Author: Dan Hoelscher

Dan Hoelscher founded Seniormark in 2007 in an effort to help individuals make a successful transition into retirement. Dan is a Certified Financial Planner™ Practitioner and holds Certified Senior Advisor (CSA)© and Certified Kingdom Advisor™ certifications. Since founding Seniormark, Dan has helped thousands of retirees throughout Ohio.

Can I Really Get a Medicare Advantage Plan For Free?

Posted on October 24, 2017 by - Medicare, Medicare Advantage, Medicare Annual Enrollment

Can I Really Get a Medicare Advantage Plan For Free?

Yes, for quite a few Medicare Advantage plans, you will not have to pay a dime in premiums. And to sweeten to deal, you can even get extra benefits like gym memberships or a built in drug coverage with some plans. But I’m very stingy with my use of the word “free.”

 

From my experience, an Advantage Plan is free in the same way the newborn puppies of your best friend’s dog are “free.” You may not have to pay for the puppy, but how many know having man’s best friend around the house isn’t exactly a recipe for super savings (especially if you’ve got furniture and footwear that look especially appetizing in black and white)?

 

You see, a Medicare Advantage Plan might not cost anything in premiums, but it may eat up your money in the end. I’m not saying they aren’t right for some people, in fact; I’ve placed people in $0 Advantage Plans to their long-term satisfaction. For the cost-conscious retiree who is romping into retirement, healthy as a horse, it may be the best option. But before you purchase one, make sure you understand the hassles and extra costs that come along with the decision. I’ve outlined a few of the most important ones:

 

Networks

Advantage Plans have networks of health care providers that they have contracted with, usually within a fairly tight geographic area. If you do not receive care at one of their pre-picked providers, it can mean much higher copays and coinsurance amounts. If you are in an HMO plan, they may not even cover you at all while receiving care out of network. This can work just fine for a person who stays local most of the year, but it does put the burden on you to ensure that your health care provider is in-network. Making mistakes could cost you heavily.

 

Inconsistency

With a Medicare Supplement, the benefits are stable, but with an Advantage Plan, this is hardly ever the case.

 

Since the private insurance companies that offer Advantage Plans re-file their contract with Medicare every year, the benefits always change—sometimes dramatically. One of your preferred doctors could go out of network. Copayments, coinsurance, and deductibles can all shoot up. This is why you must review your plan every year so you won’t be caught unaware. If you set your plan to the side and forget about it (see “Don’t Set it and Forget It!) for even one year, it can be quite upsetting financially.

 

Potentially High Out-of-pocket Costs

I always like to remind people that Advantage Plans have more of a “pay as you go” approach. You pay less in premiums, yes.  But you may make up for it in deductibles, copayments, and coinsurance. For example, almost all Advantage Plans still keep you on the hook for the 20% coinsurance on Part B. That’s fine for an x-ray, but not as much for an outpatient surgery that may be $20,000 or more.

So be aware, Advantage plans do limit your annual out-of-pocket spending, but these caps are generally pretty high. If you have a period of extended illness, you could spend anywhere from $3500-6000 per year or more!

 

That doesn’t sound like free to me.

 

Need Expert Help Navigating Medicare? Confused About Your Options?

Click here to sign up for our free Medicare workshop or call our office at 937-492-8800 and get the guidance you need! No high-pressure sales pitches here, just in-depth discussion about the ins and outs of Medicare!

6 Annual Enrollment Dates You (Quite Literally) Can’t Afford to Forget

Posted on October 16, 2017 by - Medicare, Medicare Advantage, Medicare Annual Enrollment, Medicare Drug Plan

6 Annual Enrollment Dates You (Quite Literally) Can’t Afford to Forget

I know you’ve got a lot of dates to juggle: birthdays, anniversaries, holiday get togethers, or departure dates for long awaited travel plans. But you have to leave some empty space—in your memory and on your calendar—to add these 6 dates.

 

Why?

 

Because the Medicare Annual Enrollment Period is upon us, a time when the Medicare marketplace is bustling with transactions. Beneficiaries such as yourself are switching Drug Plans, Advantage Plans, or transitioning from an Advantage Plan to a Medicare Supplement or vice versa. These are strategic moves you can only make during Annual Enrollment!

