Bob Hoffmaster: It’s now time for Insurance Smart with GOEBEL Insurance and Financial. Call now with your questions at 923-1450, 888-900-1450 for Insurance Smart with GOEBEL Insurance and Financial.
Jerry St. John: And just as easy as that, we are back, and the lines are open, 923-1450, 1-888-900-1450. Bree and Larry are here, and they are going to continue with their discussion of today’s topic.
Bree: All right. So I’m going to… Oop, go ahead, Larry.
Larry: Nope, go ahead. Ladies first.
Bree: So I’m going to go over the difference of Medicare Su-
Jerry St. John: I’m glad you wore a name tag.
Bree: Yeah, right.
Larry: That’s for me.
Jerry St. John: You got purple. You wore your own name tag.
Larry: When you get to be my age, it’s…
Jerry St. John: And Cathy has something she wants you to address.
Larry: Oh, we’re just going to jump right in there, huh?
Jerry St. John: Yeah.
Larry: Well, good morning, everybody. I’m Larry Goebel, president and owner of GOEBEL Insurance and Financial and-
Jerry St. John: You know what the only problem with that is?
Larry: What?
Jerry St. John: You have nowhere to go anymore. You’re up there. There’s no upward mobility.
Larry: Yeah, there is.
Jerry St. John: Oh, there is?
Larry: Oh, most definitely.
Jerry St. John: Retirement?
Larry: You bet.
Jerry St. John: Okay.
Larry: But also, we have Bree Gens, who is one of our personal health insurance advisors.
Jerry St. John: Good to see you again, Bree.
Bree: Yes. I’m glad to be back.
Larry: Yep. Bree hasn’t been on, but she will be… In the next 10 weeks, for the listeners, we’re doing a new format, and we’re going to an hour-long show, which allows us to cover the topics. And if you go to our website at goebelins.com, the listeners right now, especially on this snowy day… I think people are going to hole up today. If you want to go to our website, goebelins.com, that’s G-O-E-B-E-L-I-N-S.com and on the top banner… First off, there are seminars. Registration will pop up. Just exit out in the top right corner. But then in the top banner, you’ll see KFIZ Insurance Smart. If you click on that, you’ll go right to our topics for each week. Today’s topic is Medicare Supplements and Medicare Advantage plans, what are the differences?
Larry: So when you go to our website, you click on the top banner, KFIZ Insurance Smart. When you click on that, it’ll show all of the different topics. And then under today’s topic, the Medicare Supplement and Advantage, there are two tabs. It says Medicare ABCs, and then Medicare Supplement versus Medicare Advantage. So you can follow along as we’re talking on the air. And maybe you don’t have time. Maybe you don’t have access to a computer right now. But during the week or later on today, when you want, you can go right back and you go, “Ah, now… ” Okay? You can follow right while we talk.
Larry: I’m a sight person. I like to see things. I like to hear things, and I also like to read. So for the listeners that like… Obviously, this is one sense, is the sense of hearing. But if you also like to read, so we put that on there. But-
Jerry St. John: What about guys like me with no sense?
Larry: Well, we won’t go there, Jerry.
Jerry St. John: Okay.
Larry: Okay. All right. But anyway, a shout out. One of our other personal health insurance advisors, Cathy Reines Steffes, her husband Tony just had a birthday, in fact, yesterday. So a big happy birthday to Tony Steffes. And Jerry, I think you’ve got a little help. There we go.
Speaker 4: (Singing).
Jerry St. John: There. Now we celebrated for Tony.
Larry: Yes. So, Tony lives out in Armstrong, Tony and Cathy. He’s with Steffes Construction, so I know a lot of people know him. So when you see him this week, wish him a big happy birthday.
Jerry St. John: And I would venture a guess they were dancing a nine-second polka.
Larry: I wouldn’t doubt it.
Bree: I’m sure.
Larry: Yeah, they’re pretty active.
Jerry St. John: Yeah.
Larry: Oh, yeah. Yeah.
Jerry St. John: No question.
Larry: Yes, definitely.
Jerry St. John: They probably spilled their cup of coffee, but hey.
Larry: Yeah, that’s probably true.
Jerry St. John: It is what it is. So today we’ve got some really, really interesting topics because so many people have questions of what is this versus that, what is this versus that? What’s covered here? What’s covered there? There’s so much misinformation.
Larry: Most definitely, most definitely. People because they hear it… A lot of times people hear it secondhand. They hear it from their neighbor, their co-worker. And every time we have a conversation with somebody, would you agree, Bree, they always tell us something that isn’t true, or they’ll say something, and it’s like, “No, that’s not how it works.”
Bree: If they come in having had done research ahead of time and the research has come from people that they know, a lot of times they hear something that is based on the one person. We do get a lot of clients that are just coming in just blank wanting information in general, and that’s always… Then we provide all the information. They’re a little less misinformed.
