Transcript:

[00:00:00] Voiceover: Welcome to the Life Unlimited Podcast with Larry Heller. You deserve complete financial advice so you can confidently live your life your way for life. Now let’s get into this week’s podcast episode. 

[00:00:19] Matt Halloran: Hello and welcome to another Life Unlimited podcast with your host Larry Heller Today. Craig Smith is our guest.

[00:00:24] Matt Halloran: He received his insurance license in 2013, really driven by the challenges that his friends and family faced. Navigating the Medicare maze. Now he’s absolutely dedicated to the senior marketplace nationwide and specializes in assisting baby boomers with their healthcare and insurance financial needs.

[00:00:42] Matt Halloran: With a commitment to unbiased guidance, Craig takes pride in tailoring comprehensive and affordable plans to cap potentially catastrophic medical costs for retirees and those approaching the age of 65. Larry, take it away. 

[00:00:56] Larry Heller: Thanks Matt. Thanks Craig for being here today. I know my audience is gonna be excited to listen to this ’cause everyone that gets close to needing Medicare starts asking us questions, so why not go to the Medicare expert like yourself?

[00:01:12] Larry Heller: thanks so much again for joining us, Craig. So let’s kind of start really at the beginning. what is Medicare? break it down in, you know, the different parts for our audience. 

[00:01:21] Craig Smith: Yeah. Well, it, it’s a federally insured program by the government, and it’s typically for people that are 65 or older or people that have certain [00:01:30] mental conditions like end stage renal failure or, or things along that line.

[00:01:35] Craig Smith: And it’s got different parts. It’s got part A, which is for hospitalization. Part B is for your doctors. That is what the government gives you. But then of course you need a drug plan and all the other items that you hear so often on television and radio and emails and inboxes that that you have to look at and see if you need it or don’t.

[00:01:54] Larry Heller: Right. So part A and part B that the government takes care of, and then the drug plan is what you really need to take, really need to take, take care of. And we’re gonna get into it. A lot of changes going on in that, in that world. so don’t we talk about eligibility and like who, you know, who is eligible for, for Medicare.

[00:02:10] Craig Smith: So anybody who’s turning 65 is eligible for Medicare or someone who has some end stage renal failure, as I said, is, is entitled to it. Or even somebody that’s been collecting social Security for 25 months. Uh, social Security Disability, I should say. They can qualify for under 65, but people who just because you’re turning 65, that seems like the magic age that people start to look at it.

[00:02:35] Craig Smith: Not everybody needs to sign up for it. Mm-Hmm. It depends if you got coverage from your job, maybe a significant other covers you. So not everybody has to sign up. And it’s important because part A is free. Part B, the government charges you for. Depending on your income, it, it’s a lot of money and you may not need it.

[00:02:56] Craig Smith: So it’s always good to check and see if it’s really something you need to, [00:03:00] to enroll in. 

[00:03:00] Larry Heller: Right. So let’s unpack that a little bit. So, like you mentioned, if, if you are working for a company, you may or may not, have to go on Medicare. I think is it a national or maybe a state, limit. But there are a certain amount of employees where you, even if you’re working, you still have to go on Medicare.

[00:03:18] Larry Heller: Uh, why don’t you expand on that? Let everyone know what that was, what that number is. 

[00:03:22] Craig Smith: Yeah, I mean, it’s national, so it’s not state by state. Otherwise, it would be a complete disaster if every state had enforced their own rules. So if you work for a company that has 20 or more employees, then your employer health insurance would be primary and Medicare would be secondary.

[00:03:40] Craig Smith: So that’s the reason why you may not need to sign up for Part B because you have health insurance or what they call creditable health insurance from your employer. most people sign up for part A anyways because it’s free. So, you know, government doesn’t give as much for free, but we’ll, we’ll take it.

[00:03:59] Craig Smith: and then the part B is where they charge you for and you don’t really need to until the coverage that you have from the job is gonna end. 