 

Now, if you are thinking, “I’m perfectly fine with my health insurance. I’ll just let it go this year,” I’d like to offer a word of warning: Not reviewing your Medicare health insurance plans this Annual Enrollment Period could cost you thousands. You see, Benefits and premiums change from year to year, so you have to review your plans with a professional to ensure you are still in the best-valued plan for your needs.

 

It doesn’t seem like letting it slide just one year could end up being so costly, but I’ve seen it happen again and again. In fact, I recently had a man come into my office in January, confused about why his approximately $190 per month prescription wasn’t covered anymore. As it turns out, he missed Annual Enrollment. The insurance company dropped his prescription from their formulary (list of covered drugs) for the new year. Unfortunately, I had to tell him, he was stuck in the ill-fitting Drug Plan for the whole year, the consequences of a mistake that would (by the end of the year) cost him $2,280. Ouch.

 

So, if you are a current Medicare beneficiary, get your pen ready and calendar ready. Annual Enrollment (October 15—December 7) is chock full of clear-cut deadlines. Don’t find yourself locked into a financially draining health insurance plan! You (quite literally) can’t afford to miss these 6 dates:

1. October 1st

This is the day we, as an insurance agency, receive all of the new information regarding plan changes.

  • Did your Drug Plan drop your most expensive prescription from its formulary?
  • Was there a premium hike?
  • If you have an Advantage Plan, is your doctor still considered “in-network?”

October 1st is the day we have all these answers and can speak to you about the possibility of switching to save you money and hassle.

 

Note: You can call about your options anytime during Annual Enrollment, but the earlier is truly the better. This time of year is quite busy!

2.October 15

The marketplace is open!  Annual enrollment has officially begun, and you can now enroll in a new plan.

3.December 7

I hope you have made all the necessary changes, because—at this date—you are locked into your plans for another year. Annual enrollment is closed.

4.January 1

It’s a new year, a new resolution, and—quite possibly—new insurance. This is the date any changes you made during the open enrollment period go into effect.

5.January 1

Nope, you didn’t just read the same line twice, and you are not seeing double! I know this is a repeat, but I want to clarify why this date is worth the extra mention: It is also the first day of the Advantage Plan disenrollment period. Just in case you’re second-guessing your decision, Medicare set up a disenrollment period where you can get out of your Advantage Plan with no penalties.

6.February 14

Finally, this is the last day of Medicare’s disenrollment period. If you are in an Advantage Plan and don’t like it, this is your last chance to drop it!

BONUS: February 14th is also Valentine’s Day. You’re welcome.

 

Looking to Review Your Plans With a Medicare Expert?

Even if you are not yet sure if you want to switch, I recommend giving Seniormark a call at 937-492-8800! Our friendly and caring staff is more than willing to be a resource during this bustling Annual Enrollment season. We will help ensure you meet all the deadlines and end up in a great plan for your needs and pocketbook as the New Year rolls around.

Beat The Medicare Supplement Premium Creep by Shopping Around!

Posted on September 12, 2017 by - Medicare, Medicare Supplement

Beat The Medicare Supplement Premium Creep by Shopping Around!

If you’ve been in your Medicare Supplement Plan for 3-5 years or more without switching, it’s likely that you are overpaying big time.

 

You see, Medicare Supplement rates change from year to year. The one that was the best value last year may not be the best value now. In fact, they tend to creep—up and up and up.  And here’s why:

 

What Goes Up, Won’t Come Down

Medicare Supplement rates depend on total claim dollars the company pays out. Makes sense, right? The more money a company spends in claims, the more it needs to make, and the more it has to charge.

 

So as health care costs rise and policyholders make more expensive claims, premiums will slowly increase. And it doesn’t just stop. It continues to click upward, slow and steady, like a roller coaster.  Until—after a while—people unhitch their harnesses and exit in search of a more affordable plan.

 

But here’s the problem: the policyholders who leave aren’t the sick ones. Most of them wouldn’t be able to qualify for other insurance based on their health. No. The policyholders who leave are the healthy ones. The ones who balance out the budget, make fewer claims, and (ultimately) keep insurance companies in the black. This leaves an unhealthy pool of beneficiaries behind, the ones who need insurance the most and make the most (and the most expensive) claims.

 

So how does an insurance company cope? They let their premiums creep up even more, even faster. Click. Click. Click. But unlike a rollercoaster, the premium will never peak. It will never come back down.

 

Beat the Creep by Shopping Around!

