do is if Medicare approves a payment, then the Supplement will pay after Medicare, depending on what benefits you chose.

Susan Sloan: (22:22)

They have no say at all as to whether something is going to be paid or not. If Medicare does not allow a charge, declines to charge, the Supplement cannot pay. And the thing that’s important when you have Medicare and a Supplement. This argument is typically between the provider and Medicare, as to whether a procedure can be done or not, whether it’s going to be covered by Medicare or not. And so sometimes, you’ll be waiting for a surgery to be approved. And when you’re on Medicare, it can take a while because the doctor’s office is arguing back and forth as to what they can and can’t do, to have that covered.

Susan Sloan: (23:10)

It is very important if you are on Medicare that you ask your providers, is this going to be a covered service? Even down to digital mammograms, Medicare doesn’t necessarily cover them. And the doctor supposed to give you a form that you sign that you’ve been told that this procedure may or may not be covered, if the doctor has any question as to whether it’s going to be covered or not. But don’t wait for that. Because, if you have a good relationship with your doctor, ask the doctor, “I know you want to do this. Does Medicare typically cover this?”

Stephanie McCullough: (23:48)

Yeah, because you should know.

Susan Sloan: (23:52)

You want to be informed, so that you don’t get the surprises. Don’t feel that you don’t have the right to ask is it going to be covered or not, it’s your money.

Stephanie McCullough: (23:59)

Yeah, good.

Kevin Gaines: (24:00)

Yeah, and you actually hit on a point, that’s a recurring theme among us is in retirement that surprises normally are not good things.

Susan Sloan: (24:12)

No. Typically, in anything. If that involves money, surprises are very often not good thing. And especially if it involves the government.

Kevin Gaines: (24:21)

You’re drawing a distinction between, you’re saying, the Medigap and the Supplements. Medicare Advantage doesn’t work the same way, is that correct?

Susan Sloan: (24:31)

No, it is not. Medicare Advantage plans, they’ve been around since the 1980s. They really weren’t very heavily sold until the mid like 2005, 2006, 2007. After the Medicare, the new Medicare prescription drug plan went in, which was January 1st, 2006.

Kevin Gaines: (24:56)

And that’s Medicare Part D?

Susan Sloan: (25:00)

No, that’s Medicare Part C. Medicare Advantage is Medicare Part C. Medicare D is your prescription drug, and I’ll get into that. Medicare Part C are the Advantage plans. That is where you’re still part of the Medicare system. You must have Medicare A and B in order to have a Medicare Advantage plan, but you have elected to not use Medicare as your insurer. You have elected to use a private insurance company as your insurer. Those are always health insurance companies. Whereas I said with the Supplements, they can be health insurance companies. They can be life insurance companies because they are not Medicare as your insurer or under a Supplement.

Susan Sloan: (25:42)

Medicare Advantage plan, the insurance company is your insurer. You never show your Medicare card because if you show a Medicare card to a doctor, that tells them to bill Medicare first and Medicare will deny the claim if you have an advantage plan. You’ll get a denial because it will go to them and they’ll come back to the doctor and the doctor will shoot you a denial letter out immediately, and then you’ll have to say, “Oh no, I have an Advantage plan. Bill the insurance company.” So to avoid that and to avoid a little bit of a heart attack because bad news always rise on Friday afternoon at four o’clock, to avoid all of that, you want to just remember if you have an Advantage plan, only show your Advantage plan part. Medicare Advantage plans can have a zero premium. They can have, I think there’s one that’s $280 a month.

Susan Sloan: (26:40)

Typically, most people are buying zero or low-cost plans, because when you get into the higher cost Medicare Advantage plans, you’re probably better off with a Supplement. Because Medicare Advantage plans can have out of pocket maximums at the low end $3,400 for the year. That’s the maximum that you will pay before everything, and that’s not including your premium. This is $3,400 a medical cost all the way up to for this year, for 2021, they are now allowing up to $7,550 out of pocket maximums. Anywhere from $6,700 to $7,550 are usually on the low cost or zero premium plans. You’re not going to find a zero premium plan with a $3,400 out of pocket maximum. Not happening. Not at $3,900. It’s going to be the $6,700 or $7,500.

Stephanie McCullough: (27:40)

So just to make that super clear, if you’re paying zero premium for this insurance plan, something’s got to give. So you’re out of pocket before you get any benefit is much higher than if you’re paying a premium.