Jerry St. John: I think you’re probably better off with the uninformed than the ill-informed…
Bree: Right.
Jerry St. John: … because of primacy. What you learn first, you learn best and retain longest. If they learn the wrong thing first, it’s going to be hard to change their mind into what actually is.
Larry: As a matter of fact, we just had a listener. A KFIZ listener came in. Her husband has a supplement. She’s going to be coming off her group, so she thought, “Well, I’m just going to do a supplement. I’ve been told that you shouldn’t do an Advantage plan.” “Okay. Tell me a little bit about that.” So she told me a few things, and she told me three or four things that were not true, and I said, “Let’s go through this.”
Larry: So what we’re going to do this morning is we’re going to go through it, exactly what the differences are because that’s our role, is to educate people. Bree, Cathy, and myself, we don’t care what the client takes. That’s their decision. But what we do care is educating them, giving them good information so that they can make a good, informed decision. That’s the key. Make a good, informed decision based on your needs, because your neighbor, your co-worker, your cousin, what they have might suit them, and I say the word again might, but more oftentimes than not everybody’s… It’s always the case, you have a different situation.
Jerry St. John: Well, the source could have been based on some misinformation.
Larry: Correct. Correct.
Jerry St. John: It could have been a snowball effect.
Larry: Correct.
Bree: Yeah. And it’s also just remembering how much of your situation do you share with your friend? Their friend is giving you advice based on part of the story, because I’m sure there are parts of your situation that you’re not sharing with them. So they’re giving you advice without all the information.
Jerry St. John: Mm-hmm (affirmative).
Larry: And we tend to get… That’s what our role is, to get as much information and that, so we can help you make a good decision.
Jerry St. John: And having done it, it is an interesting process.
Larry: Yes.
Jerry St. John: For the person like me coming in there, it’s really an interesting process on how much stuff that really can affect what the ultimate determination is going to be.
Larry: Well, when we met with you and your wife this past fall, we did a little more education, and then I saw the light bulbs go off. You went, “Oh, uh-huh (affirmative). Oh, that makes sense.” So that’s what we’re going to do. One thing, listeners. We’re going to the hour-long format because… for a couple of reasons. Number one, it gives us more time to get into depth. But if you have questions, please give us a call at 923-1450. And what’s the 800 number?
Jerry St. John: 1-888-900-1450. That’s toll-free.
Larry: Okay, because what we’re going to do is… And this is a 10-week program. Anybody who calls in, we’re going to put you in a registration for two Packer tickets, Green Bay Packer tickets for the 2020 season. So, let’s get right down to it. So on the website, the goebelins, if you click on the KFIZ Insurance Smart, and you go to today’s topic, you’ll see Medicare ABCs. There’s a little… It’s highlighted. So the first thing is, we call it the alphabet soup, the Medicare alphabet soup, because people get so confused on what does A to B to C and all that.
Larry: So part A, as in apple, is for hospital. That is free as long as you have 40 quarters. There’s some stipulations. But for 99.99% it’s free. Okay? So A is for hospital. B, as in boy, is for doctor and outpatient. Now B, there’s a premium for, and it’s $144.60 a month starting January. It just went up. Okay? Now, that is if your modified adjusted gross income, or your MAGI, is less than $85,000 if you’re filing single, less than $170,000 if married filing jointly. So for 95% of Americans, that will be their… That’s their base premium. That will be their only premium. If a listener has income over that, then there’s what they call IRMAA, Income-Related Monthly Adjustment Amount, that they have to pay in addition to that $144.60. Okay? So part A, part B. Then there’s part D, as in drugs.
Jerry St. John: At least one of the parts matches what it references.
Larry: Right, yeah. A is hospital. B is doctor, and D is drugs.
Jerry St. John: Whatever happened to C?
Larry: We’ll talk about that.
Jerry St. John: Okay.
Larry: Ah, see, he’s listening. I tell you what, bright guy. But D is for drugs.
Jerry St. John: Don’t spread that rumor.
Larry: Yeah. Now, when you turn 65, you have to have a drug plan even if you’re not on any medications. Okay? If you do not take a drug plan when you turn 65, then you can get a penalty. It’s called an LEP, a Late Enrollment Penalty. And that penalty will stick with you for as long as you live. So it’s critical. There’s a lot of people that turn 65, and they don’t even get a drug plan because, well, I’m not on any meds. And all of a sudden, they go on a drug plan because they get an expensive med, and next thing you know, there’s an extra charge. And they’re like, “What’s this?” Oh, that’s your late enrollment penalty. So we are very… We make sure that we educate people.
