Covering the Medicare Gap with Medicare Supplements
Announcer: Welcome to our fireside chat with Seniors Living Healthy, the podcast that helps prepare and educate you as you enter and live out your golden years. With over 10 years of experience, Nick and Zach are experts in the senior market and are here to help you live a healthy, full life. And now fireside with your hosts, Nick Keene, and Zach Haire.
Zach: Welcome back to episode five of season one of Seniors Living Healthy. I’m your host, Zach, and with me as always, is Nick.
Nick: Hello, folks.
Zach: Also, we’re pleased to be joined this week by Danny Haire, owner of Financial Services, Inc.
Danny: Hi. How are y’all today?
Nick: Doing well, sir. Thanks for joining.
Zach: Thanks for jumping on here with us, Danny. So, he has been in the business for over 40 years, and can even remember back when Medicare Supplement Plans first came out. Danny, real quick, do you kind of want to just give us a quick historical rundown of Medicare Supplements, where they came from, who brought them out, that type of thing.
Danny: Well, of course, President Johnson is the one that signed Medicare into law, and that was done in 1965. And soon after that, a multitude of companies brought out Medicare type Supplement Plans. The difference from those plans compared to today is there were no government standardized plans. Companies pretty much got to put together whatever they wanted to do. I mean, of course, they were going to cover what Medicare didn’t, but they could add bells and whistles and different things that way.
And then as time went on, of course, the government standardized these plans. So, that was pretty much, I think, in the ’80s, when that happened, that these plans become standardized and everybody was selling the same thing, and there could not be any deviation from those.
Zach: Gotcha. So, as we did discuss last episode, Medicare’s got those gaps in it, and so there are plans out there to fill those gaps. As we talked about last episode, those Medicare Advantage Plans. So, this episode we’re going to look at Medicare Supplements, and also, kind of similar to our last episode, instead of doing a product review, being this whole episode on a product, we’re just going to kind of lump our interview portion in with our product review, just because it’s going to flow so well together.
Nick: So, Danny, quick question for you tell us why Medicare Supplement Plans benefit our clients?
Danny: Zachary said earlier I’ve been in the business for well over 40 years. So, having seen changes and seeing what these plans can do for people in filling in the gaps, I just think it gives—anything that gives you control of your healthcare, in my thinking, is the best for you. You can go to any doctor, any time, any place. You’re not in networks, you’re not having to get pre-approvals or referrals. So, to me, that’s what makes Medicare Supplements a great deal for people because it leaves them in control of what they want to do as far as their healthcare is concerned.
Nick: Sure. Couldn’t agree more. A couple things to point out also, Zach, that come to mind is Medicare Supplemental policies are secondary to Medicare, meaning Medicare is still their primary, meaning it’s a nationwide program, they can go anywhere that accepts Medicare. And as you mentioned earlier, Danny, they’re also standardized. So, the coverage from one company to another is identical from plan to plan.
And more importantly, we get asked quite frequently, can these plans be canceled based on a year of high claims, or claims level? And the answer is simply no. The only way a person’s Medicare Supplement Plan can be canceled is due to non-payment; it’s what’s called guaranteed renewability. Zach?
Zach: Kind of going back, touching on a few of those points, you know, going through Medicare Supplements, as we talked about in the last episode—Advantage plans as well—you can only buy those certain times of the year with the annual enrollment period, whereas a Supplement, you can buy those any time of the year. As long as you can enter the health questions and qualify there. So, kind of on that note there, Danny, what are some pros to that capability to be able to purchase a MedSup and not—as you said, gives you the freedom. If you want to go a little more into that?
Danny: Well, the freedom, to me, is the most important thing. Being of Medicare age myself, and having the flexibility if I want to change a plan, go from one plan to another, or go from one company to another, again, that’s just part of the freedom and having that control that I’ve talked about, whereas, as you said, with the Medicare Advantage, there’s certain times of year, there’s certain special enrollments, maybe, that could happen. But if you’re in a Medicare Advantage Plan and your doctor drops out of it, there’s nothing you can do until the open enrollment period. As long as a doctor accepts Medicare, he’s not going to drop out of Medicare, he’s going—and so your Medicare Supplement will always cover it because, as Nick said earlier, it’s a supplement to Medicare. Medicare covers the charge, and the doctor is participating in Medicare, then your plan’s going to pay.