Susan Sloan: (27:49)

Well, no, it’s not before you get any benefit. Out of pocket maximum is the maximum you can spend if there is a deductible. Most of the time there isn’t, but there can be. On deductibles and coinsurance, that’s where you’re paying a percentage of costs and copays.

Stephanie McCullough: (28:05)

Okay.

Susan Sloan: (28:05)

Now, that’s if you’re using in network benefits. If you’re using out of network benefits, it can be as high as $10,000 out of pocket. Out of network, you can always be balanced. Those are the difference. So you want to make sure that all your doctors and hospitals and everybody you go to participate with your insurance. It is very important to realize that these benefits, even if you go with the largest network available, and I’m trying not to name names, are not going to be nationwide benefits. So if you’re looking at a Medicare Advantage plan and you’re thinking, I’m going to be doing a lot of traveling as I get older, or I’m going to go visit my children who live in other states or friends who live in other states, or you have a home out of the area, you better make sure that Medicare Advantage plan has the network of doctors where you’re planning to go. Otherwise, in most cases, a Supplement is going to be better insurance for you because Medicare is nationwide, as well as all the US territories.

Stephanie McCullough: (29:17)

Ah, that’s good to know.

Susan Sloan: (29:19)

Whether you go to the US Virgin Islands, Guam, Medicare is in all of those. Whereas a Medicare Advantage plan, you have to use their doctors and hospitals that participate with that plan. If you go on to some of the major insurers and you try to look up doctors, do the provider lookups, you’ll find out that the insurance company may have 50 different plans, and you have to make sure that you’re looking up the network for your plan.

Stephanie McCullough: (29:47)

Not just your company but your plan.

Susan Sloan: (29:50)

Right, not just your company but for your plan. And so, obviously, when we first start out, when somebody wants a Medicare Advantage plan, I’m going to definitely make sure that all their providers are participating. You can call the provider, but the most up to date information as to whether they’re participating or not, because the girl in the office may not know. A lot of times they just say, “Oh, sure.” They’ll hear the name of an insurance company and they’ll say, “Oh sure, we participate with that,” without even looking to see whether they participate with your particular plan, and that can cause real problems. And so you want to look on their website. And if you don’t have access to a computer, but a lot of my clients call me, I’ll look it up, or you can call the insurance company.

Susan Sloan: (30:42)

People are afraid to call their insurance companies. I don’t know why. You’re paying them. They’re working for you. If you don’t like the person you get on the phone with and it sounds like they just got dragged out of a slump, then hang up and call back again. You’ll get somebody else. You’re not going to get the same person twice. And make a phone call. But as I said, for my clients, a lot of times I’ll do that for them. I’ll check it if they have somebody that they’re afraid is going to participate or not participate.

Kevin Gaines: (31:18)

Now, if you need to switch because the plan you have isn’t working for you, the Medicare Advantage plan isn’t working for you, can you switch whenever you want, or are there only-

Susan Sloan: (31:28)

No. I’ll do it both ways. Medicare Supplements, you can do any time of the year. You can make switches any time of the year. There are no rules, except if it’s been more than six months since you went on Medicare Part B. Medicare Part B is the trigger here. Then you have to go through medical underwriting and you may not pass.

Stephanie McCullough: (31:48)

Oh, ho.

Susan Sloan: (31:49)

Medical underwriting has gotten stricter and stricter and stricter for lots of different reasons. I’ve had people denied for as little as toe fungus.

Stephanie McCullough: (32:02)

That sounds like a joke.

Susan Sloan: (32:04)

Or going to see a chiropractor too often.

Stephanie McCullough: (32:06)

Oh yeah, they don’t like chiropractors.

Susan Sloan: (32:10)

Yeah. You can go as long as it’s two or less times a month. You can go, but otherwise, the insurance company looks at it that you’re under treatment. If it’s more than twice a month, then they’re thinking you’re under treatment for something. And very often, they’re thinking it’s a back issue. And insurance companies will run as fast as they can away from you if they think there’s a back issue. And they have the ability. If they don’t have the ability, when you initially go on Medicare or if you’re in one of those rare guaranteed issue situations, then they can’t. All they can do is say hi, welcome. But most of the time, if you’re going through underwriting and you have health issues, the insurance company… And I don’t mean high blood pressure or cholesterol or even like type 2 diabetes that’s well under control. Not things that are under control. But if you are currently being treated because there’s problems, no, you’re not passing medical underwriting.