But fortunately, most people don’t have to be stuck on that ever-climbing rollercoaster. Even if you have less-than-perfect health, you can shop around. As I said before—if you haven’t switched your Medicare Supplement Plan for 3-5 years or more, you’re probably paying too much! It’s time to switch.

 

Some More Good News

And this doesn’t mean you have to reduce your coverage either. You can get the exact same benefits for much less. Because of standardization, a plan F at one company is identical to a plan F at any other company. The same goes for all 11 Medicare Supplement Plans. So as long as the provider is decently rated (we usually recommend a B+ or above), you can go with the least expensive plan without sacrificing anything!

 

The bottom line is this: there’s really no reason to not take a look. We’ve had clients save hundreds a year by switching. So check the competition. Bargain hunt. Shop. You have nothing to lose, and a much lower premium to gain.

 

Need a quick way to compare Supplement prices? Use our Supplement Quoting tool to get you started. If you have any questions about what you find, call Seniormark at 937-492-8800. We’re here to help.

 

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The #1 Reason Why You Should Enroll in Medicare Part A

Posted on August 4, 2017 by - Medicare, Medicare Advantage, Medicare Supplement

The #1 Reason Why You Should Enroll in Medicare Part A

(Even If You’re Still Working)

Whether or not you should sign up for Part B while still actively employed is a little more questionable. I mean, why pay that $134 a month premium if you’re employer plan is doing a fine job at a cheaper price. But Part A is not like that. There are basically no downsides to enrolling once you’ve turned 65. Why, you ask?

Because It’s Free!

Of course, that is neglecting the fact that you’ve paid into social security for about 40 years and—therefore—have earned it. But—wherever you stand on the proverbial “free lunch” debate— this does not change the fact that Medicare Part A has no associated premium. If you are approaching 65 and have paid into Social Security for at least 10 years, there is no reason to delay.

There is only one reason why you would want to opt out of Part A…

Health Savings Accounts

If your have an HSA and wish to continue contributing to it, you may want to delay Part A. Of course, you can still have an HSA. And you can still use it to pay medical expenses. But you cannot put any money into it after you enroll in Medicare. There are some people who do, of course—whether unknowingly or purposefully—but this is not a wise choice. If the IRS audits you, you will be subject to a stiff penalty. According to IRS publication 969, the penalty is 6% of your contribution and its interest until you remove the funds from your HSA.

But other than that, you should definitely enroll in Part A if you are approaching 65. All those years of the government dipping into your earnings have paid off—if only in a small way. There may not be such a thing as a “free lunch”, but there is such a thing as taking advantage of what you’ve so rightfully earned.

We know. Medicare is confusing. Still have questions?  Just contact Seniormark at 937-492-8800 for a free consultation, or sign up for our next workshop!

 

 

A Side-by-Side Comparison of Medicare Advantage and Medicare Supplements

Posted on July 18, 2017 by - Health and wellbeing, Medicare, Medicare Advantage, Medicare Drug Plan, Medicare Supplement, Retirement Planning, Uncategorized

A Side-by-Side Comparison of Medicare Advantage and Medicare Supplements

When it comes to Medicare, you only have two big options. That’s it.

The piles of mail you’ve been receiving from various agents as you approach 65 do not represent hundreds of choices. There are only 2 ways to get your Medicare coverage.

First, I hope you have already signed up for Medicare (If not, hop on over to our blog titled “What Is the Fastest Way to Sign Up For Medicare? to take care of that, then come back and read the rest of this!).

The first way is just to stick with original Medicare—Parts A and B. Then you need what is known as Medicare Supplement Insurance, named as such because it “supplements” Medicare, filling in the gaps of what Medicare doesn’t cover.

The other option, however, is to get a Medicare Advantage Plan. This is an alternative to Original Medicare provided through private insurance companies that have contracted with Medicare. Although you still have to sign up for Parts A and B to be eligible, this replaces Medicare as the primary payer of your claims.

Choosing one or the other comes down to what’s most important to you. You can’t have both! What I am going to do is hold both of these options up to the light, side-by-side, so you can see clearly the strengths and weaknesses of each.

Check it out:

Medicare Supplement

 

PROS  

  1. Minimal Out-of-Pocket Spending

You won’t have much coinsurance or copays with a Supplement. Most of it is covered.

