Transcription:

Episode 13 – Medicare Breakdown with Special Guest Matt Boyle

00:12:11

Announcer: This is Blue Money, a finance podcast made for cops by cops. With us, you know your money safe. Lieutenant Jim Donnelley of the Bensalem and police department and cohost Kevin McGarry of Valley Financial Group, come together to help protect and serve your financial needs. This is Blue Money.

Jim Donnelley: I want to welcome everyone back to the Blue Money Podcast. This is Jim Donnelley. I’m here at my cohost, Kevin McGarry.

Kevin McGarry: Jimmy.

Jim Donnelley: And on today’s episode we’re going to have a special guest, Matt Boyle. He’s the Vice President of Life and Health Solutions and Centered Insurance Solutions. And Kevin, I thought it was important to have Matt on the show today because we’re doing these portfolio overviews with officers, a lot of them struggling, not knowing their post-retirement medical and how to get Medicare. A lot of facts about it. So, what do you see about Kevin when we look at these guys?

Kevin McGarry: Like when we sit down with our clients, we know, Fidelity just put out a stat, most updated numbers that the average 65 year old couple’s going to spend around $315,000 in medical costs and retirement. So, what we’re doing planning and it’s social security planning and Medicare planning or health healthcare planning, it is really important to get it right. So, we partner up with firms like Matt in the center and they help our clients find the right solutions with all these options in this ever changing environment. So, we’re glad to hear Mattie, thank you for joining us, but just even getting started with Medicare, how do we begin? How do we apply for it?

Matt Boyle: Yeah. Thanks guys. Thanks for having me today to discuss this important but complex topic. So, we’re going to talk about Medicare, what’s level set and on what Medicare is and that’s the federally funded program offering insurance benefits to those 65 and older with certain exceptions. But today we’re going to focus on those that are approaching age 65. And it’s a critical time to prepare and understand what your options are and how you effectively ensure that your health insurance stays and remains covered whether you’re leaving your employer job or just approaching that age and want to understand your options within Medicare. So, let’s start out talking about your initial enrollment period, which is a seventh month period surrounding your 65th birthday. So, you have three months in advance of turning 65 to enroll in Medicare. You have the month in which you turn 65 and you have three months following your 65th birthday that encompasses your initial enrollment period. You’ll never be effective in advance of that first of the month in which you turn 65, but you certainly can and should plan in advance of turning 65.

Jim Donnelley: Now what happens, Matt, if you miss it? You miss that window of the three months prior or three months after and I just didn’t realize had to do it. Is there any penalties or what happens with that for someone that missed it? Can I get back into it?

Matt Boyle: Extremely important question, Jim. So, you have that initial enrollment period. There’s certain circumstances in which you may defer Medicare if you are covered through your employer or your spouse’s employer. But that aside, if you don’t have that option, don’t have that creditable coverage, you can incur lifetime penalties for not enrolling in part B, which has a deductible associated with it, or Part D, which is the prescription drug plan. If you do not enroll in either of those during your initial enrollment period.

Kevin McGarry: And Jim, that’s pretty important because we have a lot of clients there waiting to take Social Security later a full retirement age, which is past the age of 65. So, a lot of people don’t realize that they think it turns on with Social security when you apply for social security. Like, if I apply for Social security early Math 62 63, what happens with my Medicare there? 

Matt Boyle: If you are enrolled in Social security, you will be automatically enrolled in parts A and part B via social security. Again, if you have an employer option where you’re covered through your employer or your spouse’s employer, you may want to defer your part B coverage that may be already encompassed in your existing benefits. You may not want to pay that deductible. You would need to reach out to your social security office to turn that off, delay that enrollment into part B.

Jim Donnelley: And I think what’s important, Kev, Matt hit upon to said how complex this issue is. And it was when I knew we were doing this podcast, I looked the online, I’m looking at all the different planes and I see A, B, C, D, there’s all these different parts. My head…

Kevin McGarry: Like Sesame Street.

Jim Donnelley: … alphabet, I just learned the alphabet a little bit ago now that they’re tricking with this stuff. So listen, Mattie, that’s what I’m trying to tell guys. What do we look at when there’s so many different options out there? What do you see a lot? Why is there so many? What do you see?

Matt Boyle: Yeah, exactly. Yeah, it is confusing. It’s very complex to try to simplify it. You have any Medicare program regardless of what you hear a not supplement, we’re talking Medicare, the original Medicare would be your parts A, which is your hospital benefit. And part B, which is your medical, your doctors your outpatient benefit. Those are the traditional what is included in any Medicare offering that you see. Outside of that you have private insurers that have Medicare options as well. And the most common that you’ll hear is Medicare Advantage. That’s part C. We’ll come back to that in a minute. And the last one is part of this alphabet soup would be part D, which is your prescription drug coverage. Most of part C, that Medicare advantage will include a Part D or prescription drug option. So, 89% of them nationally include that Part D option.