Susan Sloan: (33:08)

Then, with Medicare Advantage plans… To answer your question, Kevin. Medicare Advantage plans, there’s no medical underwriting but you do need to realize that there is only a time window of between October 15th and December 7th to make a change. Now, some years in the last couple of years, if you are on a Medicare Advantage plan currently, as of January 1st, any changes made between October 15th and December 7th your benefits will begin on January 1st, not before. On January 1st, if you are currently in a Medicare Advantage plan, the last couple of years they have had another Medicare open enrollment, where someone on a Medicare Advantage plan can still make one switch either back to Original Medicare to get onto a Supplement, or to just stay with Original Medicare only, or they can go to one other Medicare Advantage plan. One switch. If you’ve used that one switch in January and you decide no, I want to go back in March to the other one, nope, not happening until the following year when you make the changes between October 15th and December 7th.

Susan Sloan: (34:30)

Medicare Advantage plans typically have both, with only a few exceptions, Medicare Advantage plans typically have both your medical and your prescription combined. Whereas if you have Original Medicare only or Original Medicare and a Supplement, you have to buy a Medicare Supplement and a prescription, a standalone prescription drug plan. Medicare Advantage plans have both. Those benefits that you have, say currently this year, can change entirely next year. The plan can go away. The premiums can go down or can go up.

Stephanie McCullough: (35:07)

Under the Advantage plans.

Susan Sloan: (35:09)

Yeah, under the Advantage plans. The benefits can go up or down. They change from year to year. And those extras, the gym membership, the dental, the routine vision, the routine hearing that many Medicare Advantage plans, not all but many offer, those are not guaranteed benefits. Those can go away every year. What is guaranteed under Medicare is your medical benefits. A Medicare Advantage plan only has to be as good as Original Medicare without a Supplement, just Medicare Part A and B. You really have to look at everything with an Advantage plan and make decisions not only based on your health and what your family’s health is, you want to look at health history. You also want to look at, as I said before, travel plans. What are you planning to do, because it’s not guaranteed that you can switch from one to the other all the time.

Stephanie McCullough: (36:18)

So, what if I’m heading towards 65 and retirement and I have health issues?

Susan Sloan: (36:25)

That’s where we sit and talk about it a lot. What kind of health issues do you have? Are they chronic? Again, you really want to take a look because you’re not… Down the line, a lot of people are under the impression I’ll go with a Medicare Advantage plan while my health is good. And if I’m 80 or 85 and all of a sudden that goes downhill, I’ll switch to a Supplement.

Stephanie McCullough: (36:48)

I’ve heard that before.

Susan Sloan: (36:50)

You won’t switch to a Supplement because once you start having health issues, and as I said, as little as something like toe fungus that you’re currently being treated for, you can be denied by an insurer. You can’t look at it that way. Unfortunately, when you’re going on Medicare, you have to think ahead. It’s not that the Advantage plans are bad. They are right for some people. And it’s not that the Medicare Supplements are bad or good. There’s different things. You also have to look at Supplements are going to be pricier. They’re going to, in most cases, be anywhere from $80, $85 at the low end for most of them, or at least most of the typically sold ones. As you age, Medicare Supplements go up. They can crest over $200, $300. But remember, you can always go from a Medicare Supplement to a Medicare Advantage plan if the premiums get too high.

Stephanie McCullough: (37:51)

But not the other way around.

Susan Sloan: (37:54)

Not the other way around, no. Medicare Advantage plans have no medical underwriting, Medicare Supplements do. And I generally say let’s take a look at your overall health. You really have to look at the whole picture, and you really do have to project into the future. So think about other members of your family, what’s typically happened with your parents, your grandparents, your brothers and sisters. What has typically been happening, because you may be healthy today but look down the line a little bit more, you know, you’ll go on through things. Those are really important issues. I did want to talk about Medicare Part D as well.

Stephanie McCullough: (38:35)

Yes, please.

Susan Sloan: (38:36)

Part D is the prescription drug plans. Medicare does not sell prescription drug plans. You can’t buy a Medicare prescription drug plan for Medicare. Medicare contracts with independent insurers, they’re all medical insurers, to offer prescription drugs. You can get prescription drug coverage with Medicare Part A only. You do not have to have Medicare Part B, or you can have Medicare Part B only and not A, but chances are you won’t have that. But if you would have a Medicare prescription drug plan, be careful. If you buy a Medicare prescription drug plan, you have Part A, you buy Medicare prescription drug plan, that’s going to knock out your group insurance. So be careful about that. Don’t sign up for Part A. There’s warnings on Medicare that be careful if you’re signing up with Medicare Part A. It could affect not 100%, but it could affect your group insurance so that’s a real issue. You don’t buy a standalone prescription drug plan if you have Medicare, if you take the Medicare Advantage.