Larry: Now, there is an alternative to getting a drug plan, and that is SeniorCare. Seniorcare is through the state of Wisconsin. It costs $30 a year total per person, 30 bucks a year. And what it does is it helps the member avoid the penalty. So if you’re 65, you’re not on any medications, but you don’t want to incur the penalty… Excuse me. It’s that time of the year.
Jerry St. John: Yeah, I know.
Larry: We can help you enroll in SeniorCare. Now, some people think, “Well, I heard SeniorCare, you have to be low income to qualify for SeniorCare.” That’s not true. You can make any amount and qualify for SeniorCare. But if you earn higher, if you have a higher income, what’ll happen is you’ll have a very high deductible. For instance, I think the cutoff for married people, I think, is $38,000, so if you’re two people married. So if your income is over 38, for every dollar you’re over that, that becomes your deductible. So if your income is $48,000, you then have a $10,000 deductible. Well, a $10,000 deductible isn’t going to cover you for your drugs. But remember, you’re not on any medications. So therefore, the only reason we put people in SeniorCare is to avoid the penalty.
Larry: Now, what if… Let’s say you turn 65 April 1st. We put you on SeniorCare, and let’s say May 15th that you go to the doctor, and he says you need to go on Eliquis or some very expensive drug. You’re going to want a drug plan then, because SeniorCare you’re going to have a high deductible. So we can put you… You call our office, and Bree or Cathy or myself will do a drug formulary, and we can put you on a part D plan effective the first of the month following the month we’re in. So if that happens to be May 15th, we can put you on a drug plan June 1st, guaranteed issued, no health questions asked, and you do not have to wait for open enrollment. So it’s a great planning strategy that will help people. We have some people that they just go on a drug plan. Well, why pay 200 bucks a year if you can pay 30 bucks a year and avoid the penalty? So great strategy.
Larry: Now, the first thing that we do when we do our Medicare review is we ask what a person’s drugs are. That’s very, very important because that is a determining factor of where we might go. In fact, yesterday we had one where it was very… The Medicare Advantage plan covered the person’s drugs, covered all of their drugs. None of the part D plans covered all of their drugs. So we’re kind of leaning… I’m just telling them that if you want all your drugs covered, this is the route you might want to go.
Larry: So sometimes it’s very obvious, very obvious, when we do a drug formulary. What a drug formulary is is we get your medications, and what we need to know is all the information. We get the name on the bottle, the dosage, 10 milligrams two times a day, that you take it every day, every other day, whatever. Are you doing just PRN? PRN is as needed. Like, with inhalers, sometimes people have very expensive inhalers, but they only maybe go through one inhaler every three months. That’s big information that we ask. So when we do a drug formulary, if people or if listeners want us to help them with that, it’s important we get all the information on your medications because that can mean a huge difference in which plan you should go with. Huge. So we have A. We’ve got B. We’ve got D. And what did we miss? C.
Jerry St. John: I think C.
Larry: The big C. What a C is is a Medicare Advantage plan.
Jerry St. John: Oh.
Larry: You actually have a C right now. You are a C. Well, you’re A in my book, Jerry, but…
Jerry St. John: You work with that, huh?
Bree: Right.
Jerry St. John: It must really get deep there.
Bree: Oh, yeah. Yeah.
Larry: Oh, yeah. Note to self: Don’t bring in other staff. Okay, but… And you’re not helping, Jerry. So what a part C is is a Medicare Advantage plan. And most of them, probably 99% of them, cover A, B, and D.
Jerry St. John: Which is… That was foreign to me. When we first had our first meeting, I absolutely had no clue.
Larry: Correct. Correct. You’re not the only one. People are like, “Okay, what A, B… What are all of them?” That’s why we call it the Medicare alphabet soup. Okay? But A is hospital. B is doctor. D is drugs. But with a part C or a Medicare Advantage plan, it combines all three of those. So one policy, one card covers your doctor, your medical, and your drugs. And a lot of times, Medicare Advantage plans also cover dental, vision. So it’s a very comprehensive plan. Okay?
Larry: We talked about SeniorCare. Then, we have, of course, open enrollments. Some of the listeners might be saying, “Well, we’re past the open enrollment, so why are you talking about this stuff right now?” Well, for two reasons. First off, people are aging in. What do we mean by aging in? They’re turning 65.
Jerry St. John: Yeah. People don’t always wait till October.
Larry: No. No. They don’t wait till October to turn 65. So anybody turning 65 this year, if you’re turning 65 in April, May, well, March… We have people call us, kind of wait till the last minute. So those are the people that need to make these decisions. The other thing is this is a process. It’s a learning process. So we have a lot of people that might be on a plan. Maybe they’re on a Med Sup. They keep hearing about Medicare Advantage plans. They don’t know enough about them. And people are very fearful of change. So this is an opportunity to educate yourself. Going to our website, coming to our seminars, that’s all about education. That’s what we’re all about, is educating so you can make a good decision.