[00:04:08] Larry Heller: But what about if the coverage from the job you you’re paying for, so it could be, is that more expensive than Medicare? So even if you work for a company with more than 20 employees, would you still wanna look into the possibility of making Medicare your primary or you’re not allowed to?

[00:04:24] Craig Smith: No, you can. I mean, that is definitely a great point. It’s a conversation I have with a lot of people. You know, [00:04:30] what are the benefits of your plan and what are you paying? And then we can look at Medicare plans and compare the two. If the Medicare plan is better for you and it’s financially worth it and it’s meeting your health needs, it’s something to explore.

[00:04:44] Craig Smith: If your company plan is better and giving you more benefits, even though it may be more money, but you’re getting more benefits, that might be the option to stay 

[00:04:52] Craig Smith: with. 

[00:04:53] Larry Heller: And then if you’re covered, if your spouse is, let’s say younger, and you’re covered under your spouse’s plan, do you still need to, apply for Medicare?

[00:05:03] Craig Smith: No. If it’s under your plan, your spouse, or significant other, your partner, whomever it is. But one thing that I always like to point out, if the person turning 65 is the one who has the insurance and their significant other is on the plan with them. Sometimes if you drop your employer coverage, that might impact your significant other.

[00:05:24] Craig Smith: So you really have to weigh the pros and cons and what additional coverage your significant other would be able to get. Because sometimes when you drop the plan, everybody on that family plan with you is done, 

[00:05:36] Larry Heller: right? So you could possibly go if it, if it’s close in age, they could maybe go to Cobra as an option if Medicare made sense.

[00:05:43] Larry Heller: So, uh, all great points. so let’s just think about, a lot of people think they turn 65 and they’re automatically gonna be enrolled in in Medicare. Is that true? 

[00:05:53] Craig Smith: If you’re collecting social security, yes, you will be. They will automatically do that for you. You don’t really have [00:06:00] to do anything, but if you’re not collecting social security.

[00:06:03] Craig Smith: You know, it may not be the right choice at the current time, as long as you’ve got, like we said, coverage from the employer, which is, which is key. If you work for a company that has less than 20 employees, then you have to sign up for part A and part B, because when you work for an entity that’s less than 20 employees, Medicare is your primary.

[00:06:22] Craig Smith: The health insurance from the employee would be secondary. So if you work for a small company that’s got 10, 12 people, then you have to sign up for Medicare part A and part B. 

[00:06:32] Larry Heller: And what happens if you forget or you don’t sign up for, for Medicare, when you turn 65, 

[00:06:39] Craig Smith: uncle Sam will penalize you and the penalty is there for life.

[00:06:43] Craig Smith: Uh, it doesn’t, doesn’t go away. But you know, there’s a big window because you can enroll in Medicare three months before your 65th birthday, the month of, and three months after. So you got a seven month window there. And when people say, I forgot, you are inundated, which stuff in the mail and television and, and things along that line, even social security brings it to your attention.

[00:07:07] Craig Smith: If you don’t sign up for Medicare part A or part B and you don’t enroll in a drug plan, you’re gonna be penalized. And that penalty is there for life. 

[00:07:17] Larry Heller: So, so let’s even take that one step further. So now you’re receiving social security. So like you mentioned before, you’re automatically enrolled in Medicare, but you’re not enrolled in the drug plan of Medicare.

[00:07:28] Larry Heller: Correct. 

[00:07:29] Craig Smith: Right. [00:07:30] Sometimes they will automatically just put you in a drug plan to avoid a penalty, but they’re not sitting and saying, you know, okay, Larry, what medications do you take? What doses do you take? So they’re not necessarily putting you into the plan that really meets your needs. They may be doing it so you avoid a penalty, but that’s why it’s always good to speak to a professional because there are so many different plans out there.

[00:07:52] Craig Smith: And most people, their biggest complaint are the drugs they take. The medications are so darn expensive. You know, if you’re in the wrong plan, it could cost you a lot of money. 

[00:08:01] Larry Heller: Right. let’s talk about all the different types of coverage and we’ll get back to the, the cost of the drug plans.