 

  1. Predictability

They are also fairly consistent from year to year. They do creep up in premium (see our blog “Beat the Medicare Supplement Creep”, but they rarely leap! The benefits are guaranteed to stay the same.

 

  1. Out-of-State Coverage

Supplements cover you the same whether you are in your home state or out. Vacation homes? Extensive trips? No big deal. You’re covered.

 

  1. No Networks

You are free to use any doctor or hospital that accepts Medicare without sacrificing your coverage.

 

 

CONS

  1. Higher Premium

An in-the-ballpark average Supplement price is about $110 per month premium. This is higher than most Advantage Plans.

 

  1. No Drug Plan

Drug plans are not built in. You have to get a stand-alone drug plan, which cost an average of $34.10 per month in 2016.

 

Medicare Advantage

 

CONS

  1. High Out-of-Pocket Spending

Advantage plans have more of a pay-as-you-go approach. Higher copays, coinsurance, and unexpected costs are common.

 

  1. Unpredictability

Since Advantage plans are funded by government subsidy, benefits and premium costs tend to vary from year to year as a result.

 

 

 

 

  1. Out-of-State Coverage…Sometimes

Only in the case of emergency will you receive coverage out of your home state. Other than that, you’re on your own.

 

  1. Networks

They have them…networks of preferred hospitals and doctors. If you don’t use those preferred providers, you might have less coverage or—depending on the plan—no coverage at all.

 

PROS

  1. Low to No Premium

The average premium is somewhere around 60 dollars a month. Some are even free!

 

  1. Built-in Drug Plan

The vast majority of Advantage plans include a drug plan. No hassle or extra premium for you!

As you can see, the Medicare Supplement route is more costly, but there are a lot of benefits that give you more peace of mind and—all in all—less hassle.

On the other hand, the Medicare Advantage route is more economic, but it has fewer benefits, leading to unexpected costs and stress.

But both do their jobs. They both limit the potentially high out-of-pocket spending that is left by Medicare alone. Whatever you choose, don’t leave yourself vulnerable. Medicare alone is never a good idea!

Turning 65 soon and not sure what to do? Click here to sign up for our free Medicare workshop. No high-pressure sales pitches here, just in-depth discussion about the ins and outs of Medicare!

Workshops

10 Medicare Terms To Get You Started

Posted on July 12, 2017 by - Health and wellbeing, Medicare, Medicare Advantage, Medicare Drug Plan, Medicare Supplement, Retirement Planning, Uncategorized

10 Medicare Terms To Get You Started

If you’ve ever done research in your life, you know that knowledgeable people sometimes overdo it. They use words that only other life-long Medicare experts would know.

 

And when you ask them to explain, what do they do? Use even bigger and scarier words to describe the ones you didn’t understand in the first place. Our philosophy: Never use a big word, when a singularly un-loquacious and diminutive linguistic expression will do the trick.

 

Over our 19 years of helping retirees, it has served us well. Now we are here to pass our knowledge onto you in words you understand. To get started, here are 10 commonly used terms:

1. Medicare

At the top of the list, I like to kick-it-off with the basics. Medicare is a government-run health care program for those over 65. It is also for younger people with disabilities or kidney failure, but its primary concern is to serve the older generation.

2. Medicaid

This is often confused with Medicare, but they are completely different programs. Although they both serve the same purpose (to provide health insurance), Medicaid is for people with low income. There is a chance that you might be eligible for both programs at the same time.

3. Medicare Beneficiary

This is you. Or if you haven’t signed up yet, it will be you very soon. A Medicare beneficiary is a person enrolled in Medicare, receiving Medicare benefits.

4. Initial Enrollment Period (IEP)

The IEP is made up of 3 parts: the 3 months before you turn 65, your 65th birthday month, and the 3 months after. This 7-month window is the time that most people should sign up for Medicare. If you miss your IEP, it could lead to costly penalties. So pay attention. Like all time, those 7 months will fly by!

5. Part A

Medicare is divided up into 4 parts (A, B, C, and D). And Part A is your inpatient care. It includes nursing care, hospice, and some home health services. But—for the most part—it is coverage for when you are officially checked-in at a hospital.

6. Part B

Part B is exactly the opposite of Part A. It is your outpatient care, including lab tests, medically necessary supplies, and various screenings. To keep simple, Part B is care received while checked-out of the hospital.