Larry: But Medicare open enrollment obviously is in the fall, but right now people can choose their Medicare plan based on when they turn 65. And the other thing is obviously if you leave group coverage. Let’s say you retire, and you leave your group. You then qualify for what’s called a special enrollment, and then you can go on a Medicare Advantage plan.
Jerry St. John: So actually, even though they have the quote-unquote open enrollment period, people can enroll and do enroll throughout the course of the year because of aging in or retirement.
Larry: Correct, exactly.
Bree: The open enrollment works well if you’re already on a Medicare Advantage and you want to switch through… Like, you want to switch because maybe you weren’t satisfied this year or something has changed. You can switch from Medicare Advantage plan to Medicare Advantage plan during the open enrollment period.
Larry: Or if your drugs change. If your medications change and we do a new formulary, it might predicate changing plans or drug plans if somebody’s on a drug plan. We had one person change this year. It saved him 1000 bucks by changing drug plans.
Jerry St. John: How soon before somebody hits 65 should they be visiting with you to get some information?
Larry: I would say… Well, when you can enroll is… Let’s say your birthday is May 1st or May 15th, okay, May 15th. You can enroll three months prior. So February, March, and April is when you can enroll in a plan. But we suggest probably even before that to start the process to learn about what you need to do because the other things that come into it, which Cathy will cover next week, is when do we enroll, and how do you enroll in Medicare? She’ll go over the different rules. There’s different scenarios.
Bree: And he’s referring to Medicare part A and part B.
Larry: Yeah, part A and B.
Bree: Not into a Medicare Advantage or Supplement.
Jerry St. John: Okay.
Larry: Correct. Good call. That’s what I have you here for. Yeah. So she’s going to cover that. But the earlier the better, because I have a person, they need coverage February 1st. What is it? January 17th?
Jerry St. John: Mm-hmm (affirmative).
Larry: She’s still not enrolled in part A and B.
Jerry St. John: Getting close.
Larry: Yeah. So we have to put her… I said, “The first thing, you have to be A and B.” And she was not collecting Social Security, so that’s a big rush. So, that’s my Medicare ABCs. Now what we’re going to do is I’m going to have… We’ll just start the process because at 8:00, we have to go to a news break. But I’m going to have Bree, I should say, talk about the differences between a Med Sup…
Bree: Do you want to do the seminars, and I can just go over it after the break?
Larry: Yeah, sure. Why don’t we do that? That’s a good idea.
Jerry St. John: Sounds like a plan.
Larry: Yeah. Yeah. Why don’t we do that?
Jerry St. John: You’ve got seminars next week.
Larry: Yeah, we do. We’re back in the fold. And for the listeners, every third Tuesday, every third Tuesday we’ve resumed our seminar schedule, and they’re all at the Fond du Lac Senior Center right here in Fond du Lac at 151 East 1st Street. And next week Tuesday, we have two of them, one at 3:30 PM and one at 6:00 PM. These are free seminars. We’re going to go over… In fact, some of the same information we talk about today, we’re going to talk about then. And if people want to register for the seminar, let’s say they’re turning 65, they’re going to be turning 65, thinking about retiring, those are the people that need to come to the seminar.
Larry: Also, we do one on Obamacare too. Let’s say they’re thinking of retiring. They’re 63, and they don’t know what health insurance is going to cost. Many times we could get two 63-year-olds that retire, we can get health insurance where they pay no premium. So, very critical. So, anybody thinking of retiring, going to turn 65, that’s who should come to the seminar. If they want to come to our seminar, there’s two ways to register. They can go to our website at goebelins.com. That’s G-O-E-B-E-L-I-N-S.com, or they can call us at 921-7526. That’s 921-7526.
Larry: Another thing is right on our website, if you go… Let’s just go to our website. In the lower… Way in the far bottom right, you’ll see the Facebook…or not Facebook… YouTube. And if you click on that YouTube icon, it’ll take you to, in the middle of the page, will be snippets of our seminars on the three different topics. We cover Medicare, Obamacare, and maximizing Social Security. So, on our website is a video of those different topics, so if you want to take a look.
Larry: What we find is we have a lot of listeners that do go to those, look at those seminars or look at that video, but then they end up coming to the seminar because, during the seminar, obviously we do a lot of questions and answers. So people will have questions because you’re watching the video, and if you’ve got a question, there’s no way to ask it. So it’s a great way of finding out some of the information that we share at our seminars, but then they can come to the seminar. And like I said, they’re free. But every Tuesday. And next week it’s January 21st, Tuesday, 3:30 and 6:00 PM at the Fond du Lac Senior Center.
Jerry St. John: All righty. We’re going to take a short pause for a news break, and the lines will be open for your questions on Insurance Smart on News-Talk 1450 KFIZ in Fond du Lac. So on this particular topic or anything in general, I would think you’d be happy to field the question.