Stephanie McCullough: (39:42)

Because?

Kevin Gaines: (39:42)

Because it’s already included.

Susan Sloan: (39:45)

Typically, it’s already included. The only time that you would buy it with a Medicare Advantage plan is if you have a Medicare Savings Account plan, and those are hardly ever sold anymore, or a cost plan, or some private fee for service plans but virtually all of that’s going away. If you take a Medicare Advantage plan, you have to take the prescription drug plan that is included with it. Standalone Medicare prescription drug plans are typically for people who have Original Medicare only or Original Medicare and a Supplement, because the Supplements since January 1st, 2006 cannot have a prescription drug plan built in at all. And so they are separate. Now, even if you have a Medicare Advantage plan, unlike the under 65 plans and employer health where the cost of your prescriptions help satisfy your deductible and out of pocket maximum. Not on Medicare, it doesn’t, even though it appears to all be part of the same thing.

Susan Sloan: (40:50)

Under a Medicare Advantage plan, the cost of your prescriptions is not satisfying your out-of-pocket maximum on your Medicare Advantage plan. It is separate. The Medicare Advantage plans, the prescription drug under those plans, as well as standalone prescription drug plans are separate entities. And they’re set up exactly the same, they follow Medicare’s guidelines. Medicare sets up the framework and the insurance companies fill in the copays and the deductibles and what drugs are going to be covered. In other words, a formulary. What drugs they cover and at what tiers they cover those drugs.

Stephanie McCullough: (41:30)

This is some complex stuff, Sue. We so appreciate your spending some time to bring us into light. We could go on for more hours and hours, I’m sure, but we’re not going to because we promise our listeners that we won’t do that to them. Kevin, do you have any last questions for Sue?

Kevin Gaines: (41:45)

No, I just have a blanket apology to all our listeners, yet again, that we have introduced a subject that on the surface sounds like “Hey, how complicated can it be?” And you now probably have more questions than when you started listening. I know we’ve done that with Social Security. We’ve done that with IRAs, et cetera, et cetera. Well, one more to the list. On the plus side, now you have more reasons to keep listening to us as we delve into these subjects more and more and deeper and deeper.

Susan Sloan: (42:15)

I just want to mention, and this is true for lots of different areas that you talked about, it costs you nothing to use an agent. Someone like me costs you absolutely nothing. We’re paid by the insurance companies that we represent. I represent, basically, all of them that are available in Pennsylvania. It costs you nothing to use us, and we can help you avoid some of the pitfalls because trying to do it on your own, you may think you understand everything. I’m honest with people all the time. People will ask me about a question with Social Security or Medicaid and how that works together. And I’m very honest with them and I will say, “Let me call somebody. Let me check.” Even if I think I know the answer, I will never rely on myself knowing everything. I always call others to just verify if there’s any question at all in my head about benefits.

Stephanie McCullough: (43:13)

So, you can help folks in Pennsylvania, Sue.

Susan Sloan: (43:16)

Yeah, I can in other states, but I really like to work with people in Pennsylvania. I know the doctors networks, the hospital networks. That is really important to make sure that you’re going with the plan that will work the best for the providers that you use, the doctors and hospitals that you use. And as you may be aware, a lot of hospitals are owned by insurance chains, or insurance companies very often have a stake in various hospitals and what insurances they participate with and don’t participate with. I’ll say up in the Lehigh Valley, there’s a big hospital war going on up there between the insurance companies and the hospitals. Some hospitals take some and not others of the commonly sold insurances out there. And how am I going to know what’s happening in Idaho or what’s happening in Kansas? I know this area, and I’m trying to give you the best that I can. I am licensed in other states, but I typically don’t do a whole lot with them.

Stephanie McCullough: (44:25)

So then, my next question is, how can Pennsylvania listeners find more information about you and how can other state listeners find someone like you local to them?

Susan Sloan: (44:35)

Well, as I said I can work with other people in other states. If I don’t feel comfortable with representing them, then I’m going to send them to… I have a network of people behind me who work in other states, literally in those states.

Stephanie McCullough: (44:51)

Got it.

Susan Sloan: (44:51)

So, you are not going to be sold things that won’t work for you. And then I also have a website realhealthquotes.com. And again, it’s realhealthquotes.com all run together, where I do a lot of videos, I do talk a lot about these things, so you can kind of get an idea of who I am and what I’m focusing on. And then I also am available by phone. You’ll see my videos, I have a YouTube channel. There’s lots of different ways you can get in touch with me, or you can give me a call.