Zach: Definitely. Also too, as we’ve talked about in episode three and four—episode three being on prescription plans and four being on the MAPDs that include some prescription coverage—Supplements, what are they going to do for you, drug plan-wise, you know, coverage-wise, how would that work for somebody out there looking for prescription coverage along with their Supplement?
Danny: Well, of course, President Bush was one that signed in the bill that included the Part D of Medicare prescription drug plans. Up until that time, the majority of people did not have drug coverage if they were on Medicare. There was, once upon a time, what was called a Plan J Medicare Supplement that did provide some prescription drug coverage in that plan. But the Part D is what really does the prescription drug coverage. It’s like everything else; Medicare has evolved, coverages have been added, things have changed, and the same is true with the Part D. It’s been evolving where it gets better and better as time goes on.
Zach: Gotcha. And so, as we’ve talked about, as well, kind of going back a little bit to the plans being standardized, and as you just mentioned, a plan there, you know, there are several different plans out there in the market. There are some that are, of course, more popular than others. So, if we kind of want to run through those a little bit—maybe just hit on the more popular plans; we don’t want to be here all day—going through plans.
Nick: Yeah, Zach, that’s a great question. So, there’s a number of Supplement Plans currently on the market. But predominantly, we run into the same few over and over again, right? So, we have Plan F, Plan G, and Plan N. One thing to mention, Zach, recent legislation just passed, the MACRA legislation, limiting individual’s availability to buy a plan that covered the Part B deductible of Medicare.
So, there’s been a lot of news lately coming out about Plan C and Plan F, and there’s a little bit of confusion around it, I think would be worth mentioning real quick. So, individuals that are newly eligible to Medicare, January 1st, 2020, or after, no longer have the ability to buy those two plans. However, individuals that were Medicare eligible prior to January 1st, 2020, can keep their current plan and purchase another Plan F or C for the rest of their life. So, that’s worth noting.
The other two plans mentioned, G and N are very similar to Plan F. Plan G has a deductible that an individual has to meet. And that, in the year 2020, is 198 bucks. And Plan N is the copay plan, right? So, Plan N is going to be responsible for the same deductible, going to be responsible for excess charges, and have a $20 copay—up to $20 at their doctor’s visits and $50 at the emergency room, if they’re not admitted. Check out our website or reach out to us to get more details on the other plans, but those are the most popular.
Zach: Gotcha, gotcha. Like I said, Nick, kind of touching on some, you know, the plans a little bit there, some plans going and coming. Danny, kind of want to throw one out to you. Nick may touch on it here a little bit, but a new plan that came out in 2020, the high deductible Plan G. What do you think that could do to the market? What kind of options do you think that’ll bring to—as we talked about earlier, a benefit to our clients.
Danny: Until MACRA came along, people had access to the Plan F, where everyone had access to the Plan F and the high deductible Plan F. When that changed, of course, we came out with a high deductible G Plan. Basically, what the government’s trying to do is they wanted to do away with plans that would pay 100 percent of everything that Medicare didn’t pay. They wanted the insured to be responsible for the Part B deductible. And that’s basically—with the Plan G it doesn’t cover the Part B deductible, so technically that doesn’t go toward the deductible of it.
But if someone’s healthy, especially if they’re coming out of a major medical plan. A lot of these group major medicals, or even individual major medical, they’re having $2500, $5000 deductibles, so they’re used to paying money out of pocket. And the G Plan, the high deductible G, it has a deductible that any charge that Medicare doesn’t cover that the plan would cover, it goes toward that deductible. But the good thing is Medicare is still paying what they pay. So, if you go in the hospital, basically all you’re going to have is the Part A deductible that’s going towards your high deductible G plan, and then the 20 percent of the doctor would go toward that deductible also, but after the Part B deductible, 80 percent would be covered by Medicare.
So, again, if a person is healthy—and that’s why they really need to be talking to you guys, and calling in—these people do—because it’s really important to know what fits your health. If you’re a healthy person, there’s a lot of ways that you can save money by getting the right plan.
Nick: And just to point out on top of that, Danny, there is certainly cost-effective measure for someone that’s healthy, the amount of money that someone can save on a high deductible F or high deductible G, in most cases can cover half of that deductible, at least, in any given year versus a Plan G, or Plan F. So, reach out to us to explore some more options as it relates to that.