Larry: Sure. Yeah, it doesn’t have to be on today’s topic. It could be last week’s was Social Security, Obamacare.
Jerry St. John: All right. KFIZ news time, 8:00. Stay with us.
Announcer: It’s now time for Insurance Smart with GOEBEL Insurance and Financial. Call now with your questions at 923-1450 or 888-900-1415 for Insurance Smart with GOEBEL Insurance and Financial.
Bree: … Medicare does not discount, you would be liable for. When you get an Explanation of Benefits for a Medicare Supplement, you get two of them. So you get one from the Medicare Supplement and then whatever… You get one from Medicare, and whatever the Medicare Supplement does not cover… Whatever Medicare does not cover, the Medicare Supplement does. So then you get one from the Medicare, and then you get one from the Medicare Supplement. For the maximum out-of-pocket on Medicare Supplements, there isn’t one. It’s zero again. And then the premium for a Medicare Supplement is usually around $2,000 a year.
Bree: Now I’m going to switch over to the Medicare Advantage side. On the Medicare Advantage side for out-of-pocket costs, there are some. So you have co-pays. So for a primary care doctor, it’ll vary from like $10 to $15. If you have a specialist, it’s going to vary. So you have these co-pays that you pay when you go into the doctor. For the explanation of benefits, or EOB, you get one. And the reason for that is back when Medicare Advantage had started, Medicare had said, “We’re going to pay you the $144.60 that you’re paying to Medicare and some other undisclosed amount. Private insurance company, we’re going to pay you to process the claims, and then we’re not going to have to handle it anymore.” So they are paying that on your behalf.
Bree: For the maximum out-of-pocket for a Medicare Advantage plan, you have one as well. It varies from $3,600 to maybe $5,900. It depends on the company, and it depends on which plan you decide as well. And then for a premium, but it is not going to be as high. It’s going to be lower. For a Medicare Supplement, it’ll be about $2,000 a year. For a Medicare Advantage, it can be around zero. It can go up to $50. It depends again on the plan that you choose.
Bree: So when you’re looking at the difference between the Medicare Supplement and the Medicare Advantage, you’re kind of looking at like the risk analysis of it. For a Medicare Supplement, you’re paying advanced in premium about $2,000 a year, where a Medicare Advantage you’re paying as you go. So if you look at the Medicare premium for the supplement being $2,000 and let’s say out of the range of out-of-pocket maximums for the Medicare Advantage being about $3,600, it’s kind of in between the lowest and the highest, you’re risking, if you take a Medicare Advantage, about $1,600. That is, if you hit that out-of-pocket maximum and you took an Advantage plan, you paid about $1,600 more than if you took the supplement plan.
Bree: So it depends on your situation, of course. We represent both of these for a reason, but generally if you are going to be using your insurance more, we’re going to kind of look towards the supplement plan. If you’re someone that is a little bit more healthy, you go in for your annual visit, you go in maybe if you have a cold, maybe the Advantage plan is the way that we’re going to look.
Bree: The other thing to note with Advantage versus Supplement, for an Advantage plan, generally part D is included, part D being drugs. So, that’s also something to consider. Again, we start with prescriptions, and we start with a formulary. So, we will look and see how those prescriptions are covered and do a comparison between doing a stand-alone part D plan, which is what you would have to get if you got a Medicare Supplement plan. We look at the drug comparisons versus the stand-alone part D and versus the Medicare Advantage, just to check what those costs are alone. So yeah. Do you want to add, Larry?
Larry: Well, that’s where… The biggest thing is, is people get scared that with an Advantage plan, you have co-pays. Okay? So, your annual exam, there’s no co-pay. As Bree said, you’re… Let’s say you go for your annual check. That’s no co-pay. Then you have a sinus infection, and you go to your primary care. Most of the co-pays are $10. The specialist is $50. An ER visit is 90 bucks. Where people get scared is what if I have a big one? So let’s talk about that. So let’s say you had a heart attack yesterday. Jerry, we’ll look at you. Okay. Let’s say you had a heart attack yesterday, and you’re in a hospital. It was a serious heart attack. You had surgery, da, da, da, da, complications. You’re in the hospital for 20 days. It cost a half a million dollars. Would you agree that’s a big one?
Jerry St. John: Yeah.
Larry: Yeah.
Jerry St. John: Half of that would be a big one.
Larry: Yeah, okay. So how much do you think it would cost you on a Medicare Advantage plan for that?
Jerry St. John: It sounds like, based on what Bree was saying, no more than whatever the maximum out-of-pocket.
Larry: And that’s the key.
Jerry St. John: Whatever… And she said it varies.