Stephanie McCullough: (45:25)

We’ll be sure to link all that information in our show notes so people can find it.

Stephanie McCullough: (45:29)

Thanks so much for being with us, Sue. We appreciate your time.

Susan Sloan: (45:32)

Thank you. I appreciate this. Thank you for letting me share.

Susan Sloan: (45:36)

Most people, once they get on Medicare, really love it. I very rarely have problems with people with Medicare, and very rarely do I ever have claims issues. It’s a nice thing to be on.

Stephanie McCullough: (45:46)

That’s good to know.

Kevin Gaines: (45:48)

That’s good to hear. Positive note. End on a positive note, there we go.

Kevin Gaines: (45:55)

All right, that was a lot. There’s still a lot to unpack, and I know a few people are going to want to listen to this three or four times and quite frankly, so am I.

Stephanie McCullough: (46:07)

Me too.

Kevin Gaines: (46:08)

So, I need to confess I did the old lawyer trick on at least one of these questions which is you don’t ask a question you don’t already know the answer to is what they teach trial lawyers. When I was asking Sue about open enrollment and everything, because, as I mentioned earlier, Sue and I, every week we are part of a group that has lunch. And from October to December, we don’t see Sue. She is overwhelmed during the open enrollment period for the Medicare Advantage, that it’s just 12-hour days that I know she is just going full bore on.

Stephanie McCullough: (46:43)

Well, what I really appreciate about Sue’s approach is that she truly is an advocate for her clients and you can tell that she’s passionate about educating people about this system. I love that she’s got some videos out there. We’ll definitely link to those. But I love that her whole approach, much like we say all the time, is go out and ask the questions. Don’t make assumptions. Don’t assume that what your neighbor or your cousin or heck, your spouse, whatever they did, is going to be right for you. You have to ask the questions. Get on the phone and talk to your insurance company. Ask your doctors if things are going to be covered. And like she said, it’s probably good to find an agent, find an expert, and ask them to help you walk through it because they know all the ins and outs.

Kevin Gaines: (47:25)

At the end of the day, not only are we talking about insurance, which we know can be a nightmare to navigate. Not only are we talking about a federal program, which we know can be a nightmare to navigate. We’re talking about federal program insurance, so it’s almost exponential in the complexities that are involved.

Stephanie McCullough: (47:47)

It’s absolutely true. The other big takeaway for me is this idea of taking the long-term view. Thinking ahead not just to your health situation and where you’re living, heck, today, but what it might look like long term because with some of these plans you do have to go through underwriting which is fancy insurance speak for “We’re not going to insure you if you’re not healthy.” So I really wasn’t aware of that piece of it. It is important and as we pointed out, surprises in retirement especially around money and the government are usually not a good thing.

Kevin Gaines: (48:22)

And we do like to talk about how all this stuff is interconnected. Think back to, not so much on the Medigap plans where you’re just kind of, not that you’re locked in, but it’s a fairly uniform thing. But the Medicare Advantage programs because there’s so many different options and benefits, and you’re allowed to switch, at least annually. If you know you have stuff coming up, you’re going to take two years to drive and explore the country, you might want to look at having a slightly different plan to cover a very specific thing or more realistically, you know you’re going to be spending part of the year in Florida or you’re going to be visiting grandchildren or… These things fit together, they interconnect.

Stephanie McCullough: (49:08)

Right, the geography is important to keep in mind.

Kevin Gaines: (49:12)

Yeah.

Stephanie McCullough: (49:12)

All right. Well, we’ve kept you. We’ve been in your ear a long time today, so I think we’re going to wrap it up there. Thanks so much for being with us. We’ll talk to you next time. It’s goodbye from me.

Kevin Gaines: (49:21)

And it’s goodbye from her.

Stephanie McCullough: (49:24)

Be sure to subscribe to the show and please share it with your friends. Show notes and more information available at takebackretirement.com. Huge thanks for the original music by the one and only, Raymond Loewy through New Math in New York. See you next time.

Disclaimer: (49:39)

Investment advice offered through Private Advisor Group LLC, a registered investment advisor. Private Advisor Group, American Financial Management Group, and Sofia Financial are separate entities. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual security. To determine which investments may be appropriate for you, consult your financial advisor prior to investing. This information is not intended to be substitute for individualized tax advice. Please consult your tax advisor regarding your specific situation.