Zach: So, Danny, thanks for jumping on here with us, again, and going through answering some questions kind of breaking down Medicare Supplements.
So, next, as you guys know, we’re going to do some Medicare confessions here. And Nick and I deal with Supplements on a daily basis. We talked to hundreds of people within a month, helping them, whether it be new to Medicare, getting on something for the first time, switching Supplement to Supplement, saving money, or an annual enrollment period coming off an Advantage Plan on to a Supplement. So, we could be here all day going through stories and everything, telling those. So, we decided, kind of going through it, Nick’s just going to pick out two or three that really stand out to him of a couple of different scenarios, how us helping somebody really, really benefited them.
Nick: Yeah, Zach. So, as you said, we could be here all day giving specific examples of ways we helped individuals, whether that’s taking advantage of open enrollment periods to get people coverage that they might otherwise not qualify for, whether that’s switching plan to plan, saving money, or what have you. So, just a couple scenarios that come to my mind real quick. A couple years back, one of our agents got ahold of a couple from Sevierville, Tennessee, that were getting older in age. Had been on Supplement Plans a little over 20 years, and their rates had climbed to a point that we were actually able to get them the exact same coverage that they had had for a number of years, saving them a little over $2400 per year. So, since the plans are standardized, we had the capability to find the same benefit package, the same coverage with another provider saving them a ton of money. So, that’s one way we can help folks.
Another one is taking advantage of specific enrollment periods to get individuals covered. So, as we know, people have an open enrollment period when they are new to Medicare or turning 65 that allows them to purchase any Medicare Supplement Plan without health questions, without underwriting. We had an individual locally here to the office that had worked in the mines his whole life, and we got a hold of him, luckily, during his open enrollment period. He has black lung and a lot of complications that come with that as it relates to oxygen and some other things. We were able to get him a G Plan for just over 100 bucks a month, guaranteeing him that he’s going to be insured for the rest of his future, getting him good and covered, and making sure that his health costs weren’t a problem for him.
And then the third one that comes to mind is persistency on our end, trying to help our clients. A couple years back, I came across one of probably my oldest clients, Zach, and had her on the books for almost three years and consistently tried to get her husband to purchase coverage from us, year after year, call after call, check-in after check-in, we finally got this individual covered. And less than four months after that happened, he had a massive stroke, was in the hospital in continuous skilled care for 100 days straight. We can go on about the costs that we save them, but ultimately, we saved them a ton of money in bills that didn’t come in the mail. So, persistency on our end is a benefit that we offer to our customers as well. Those are just some scenarios that come to my mind in ways that we can help individuals on a day in and day out basis.
Zach: Definitely. Like I said, there’s a lot of different scenarios out there. We can help people, whether it being saving money, getting on a Supplement just to start, especially if you’re getting ready to go on to Medicare, or take your Part B, or turning 65.
So, we want to thank everyone for listening. Again, big thank you to Danny from Financial Services for jumping here with us and going through everything. And we hope we answered a lot of the questions about Supplements that you guys may have out there to help you fill in your gaps to Medicare. Remember it is in the name itself: it is secondary to Medicare, it’s going to supplement that coverage there with Medicare. Again, all plans are standardized.
So, Plan G, Plan N, Plan F no matter the company, they’re all going to be the same across the board. Again, guaranteed renewable: as long as you pay those premiums, they can’t drop you due to health. Purchase them year-round as well, so you don’t have to wait for the Annual Enrollment Period in October. If you want to switch in May, June, July, something like that, you want to—look into saving some money, give us a shout, we’d love to help. Again 12-month rate lock as well, another big thing: they’re not going to change the rates on you every month, once you start out, you know, where you go, going to be locked in there.
So, again, guys, as we’re recording this, we are getting close to Annual Enrollment Period, so definitely reach out to us. We’d love to help you, especially during that time of the year. Again, if any questions, you can always email us firstname.lastname@example.org, or call us, 844-437-4282. Always a good time to check in on your Medicare Supplement. We’re more than happy to, at any time, run those rates, check them for you. There’s never a bad time not to check them. So, thanks for joining us, guys, and until next episode, God bless and have a good day.
Nick: Take care.
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*All coinsurance, copayments, deductibles, and premiums are based on the rates for 2020.