Larry: Exactly. Well, the max out-of-pocket is not a deductible. So that’s really critical, is people hear about these max out-of-pockets, 36, 40… One of the most common of them is about 4,500. A lot of companies have about 4,500 max out-of-pocket.
Bree: Right around there.
Larry: Yeah, right around there.
Bree: Around 42, 45.
Larry: 45, 49. In the fours. So most people think that on that big claim that, wow, we’re going to pay our 4,500 as our deductible. It won’t. It’s not a deductible. It’s a max out-of-pocket. The co-pays for each service go towards that max out-of-pocket. So on the half-a-million-dollar claim, you’re in the hospital for 20 days, on most plans, it’d probably cost you about $1,700, and that’s it.
Jerry St. John: That’s better than the 49.
Larry: You bet.
Bree: Right.
Larry: Because what it is, on an Advantage plan, there’s a co-pay for hospital stay inpatient per day. The most common is $425 a day, $400, $425, $450. So let’s say it’s $425 a day. You usually pay that for about four days, and then after that there’s no co-pay. So if you’re in the hospital for 20 days, the first four days you would pay $425 times four, which is $1,700. After that, you have no more co-pays, zero. So on that big one, that half-a-million-dollar claim, it costs you $1,700. So when people find that, they go, “Oh. Oh, I thought I’d go through that max right away.” No, you don’t. And every different co-pay is listed in the contract. An ER visit is 90 bucks. Let’s say I need shoulder surgery, okay? A $395 co-pay is a common co-pay for outpatient surgery. So if you just have one day outpatient surgery, you’d pay $395. That’s it for a shoulder surgery.
Larry: There’s a lot of people where… And we do what’s called a Medicare analysis for people that are still on their group if they’re over 65. About 85% of the time, they should not… They would be better off, it would be more appropriate, it’d save them money to be on a Medicare plan, either a Supplement or an Advantage, versus staying on the group. And the biggest reason is because when you’re in a group plan, let’s say you have a high deductible plan, let’s say you have a $5,000 deductible plan and your max out-of-pocket is maybe $6,000, if you have a shoulder surgery, you’re going to blow through that max out-of-pocket. If you go on an Advantage plan, you pay $395.
Larry: I actually had a client who had two knee surgeries. The first one he had, it cost him six grand. He was still on Medicare, still on the group over 65, and we said, “Well, let’s take a look at… Let’s do an analysis of why you need another knee surgery.” “That’s going to cost me a whole… ” We said, “No, it’s going to cost you $395.” “Really?” So the first knee surgery he had on his group cost him six grand. The second knee surgery he had, he had on Medicare, and it cost him $395.
Jerry St. John: Then he kicked himself in the other knee for not doing it sooner.
Larry: Correct. He should’ve done it sooner because… People think that I should stay in the group. So as Bree had mentioned-
Jerry St. John: That is a common misconception.
Larry: Very common. You only know what you know.
Jerry St. John: You’ve got coverage. I’m here. I’ve been here for 25, 50 years.
Larry: I’m on the group. It’s called the fear of the unknown. Really, what we do is… People are so confused about what they should do. And I’m sure the listeners are shaking their head. We hear that all the time. People come in, and they’re confused. They’re fearful. They don’t know what to do. They get done meeting with Bree or with Cathy, and they come out with smiles on their face, don’t they, Bree?
Bree: Yeah, yep.
Larry: Yeah, because she’s educated them. They’re like, “Oh my God, now I know. Now I’m armed with the information, so I can make a good decision.” So the biggest thing is out-of-pocket for a Medicare Supplement. That half-a-million-dollar claim, you’d pay nothing. People like that security.
Larry: But people kind of wonder why do Medicare Advantage plans cost so little or nothing? This is the reason why. Because as Bree had mentioned, when Medicare decided to start offering Advantage plans, that was about 20, almost 25 years ago because they said, “This takes a lot of time and effort for us to process claims,” because when you have a Medicare supplement, Medicare is primary, the supplement is secondary. So you actually have two insurance companies, and that’s why you don’t pay anything out of pocket, is because they’re coordinating their benefits. So Medicare said, “This is a lot of work. Why don’t we just contract with Network Health, United Healthcare, these private insurers.”
Larry: Now I have a question, Jerry. Do you think… And when I say contract, they’re going to pay them that $144.60. So Medicare pays these private insurers to manage the claims. Do you think these private insurers will be a little more efficient with that money that Medicare gives them than Medicare?
Jerry St. John: I think I would be more efficient.
Larry: You bet. Yeah.
Jerry St. John: I mean, it’s the government versus private, and it gets technical, and it gets confused when the government’s doing it. I’m sorry. It’s just that’s the way it is.
Larry: There’s an old saying: the proof’s in the pudding, right? Well, here’s the proof. The proof is these private insurers, like United Healthcare, Network Health, are more efficient because with a Medicare Advantage plan they cover… Remember, the C, they cover the A, the B, the D. So they cover all your doctor, your medical. They have eye coverage, for your drugs, your dental. So they can add additional services that original Medicare can’t do.