7. Original (Traditional) Medicare

This one is simple. Whenever someone refers to original (or traditional) Medicare, they are referring to Parts A and B together.

8. Part C (Medicare Advantage)

Medicare Advantage is an alternative to original Medicare offered through private insurance companies that have contracted with Medicare. In other words, they replace Medicare as your health insurance provider. About 1 in 4 people choose Medicare Advantage, according to the Reader’s Digest. To find out the advantages and disadvantages of Part C, click here.

NOTE: You still have to sign up for Parts A and B to be eligible for Part C.

9. Part D

Part D is your drug plan. It covers your prescription medications. Also offered through private insurance companies, almost everyone signs up for Part D in addition to original Medicare (Parts A and B).

10. Medicare Supplement Insurance

A supplement is fondly nicknamed a “Medigap plan.” It is referred to this way because it “fills in the gaps” of what Medicare Parts A and B doesn’t cover on its own. Without it, you leave yourself quite vulnerable. There is no limit to what you could spend in uncovered health care costs!

That should be enough to get you started on this often-overwhelming journey of Medicare planning. As you continue to learn more and plan your retirement, we are committed to keeping you up-to date and informed…in words you can understand. How did we do? Leave us a comment below to pose any questions or concerns!

 

Turning 65 soon and confused about Medicare? Click here to sign up for our free Medicare workshop. No high-pressure sales pitches here, just in-depth discussion about the ins and outs of Medicare! We put it into words you can understand.

 

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Skilled vs. Custodial Care: Not Knowing The Difference Could Cost You Thousands

Posted on June 27, 2017 by - Uncategorized

Skilled vs. Custodial Care: Not Knowing The Difference Could Cost You Thousands

Every once in a while a client of ours visits our office with a hefty nursing home bill for their spouse or family member.  They want to know why Medicare didn’t cover their loved one’s stay.  After all, doesn’t Part A cover inpatient services?  The exchange usually ends with a huff of frustration:  “Medicare doesn’t seem to cover much of anything.”

I sympathize with this situation.  I really do.  But I find that their annoyance with Medicare usually subsides with a little understanding.  What they need to know is the difference between custodial and skilled nursing care, two important terms for retirees that are often used interchangeably or left unused.

So What’s the Difference?

Custodial care is non-skilled care for help with daily living. Think bathing, eating, getting up, sitting down, and going to the bathroom. This is not to say this type of assistance doesn’t take any skill. In fact, I would argue that it takes a great deal of patience, perseverance, communication and an awful lot of compassion. But this type of care can be administered safely without the help of a licensed nurse. That’s the difference.

Skilled nursing care is exactly the opposite. This type of care includes physical therapy or injections. It is delivered by registered nurses or licensed practical nurses. The driving idea is rehabilitation. They want to nurse the patients back to health, so they can take care of their daily living by themselves once again.

 

$ The Pocketbook Difference $

Here’s the dollars and cents difference: Medicare doesn’t cover custodial care, leaving you exposed to nursing home costs of 6000-8000 a month. However, it does cover the first 20 days of skilled nursing under part A (as long as you meet Medicare’s requirement for a skilled nursing stay).

 

This brings us back to our clients.

What they misunderstood was the nature of their loved one’s stay. Maybe it started out as skilled nursing care (and Medicare covered it), but transitioned into custodial care as the physical therapy or injections were no longer needed. Or maybe it was custodial care from the very beginning and their dad or brother or friend needs assistance over the long haul. Regardless, both of these scenarios resulted in overwhelming out-of-pocket costs.

The only way to combat these out-of-pocket costs is with careful planning. You can get a long-term care policy to cover custodial care. And you can get a Medicare Supplement to pick up the tab for days 21-100 for skilled nursing. It’s true that Medicare leaves a lot of gaps, so much so that it can feel like they don’t cover much of anything. But they are upfront about it, and they do deliver what they promise.

Need expert advice on Medicare? Call Seniormark at 937-492-8800 for a free consultation.

 

 

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Attention Retirees: Premiums Shouldn’t Rule Your Healthcare Plan Decisions

Posted on June 13, 2017 by - Medicare, Medicare Drug Plan, Medicare Supplement

Attention Retirees: Premiums Shouldn’t Rule Your Healthcare Plan Decisions

It is easy to do. If you’ve got a tight budget to think about, a drug plan with a low monthly premium is appealing. And if your past is fraught with health scares, it feels more secure to go with a high premium Medicare Supplement for “more comprehensive coverage”.

