Sep 2017
28

What Do I Need to Know About Medicare?

By Joe Day
September 28, 2017

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(Credit for this post goes to Rehberg Law Group. More information about Rehberg Law Group can be found at the bottom of this page.)

“How can I clear up the confusion surrounding Medicare for myself or my parent(s)?”  If that is your concern and with open enrollment right around the corner, retirees will be inundated with advertisements regarding their insurance options.  This information can be conflicting and confusing.  For many retirees, just maintaining the status quo seems attractive.  This article will explain the basics behind Medicare insurance options, identify some of the key differences to consider, and where to go to get further guidance.

In the King, Pierce, Snohomish and Thurston counties, retirees’ over the age of 65[1] have two basic options: Traditional Medicare or a Med-Advantage plan.

TRADITIONAL MEDICARE

Traditional Medicare is the insurance plan offered through the federal government and includes a Part A and Part B component.  Medicare Part D is the prescription drug coverage.  Medicare supplemental insurance, such as Plans E, G, and F, are the plans which assist in covering the costs left uncovered by Part A and Part B.

Part A is limited to hospital bed coverage only and applies to most people who have some work history, Part A coverage will not cost anything.  Part B covers physicians and out-patient visits.  The cost of Part B will depend on your income, but for most retirees’, Part B currently costs $134 a month.  Part B also provides for 80% of the medical costs.  Drug coverage is provided for in Part D, and depending on the type of plan, the monthly premiums range from $20 to $80 a month.  The monthly premiums for the supplemental plans, such as Plan E, G, or F varies greatly based on the deductible amounts, co-pay options, and coverage amounts.  The purpose of the supplemental plans is to assist in covering the costs of the 20% uncovered by Part B, as well as deductibles and co-pays.  Plan F provides for the greatest amount of coverage, and will cover all of the 20% (that is not covered by Part B) as well as the majority of co-pays and deductibles.  In 2017, the highest monthly premiums for Plan F are around $250 a month.

MED-ADVANTAGE

Med-Advantage plans are insurance plans provided by private insurance companies.  Med-Advantage plans (sometimes referred to as Medicare Part C) are required to provide the same coverage as Traditional Medicare Part A and B; however many of the Med-Advantage plans also provide additional benefits, such as prescription drug coverage, and dental, vision, and health programs.  There are a number of providers in our area, including Group Health, Regence, United Health Care, Sound Path, Humana, Healthnet, Premera/Blue Cross, Amerigroup, Providence, Aetna, and Asuris.  The monthly premiums for these plans can vary greatly, depending on your co-pays, deductibles, drug coverage, whether it is an open or closed HMO, and any extra benefits.

SO WHICH PLAN SHOULD YOU ENROLL IN?
There are a few key differences between Traditional Medicare and Med-Advantage plans.  One, you must reside in a county that has Med-Advantage plans available, which tend to be larger, metropolitan communities.  If you reside in a more rural or less populated area of Washington, you may only have Traditional Medicare with a Supplement Plan and Part D for your drug coverage.  If you are a snowbird and have severe health issues, such that you need a designated set of physicians in both Washington and your snowbird state, Traditional Medicare is likely a better fit.  If you are relatively healthy, with nominal prescription drug needs, or you only see your physicians on an annual basis, a Med-Advantage plan would likely be a better fit.  The majority of Medicare eligible residents in the King, Pierce, Snohomish, and Thurston counties are enrolled in a Med-Advantage plan.  This is because for many retirees, the cost savings for enrolling in a Med-Advantage plan are huge.  In King County, there is a Med-Advantage plan with a zero premium![2] How is this possible?  Bob Mitzel, an insurance specialist with United HealthCare explains: “Many people do not realize that when someone enrolls in a Med-Advantage plan, Medicare actually contributes between $8,000 and $10,000 a year to the Med-Advantage plan. Medicare has discovered that it is less expensive and more efficient to pay this amount out to the private insurance providers who will provide coverage to the individual than having to provide the coverage under Traditional Medicare.”

As October draws near, insurance specialists from all of the different Med-Advantage plans providers will be offering seminars.  Again, Bob Mitzel, “In choosing a plan it is important to talk to an insurance specialist who [educates you about] your options; if you participate in an insurance seminar which is pushing a single product, walk away!  I have seen so many people in the wrong plan, paying way too much and when asked, they say that their neighbor, employer, friend, told them to enroll!  It is important to get the facts on the different options and have a professional provide you guidance [based] on your personal situation.”

[1] If you receive SSDI and are eligible prior to age 65 for Medicare, you are only able to enroll in Traditional Medicare with a prescription drug plan and a supplement plan.  Med-Advantage plans are not available to you until you reach the age of 65.

[2] Please note that though these plans have a zero premium, the insured is still required to pay the monthly costs of Medicare Part B, approximately $134 per month.

If you want more information about Medicare or a referral to an insurance specialist, please call Rehberg Law Group at (206) 246-8772. You can find more information about Rehberg Law Group at www.rehberglaw.com.

This entry was posted on Thursday, September 28th, 2017 at 09:28 am and is filed under BlogPlanning Perspectives. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

 

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bio3Joe Day, CFA is the Founder of Bear Mountain Capital. Joe started the company after spending many years advising high net worth clients with a leading global wealth management firm. Joe earned the right to use the CFA designation from the CFA Institute in 2011. He also holds a degree in Business Administration, with a Major in Finance from Gonzaga University.

Luke Collova is an Investment Advisor Representative for Bear Mountain Capital focusing on planning, investment strategy, client development and operational support. Luke’s prior career included providing commercial insurance coverage for a global insurance firm. Luke maintains his Series 65 license and holds a degree in Business Administration, with an emphasis on Finance and International Business from the University of Puget Sound.