Jerry St. John: Then why hasn’t the government completely gotten out of it and just contracted everything?
Larry: That’s a good question. Because I think they want to give people choices, and I think choice is good.
Bree: There are a lot of people that take the Supplement. For health-related reasons, whatever their motivations are, there are a lot of people that do opt for the Supplement.
Larry: Yeah.
Jerry St. John: So, basically, the government has to stay in business with this so that the Supplement is available.
Bree: Right.
Larry: Yeah. We do both. It really, like you said, it doesn’t matter. But our biggest thing is to educate, because we hear people say that, “Well, I heard in Advantage plans, you can’t see your own doctor.” That’s not true. There are a lot of PPO plans, preferred provider, where you can see any doctor you want. Some might be a little higher co-pay, but it might be $5 or $10, a different co-pay to see your doctor.
Larry: There are plans in… Like, Network Health, we do a lot of business with them. They’re a PPO Medicare Advantage plan. You pay the same co-pay whether you’re in or out of network. So it does not matter. Now, that’s in Northeast Wisconsin. If you go down to their plans in the Milwaukee area, then there is a different co-pay if you go out of network. But in Fond du Lac County, Sheboygan, Dodge County, Calumet, Winnebago, the general listening area of Dodge, with their plan you pay the same whether you’re in or out of network.
Larry: So, what happens is is Medicare is paying these insurance companies to process your claims. Medicare still is the administrative boss. They determine who’s in network, out of network. They determine the reimbursement rates. They determine what’s covered, things like that. But they pay these private insurers. And it’s not any different… If you need dental work, what do you do? You pay a dentist to do something that you don’t want to do.
Jerry St. John: Right.
Larry: So the reason that these Advantage plans are very reasonable or no premium is because Medicare is paying the premium. Does that make sense?
Jerry St. John: A lot of sense.
Larry: Yeah. I like to use analogies. So let’s assume… And I’m going to… I’ll ask… Let’s ask you, Jerry. We’re going to change the topic a little bit. Where do you like to go out to eat, Jerry? And I know the answer already.
Jerry St. John: Yeah. Sebastian’s.
Larry: Sebastian’s. Yes.
Jerry St. John: Salty’s.
Larry: Yeah, okay, yeah.
Jerry St. John: We’ve got our favorites.
Larry: You’ve got your favorites. Okay. So let’s say you’re going to take Lynn out, your wife, for a nice dinner, and you go out with a couple of friends. Do you like to have a drink beforehand?
Jerry St. John: I can’t say that on the air, but the answer’s yes.
Larry: Okay. I won’t ask your drink of choice. So let’s say you go out with your wife and a couple of friends, and everybody knows what they want to eat. Everybody’s had a couple of drinks, but you’re undecided. You don’t know what you want to eat. So you’re looking at the menu. Do I want the steak tonight? Do I want the Oscar? Do I want the veal? I don’t know what I want. And so finally, Lynn gives you the big look and says, “Jerry, I am hungry. Order now.” So you go, “Yes, dear.”
Larry: So you call the waitress over. They know who you are, and they go, “Oh, so Jerry, you finally decided what you want to eat?” He goes, “Yep.” “What are you going to have?” And you say, “I’ll just take one of everything.” And your wife’s looking at you, your friends are looking at you. The waitress just fainted because she’s expecting a big tip, right? And she goes, “Beg your pardon?” You go, “I’m undecided, but if I don’t order pretty soon, I’m going to be a dead man. So I might as well just order. So just give me everything on the menu.”
Larry: So you order everything on the menu. It takes six waitresses. They end up moving you into the back room, that nice, little back-room area. It fills up every table. It costs you $2,000. You order everything on the menu, and all you eat is the ribeye. Jerry St. John, would you ever go to Sebastian’s and order everything on the menu, pay two grand, and then only eat one entree?
Jerry St. John: Not if I wanted to live.
Larry: Right.
Jerry St. John: Because the one who said, “You will order.”
Larry: Well, then she’ll kill you anyway, right?
Jerry St. John: Yeah.
Larry: So if you wouldn’t do that going out to eat, why would you want to do that with your health care?
Jerry St. John: Very good analogy. It makes sense.
Larry: Does it make sense?
Jerry St. John: Yeah.
Larry: So does that mean… So I had people… I saw people say, “So what you’re saying is I should take an Advantage plan?” No, I’m putting it in perspective. I do a lot of business with Supplements, okay? But what I find is people that aren’t educated about the Advantage side don’t understand what risk analysis is. Risk analysis. So if you have two people, a husband and a wife, and your max out-of-pocket is $4,000 and you save four grand, something’s going to have to happen major to each one of you every year for it not to work out for you.