But you’ve got a lot more to consider when it comes to healthcare decisions: deductibles, coinsurance, copays, and medications, just to name a few. “Tunnel vision” focus on premiums will not help you make a smart decision.

 

Here are two examples why:

 

Lower Does Not Mean Better.

For a drug plan, people get in big trouble choosing a low premium drug plan hastily. Just because your friend or neighbor has an $18 per month drug plan that works for them, doesn’t mean it will work for you.

 

You have to consider your medications. Different drug plans cover medications at varying levels. If you are on an expensive drug and it isn’t on that plan’s formulary, it isn’t covered. If it is on a different tier, it could affect the dollar amount of copays you spend. Saving $10-15 a month on premiums isn’t worth it if you are paying an extra $150 a month on copays, coinsurance, or uncovered drugs. Pay the extra in premium for a drug plan that is right for you. Lower isn’t always better!

 

Higher isn’t always better, either.

I find that perceptions sometimes flip when it comes to Medicare Supplement Insurance. Clients believe that the most expensive and comprehensive plan is right for them, employing “you get what you pay for” logic. This saying is true a lot of times, but not always.

For instance, you can save approximately $20 per month by switching from a plan G to a plan N. The only difference between these two is a couple copays: $20 for office visits and $50 for emergency room visits.

This is where I lose people. They just don’t want the copays. But take a closer look. Is the free doctor and emergency room visits worth the extra $240 a year in premium? If you’re in good health, you probably only go to the doctor a few times a year for a general wellness test. It might save you $200 per year to go with a lesser coverage plan. In this case, it’s not worth it. When you compare the most comprehensive Plan F with G (see our blog “Underrated Plan G” by clicking here), you have another example, and that one is a no-brainer!

Of course, these choices are still up to you and your preferences. All I am asking you to do is not let premiums rule your decisions.

I’ve seen it work. Free thought leads to better value, all the time!

Need help shopping a Medicare Supplement Plan? Call Seniormark at 937-492-8800 for a free consultation!

 

Underrated Plan G Supplement Could Save You Hundreds a Year

Posted on May 24, 2017 by - Medicare, Medicare Supplement, Retirement Planning

Underrated Plan G Supplement Could Save You Hundreds a Year

Plan F is Medicare Supplement’s Cadillac plan. It is the one with the most comprehensive benefits of all 11 plans, reducing potential out-of-pocket spending for health insurance to an all-time low. It covers all Medicare approved expenses including deductibles, coinsurance, skilled nursing, and much more. Talk about a smooth ride! So when my clients are looking for a Medicare Supplement of high quality, that is usually the one they hop into. It is secure. It is hassle-free. And it’s just dang pretty.

 

But it is not always the best value. In fact, it rarely is, and here’s why:

 

Introducing Plan G

F G
Basic Benefits, including 100% Part B coinsurance Basic Benefits, including 100% Part B coinsurance
Skilled Nursing Facility Coinsurance Skilled Nursing Facility Coinsurance
Part A Deductible Part A Deductible
Part B Deductible $183
Part B Excess (100%) Part B Excess (100%)
Foreign Travel Emergency Foreign Travel Emergency

 *Red means you pay

Take a thoughtful look at the Plan F and G benefits side by side. You’ll notice that these two plans cover most of the same things. From basic benefits to the hefty $1316 Part A deductible, it’s identical. The only difference is that Plan G does not cover the annual $183 Part B deductible.

                       

Cutting Costs

Yet the premium difference between these two plans is often staggering: sometimes $30- 50 or more a month. And if you take into account the amount saved in premiums, Plan F starts to lose its luster.

 

How about an example? Let’s say a 65-year old female from Sidney, Ohio is shopping for a supplement. For AARP’s Plan F, she would pay $151.90 per month. And for an Aetna Plan G, she would pay $113.95 a month. That is a $455.40 a year difference! Although she would be giving up the benefit of having her $183 deductible paid for, she would still save $272.40 a year by choosing Plan G!

 

It seems the best benefits don’t always mean the best value. The overall cost is what counts, 100% of the time. So when shopping luxury, keep this in mind: Always check to see what you are paying for. You just might find a better deal elsewhere.