[00:08:06] Larry Heller: ’cause I, I did read a little bit about some, there’s now some caps on that, so I’m interested in talking a little bit more about that. So, of course, like you mentioned before, you see it on TV a RP, they, there’s always these ads. For Medicare supplement plans, but there’s what is a Medicare supplement and then a Medicare Advantage plan.

[00:08:28] Larry Heller: What’s the differences? 

[00:08:30] Craig Smith: Yeah, so you have what’s called a Medicare Advantage plan. Sometimes they’ll call it Part C. Those plans are administered by a private insurance company. And they’re basically the gatekeeper. So all your claims and all are gonna go through them, and you may need prior authorization.

[00:08:46] Craig Smith: Maybe they’ll deny your claim because it’s administered by a private company and they typically have very low monthly premiums, or almost zero per month. But you typically held to a network and you have to stay within that network, which is usually [00:09:00] what a lot of people have when they’re working. And you have certain doctors and hospitals that you have to stick around in a Medicare supplement plan or gap plan.

[00:09:09] Craig Smith: Mimics Medicare, so basically it follows what Medicare guidelines are. Depending on your state, the premiums could be fairly high, but it allows you to go to any doctor, any hospital that takes Medicare. So it gives you a broader base and you don’t have to really worry about is this test gonna be approved If medic, if it’s a test that Medicare approves, it’s covered, but it’s got a high monthly premium.

[00:09:36] Craig Smith: And so you have to take that into account, and also you then need to get a separate drug plan. In addition to that, we’re on a Medicare Advantage or Part C. The drugs are usually under your doctor’s, hospitals and drugs are under one umbrella. Mm-hmm. 

[00:09:49] Larry Heller: So why don’t you walk, me through kind of a, case study.

[00:09:52] Larry Heller: Somebody comes to you and they say, Craig, I’m turning 65 in two months. I know I have to do something, but I’m not sure what, what, what to do. What are some of the questions that you would, ask to kind of uncover what they want to or what, what they should be doing? 

[00:10:05] Craig Smith: Right? So the first question is, do you have coverage from your employer or does your significant other have coverage?

[00:10:12] Craig Smith: a lot of people, if you’re in unions, a lot of times union benefits may carry over to your retirement. So it’s always good to check with the HR department to say, Hey, you know, when I retire do I still have benefits? 

[00:10:24] Larry Heller: Right. Unions, teachers, I guess. 

[00:10:26] Craig Smith: Yeah. Union teachers, cops fire me. You know, there’s, you know, it’s a [00:10:30] long list because sometimes when you leave that union coverage, you can never get it back.

[00:10:34] Craig Smith: So it’s always good to, to make sure that that’s, that’s taken care of. But I say to people, all right, well when are you turning 65? And also, we’d like to go over who your doctors are that you go to on a regular basis, not the doctor that you go to every five years. What medications that you take on a regular basis and what hospitals that if you had to go to.

[00:10:56] Craig Smith: Then we can then dive into the planned individually and we can explore which advantage plans work for your situation, or which Medicare supplement plans work for your situation. There are some people who are having treatment for some serious illnesses and you know, maybe the Medicare supplement plan might be the right thing.

[00:11:15] Craig Smith: The doctor they may wanna see, may not be in New York or Florida, maybe they’re in Ohio, so these are the things you want to take into consideration. And of course, some people might want a specific plan, but it may not be in their budget. You know, I don’t want to see somebody have to choose between, you know, buying food and paying for their health insurance.

[00:11:33] Larry Heller: so there’s really two things then. So you, you really want to kind of know, do you wanna be able to use any doctors that accept Medicare or do you wanna be limited to what the doctors are in this plan and comparing that to the cost of the cost of the two? Correct. 

[00:11:50] Craig Smith: Yeah. And most, if you live in a major city, you know there are some really good Medicare advantage plans.

[00:11:56] Craig Smith: Most people, as I said, are accustomed to having to use [00:12:00] doctors in network and things like that because that’s what they had their whole work career. So it’s nothing unusual. but most of the time, you know, you could find some really benefit rich plans that suit your needs on Medicare Advantage plans as well.