Jerry St. John: Makes sense.
Bree: I do think it’s important just to point out that when you turn 65, you can go into a Supplement without being asked medical questions. If you opt for an Advantage plan at 65 or when you first start your initial enrollment period, you have one year to try out an Advantage plan, and you can opt to go back to a Supplement without health questions. If you opt for an Advantage plan and stay on it, let’s say, five, 10 years, if something comes up and then you want to switch to a Supplement, they can medically underwrite you. So that is one thing to keep in mind when you are making the decision between the two. Just to make sure that you know that if you opt for the Advantage plan, if something does come up, you are… You can go back to the Supplement plan, but they can either increase the premium, they can deny you, or they can keep it the same, I guess.
Larry: Yeah, that’s after the one year.
Bree: After the one year.
Larry: So basically, you have like a one-year free look. So if you turn 65, you’re not sure which one you want, and you say, “You know what? I’m going to go on an Advantage plan. I’m going to try this out,” if you don’t like it, you’re guaranteed to go to a Med Sup no health questions asked. One year guaranteed free look. So it’d be kind of like driving a car. A test drive.
Jerry St. John: Yeah, a free test drive for a year.
Larry: You test drive a car for a year and then decide you don’t like it and you give it back; it doesn’t cost you anything.
Jerry St. John: That’d be a good deal if I could find that dealership.
Larry: Yeah. You find one, I’ll take that any day of the week.
Jerry St. John: Yeah. I’ll test drive a vehicle every year.
Larry: You bet you. You bet you. So generally speaking, what we find is, if people have health issues, they tend to… They like the security of a Medicare Supplement. If they’re in fairly good health, they like the idea of the Advantage plan. People that are fearful, just want to cover their bases, then take the supplement plan. If you’re a little more risk averse… And what I mean by that is you understand what risk is and you’re okay that… She mentioned the difference of the risk is like $1600 or $2000. We ask the client, “Do you lose sleep over $1,600 or $2,000?” And if they say, “No, I don’t lose sleep over that,” well then, you might want to consider the Advantage plans.
Larry: So, it’s really kind of educating. But the key is that you have the one-year free look, and so you have an opportunity for people to change, and then they can go back. But I think the other thing is, is knowing that that max out-of-pocket… Like you first said, you thought you have a big heart attack, you’re going to be paying that 4,500. No, you’re not. It’s going to be the co-pays.
Larry: But if the listeners want to learn more about the differences between the Supplement and the Advantage, because like I said, what we find is… There’s really not a real good opportunity because what we find is when we do our seminars, while we’re going through it, we encourage questions throughout, and we always get questions. Always, always, always. So it’s a great time. So if people want to learn more in a setting that’s very… And seminars are free. Next week on Tuesday, we have two more on Tuesday, January 21st at 3:30 and 6:00 PM at the Fond du Lac Senior Center.
Jerry St. John: Somebody asked me the other day how long they last.
Larry: They’re about an hour 15.
Jerry St. John: I said somewhere between an hour and an hour and a half.
Larry: Yeah, an hour 15, an hour and a half. It depends upon how many questions, to tell you the truth.
Jerry St. John: Yeah, you winged it.
Larry: Yeah. Yeah. We get a lot of questions at the seminars, and we’ll take every question. We encourage those. We encourage those questions.
Jerry St. John: Well, that’s what people want to know.
Larry: And who should come to our seminars? People that are turning 65, people that are considering retiring, people that think… A big, common question or concern we hear is, “I wish I could retire, Jerry, but I can’t because I need the health insurance.” If you or your friends say that to themselves or you hear people say that, they should come to our seminar or give us a call because we can show them where we can… Through Obamacare, through ACA, we can show them that they could probably pay little or no premium. In fact, two 63-year-olds in Dodge, any of the counties, surrounding counties here, 63 years old, if their taxable income is under $67,000 a year in 2020, their premium would be zero. Nothing.
Jerry St. John: That’s a good number.
Larry: That’s a good number. So, anyway, and you can register for our seminars at goebelins.com. Go to our website at G-O-E-B-E-L-I-N-S.com or give our office a call at 921-7526. Or if you want to stop out at our office, we’re at 131 North Rolling Meadows Drive on the West Frontage Road right across from FloorQuest, just south of Action Ad on that same side of the street is where we’re located. Now, next week, Cathy’s going to be here. Let me tell you what the topic is so that the listeners can talk about that. It’s going to be on when and how to enroll in Medicare. So next week Saturday, Insurance Smart with Cathy Reines Steffes.
Jerry St. John: All righty, we shall be here. Thanks to you both.
Bree: Yes, thank you.
Jerry St. John: Very informative, very much information. We will see you down the road. KFIZ News time, 8:30. We’re at 32 degrees.