 

Curious about how much a plan G would cost you? Use our Medicare Supplement quoting tool to find out! Click here to find out your best rates!  https://seniormark.com/resources/

Image:  http://www.seniorsavingsnetwork.org/category/medicare

 

Do I Really Need a Medicare Supplement?

Posted on May 10, 2017 by - Employer, Medicare, Medicare Supplement, Retirement Planning, Uncategorized

Do I Really Need a Medicare Supplement?

 

David Belk, a doctor and anti-supplement activist says, “…If you have Medicare and buy a supplemental policy with your own money, you are effectively giving an insurance company your money so that they can keep it.”

 

Wow. This statement is moving. For those who have had a Medicare Supplement Policy for years, it slaps you in the face with regret.

 

And for those who may not be on Medicare and have yet to purchase Medicare Supplement Insurance, it frees you. It justifies a decision that will save you money on premium month to month.

 

However, it is not entirely true. He has a point, but—ultimately—it represents a fundamental misunderstanding of what insurance is.

 

If you take this statement at face value, it would imply that virtually all insurance is worthless.

 

Here’s why: in the vast majority of cases, people pay into insurance and then rarely use it. This is what keeps insurance companies in the black.

 

How many people spend thousands over years on homeowner’s insurance and never have their house burn down? How many people purchase car insurance and only experience a couple of fender benders over their lifetime? Are they essentially “giving their money away to an insurance company”? Yes, you could say that, and it wouldn’t be inaccurate, just a bit misleading.

 

Because you don’t buy insurance for things you expect! Rather, you buy it for things with a high dollar amount of risk and a low probability of happening!

 

You can’t insure what is high risk and high probability. Take Alex Honnold, for example. He spends his waking hours climbing steep ravines with no safety harness. For hours a day, he is one missed footing away from plummeting to his doom. Do you think he is going to be able to get life insurance? It’s almost laughable. This is a high risk, high probability scenario. Of course no insurance company will take a chance on him!

 

You can insure against a low risk, low probability scenario, but why would you want to? Do you want pet insurance for your grandson’s gerbil? Obviously not. Even a low-premium insurance plan wouldn’t be worth it. What did you pay for it? 30 bucks? Maybe fifty if it’s some hypoallergenic, exotic breed? Either way, it’s not a high enough risk.

 

So this begs the question…what does a supplement cover? Is it something that is low probability and high risk?

 

Well…there are varying coverage levels, but even the lowest premium plans cover Medicare’s scariest coverage gap: the unlimited out-of-pocket spending limit.

 

Sure, a lot of them cover “nickel and dime” copays and coinsurance costs that virtually eliminate hassle and reduce costs, but this is just icing on the cake. The real substance of a Supplement Plan is that it puts a cap on your potential out-of-pocket spending.

With Medicare alone, there is absolutely no limit to what you can spend.

 

One of our clients had triple bypass surgery and ended up with a $7,000 bill. My father-in-law with lung cancer had approximately $30-40,000 in charges for outpatient chemotherapy and radiation. I ran into a man who—after a few years of extended illness—racked up over $140,000 in bills that Medicare alone didn’t cover.

 

Can you imagine the devastation if any of these retirees forfeited Medicare Supplement Insurance? If these individuals had chosen Medicare alone, those outrageous bills would’ve been heaped upon their shoulders.

 

Now, what are the chances of this happening to you?

Not very high.

But that is the point! What are the chances that your house is going to burn down? What are the chances that your car will get totaled? You can cite statistics like Dr. Belk and say, “Look…not very many people need this insurance.” However, this doesn’t make those isolated cases any less scary. And it doesn’t change the fact that, from 2006-2015, Medicare Supplement Insurance companies consistently paid out over 75% in claims what they gathered in premiums. Insurance is not about whether or not you are going to get out what you pay in; it is about peace of mind.

 

So yes…I do recommend buying Medicare Supplement Insurance. You don’t necessarily need an expensive, luxury plan, but having something in place is essential. Even if you can’t afford a Supplement, you can (at the very least), purchase a low or no cost Medicare Advantage Plan that will cap your annual out-of-pocket spending at $4-6,000.

 

This won’t guarantee that you won’t be “giving an insurance company your money” but it will guarantee that you can live your retirement life freely and fearlessly, knowing that—in all those unlikely but possible scenarios—

 

you’re still covered.

 

Wondering how much a Medicare Supplement will cost you? Click here to use our Medicare Supplement quoting tool to find out!