[00:12:12] Larry Heller: would you say there’s, most of your clients do Medicare Advantage plans or most do the Medicare supplement or it kind of varies. 

[00:12:19] Craig Smith: It varies, but right now, Medicare Advantage plans are definitely the largest growing sector because people say, okay, well I have to give Uncle Sam the Part B. Depending on your income right now, the lowest amount that the government’s gonna get from you is $174 and 70 cents from your paycheck.

[00:12:38] Craig Smith: If you were a higher wage earner, that number goes up. And it goes up substantially. So people start adding up the numbers and they’re like, wait a minute, it’s gonna cost me how much between the government and the plan? No way. Then, then that’s when the Medicare advantage plans really start to be appealing.

[00:12:53] Craig Smith: But it is the largest growing sector of the marketplace because Larry, you know, Medicare doesn’t cover hearing vision, dental, and long-term care. The Advantage plans or the Part Cs, they offer you gym memberships over the counter benefits, they, all those ancillary items sometimes are built into the plans which are appealing to people.

[00:13:12] Larry Heller: I mean, that’s a whole nother conversation where so many people think that Medicare covers long-term care, but that’s a whole, that’s a whole nother podcast in, in, in and of itself. Yeah. So, so let’s talk a little bit about the, uh, the drugs and the drug cost because, I, I mean, I’ve been [00:13:30] watching this. I know President Biden.

[00:13:31] Larry Heller: Talked about it in his, speech this year. So that’s been, I guess, one of the biggest problems with the Medicare supplements that people, especially people that have illnesses, cancer, significant illnesses, the cost of those drugs are just, could be astronomical. So I believe they have a cap now for this year, and then even a lower cap for next year for the, for the drug outlay.

[00:13:56] Craig Smith: Yeah, so that’s the biggest concern. So they’ve lowered it and you know, they are trying to put a cap on a lot of medications. You know, like Eliquis is a drug that is really prescribed to a lot of people. It’s probably one of the most expensive drugs on Medicare, if you could put a cap on the drug cost because you know, there’s some medications that can cost you, you know, four or $5,000 a year.

[00:14:21] Craig Smith: Which is a lot of money just to, to, to get your medications. So the Biden administration, it’s all the administrations are really saying, you know, we have to get this under control because that’s the largest cost. But then the question is, if you put a cap on it. Do the insurance companies just raise your premiums?

[00:14:40] Craig Smith: So you gotta always take that into consideration. 

[00:14:42] Larry Heller: Right? But I think the cap for this year may be your overall drug cap, like $2,000. Is that really Like 3000? Yeah, I’m sorry, 3000. 3000 for this year. And then it’s going down in 2025. 

[00:14:54] Craig Smith: Correct. Which is a great thing because you know, unfortunately somebody, like you’re saying, cancer [00:15:00] medication and stuff like that are really, really expensive.

[00:15:04] Craig Smith: It’s, you know, I speak to so many people that they just, they can’t afford the care that they need because they have to sacrifice other things. it’s a sad conversation sometimes. 

[00:15:14] Larry Heller: Yeah. one, one other thing is you, you now just, you now turn 65, you go ahead. You select one of these plans, and then you realize, uhoh, this plan isn’t right for me.

[00:15:24] Larry Heller: Am I stuck with this plan forever? 

[00:15:26] Craig Smith: Now. So what’s nice about Medicare is between October 15th and December 7th of every year, it’s called an annual enrollment period. So what we do with our clients is we review every client’s situation, and if nothing has changed, then you leave the plans as is and you say the course.

[00:15:43] Craig Smith: But if something has changed, we’ll look at that and review our options, and then you can make a change between October 15th and December 7th. The new plan won’t start until January, but every year. You know, with any insurance, you should look at it. And if you need to make changes, we make changes. If not, you just leave it alone and it’ll renew automatically.

[00:16:04] Larry Heller: Right. So it’s not one, it’s not one and done. you know, the, the, obviously the part a, part A is, but the, drug and the doctors could be changed every, every year. So I guess. On an ongoing basis, things change in their situation, um, in the type of policies that are out there, that could change too.

[00:16:20] Larry Heller: What, what about if you move from one state to the, to the other? I know this is a national program, but the, the actual plans or if it by state? Correct. 

[00:16:29] Craig Smith: [00:16:30] So a Medicare supplement plan travels with the individual. So if you got it in New York and you went to Florida, you can just keep the plan. Medicare Advantage Plans or Part C are definitely more area based.

[00:16:42] Craig Smith: like in Nassau County, or Suffolk County, the plans could be different. You know, in Palm Beach County or Broward County in Florida, the plans could be different. So if you move from say, New York to to Florida, first of all, you need to change your information with Social Security, and then once that’s done, then we would have to look at the plans available in your area and change to those plans.

[00:17:02] Larry Heller: You can only change those once a year. So if you move the beginning of the year, could you change it or are you stuck with that plan until the open enrollment period? 

[00:17:11] Craig Smith: Yeah. Well there’s what they call special election periods, so moving from one zip code to another zip code, which is outside your plans area, which automatically qualifies you the opportunity to make a change.

[00:17:22] Craig Smith: Right. You’re until October, 

[00:17:23] Larry Heller: and if and if you’re kind of a snowbird where you spend half the year in the north and half the year in the south. I guess then for that it probably a Medicare supplement plan may be a better alternative. 

[00:17:36] Craig Smith: No, because there are Medicare Advantage plans that’ll cover you in New York.

[00:17:39] Craig Smith: They’ll cover you in Florida. They cover you in multiple states. They have, each company calls it their own name, but it gives you the opportunity to use it for six to 12 months in that particular state, so you don’t have to change anything. Yeah. Great. Yeah. Which is important. 

[00:17:56] Larry Heller: Yep. No, this is all great information.

[00:17:58] Larry Heller: Any kind of final [00:18:00] words, anything else on Medicare that we haven’t talked about that you like, think the audience would get an interest of? 

[00:18:07] Craig Smith: Yeah. It’s important that you speak to somebody that can represent all the plans in your area. If you call just the number you see on the commercial from the carrier, they’re typically just gonna represent their plan.

[00:18:20] Craig Smith: They’re not gonna talk to you about the competition ’cause they don’t want you to sign up with them. So it’s always good to speak to somebody ’cause it’s unbiased. You know, we get compensated from the insurance company. Doesn’t cost you any more to work with a local agent and they’ll review all the plans in your area instead of just focusing on one plan.

[00:18:37] Craig Smith: Hmm. Great, 

[00:18:38] Larry Heller: great, So Craig, if somebody wants to reach out to you and needs to reach out to you, where is the best way that they can contact you? 

[00:18:46] Craig Smith: They can call me, uh, or text me at 9 1 7 7 4 0 1 8 9 5 or they can send us an email to craigSmith@csmedicare.net. And of course you can find us online@csmithinsurance.com.

[00:19:04] Craig Smith: But just Google Craig Smith Insurance Group and you’ll find this as well. 

[00:19:08] Larry Heller: Craig. That’s great. Craig, thank you so much for joining us today. This has been, very valuable information. I know with all of our clients that are gonna be turning 65 in the next few months, um, we’re gonna send them out this podcast so they’ll have the podcast, but we’ll also send them out, contact information and we’ll have some conversations with them well in advance so they [00:19:30] make sure that they get the best possible solution for themselves.

[00:19:34] Larry Heller: And if anyone needs to reach out to us as far as financial planning and investment management, they can reach us at 6 3 1 2 4 8 3600 or just go right to our website, hellerwealthmanagement.com and you can click on the Schedule a call and one of our certified financial planners will gladly speak to you.

[00:19:54] Larry Heller: so Craig, thanks again. And I’m Larry Heller for Hell 

[00:19:58] Craig Smith: Thanks, Larry. Take care.