Jim Donnelley: Okay, that makes sense.

Kevin McGarry: I think the big thing too, right now you’re seeing Joe Naman face and all these commercials on TV. It’s overwhelming for people that are in this open enrollment period right now for Medicare planning. Like what do you recommend to clients on not the product or solution, but how do you navigate through this ever changing space at this time?

Matt Boyle: Yeah, so I’d recommend understanding your options related to any coverage that you may have outside of Medicare traditional Medicare to determine if you need additional coverage to really close some of those gaps that come with Medicare.

Kevin McGarry: Matt, on that point, real quick with a lot of law enforcement, Jim, a lot of them are going to need additional options or coverage. 

Jim Donnelley: Absolutely. You might see six, seven Oregons buy different contracts out there. Some people have, I mean life coverage for life. But some mostly we see what eight years?

Kevin McGarry: Eight year.

Jim Donnelley: Tops, right?

Matt Boyle: So, by the time they retire, they’re going to need a full Medicare benefit offering. 

Kevin McGarry: That’s correct. So, you think about Medicare, you have that part A and part B that I was talking about. That is your traditional original Medicare. If you stay with that, which is ministered by the federal government, you’re going to want to look at a Medicare supplement option. You’ll also hear that referred to as Medi-Gap and there’s a lot of options associated with that. Back to what you were talking about with alphabet soup, it’s A through N they’re standardized though. So, a Medicare sub plan for one private insurer is very, it looks exactly the same for another private insurer.

Kevin McGarry: Well for those, could they change year to year?

Matt Boyle: No, no. No, they don’t. On the supplement side. Pricing could change depending on when you’re eligible for it. But the plan is standardized. Now, the alternative to original fee for service is Medicare Advantage. That’s where you’re hearing the Joe Naman. I mean that’s what’s very big right now as we are approaching the annual election period, which runs from October 15^th through December 7^th. That is where folks have the opportunity to evaluate whether it makes sense for them to stay in original Medicare or shift to a Medicare advantage plan, which is a private insurer offering. That includes, like I said, that part A, that part B typically part D, 89%. And then additional value added benefits that original Medicare with a supplement do not offer.

Jim Donnelley: And hey Matt, I got an HSA plan at work, a health savings account. So, I know lot of law enforcement officers have that. How does this affect, can I pay premiums with it? Can I use that money for anything that has associated with Medicare? How’s that work?

Matt Boyle: Yes, Great, great question Jim. So you can, assuming you’re ready to enroll in Medicare, you don’t want to defer it you’re now enrolled, you can leverage those HSA dollars to pay for your part B premium. Any deductibles, co-pay, co-insurance, you can also leverage that to pay for Part D, the prescription drug plan. If you’re buying one of those as well as those Medicare advantage plans that I was talking about. The one thing you cannot leverage your HSA dollars for is to purchase a Medicare supplement plan.

Jim Donnelley: Now, how do you pay for Medicare? So pulmonary social security, can I pay yearly ahead of time? How’s that work for paying these premiums? Yep.

Matt Boyle: So, your original Medicare would have that part A and part B option. Part B has a deductible associated with it. Part A typically would not as long as you have tenures of working with Medicare taxes taken out of your check. But for your Part P deductible, that would come out of your social security check. And for the private insurer options, that would be like your typical health plan coverage where you’re paying a monthly premium to the insurance company.

Kevin McGarry: Matt, at the end of the day, like what would be, for the listeners here today, what would be your checklist in this open enrollment program period right now?

Matt Boyle: Yeah. So, look and understand what’s important to you. Is it doctors? Is it a network? Is it value added benefits? Is it cost? You should be evaluating all of these things because there are a lot of good options out there for you. It may be staying in traditional Medicare with a Medicare supplement option and a part D benefit if your financial situation allows for that. If you’re healthy and you’re looking for lower cost options and you have specific doctors that you want to ensure are in your network, you have to evaluate all of these things. But that’s what’s great. Medicare Advantage is a growing program. 48% of beneficiaries nationally are now enrolled in a Medicare Advantage plan that’s up from 35% just five years ago. Projected to go to 61% in 10 years. So, it’s attractive to a lot of folks to look at that, but it’s not for everyone. You need to understand, what’s important to you and really put those side by side and us at I Center. We’ll love to walk you and your clients through that.

Jim Donnelley: So, when you ask you a little fun fact or question before we leave, who is the first person to ever get Medicare in the US? Come on, let see how smart you guys are?

Kevin McGarry: Aldridge May Fuller.

Jim Donnelley: Wow, look at you, man.

Kevin McGarry: Is that right? 

Jim Donnelley: Impressive. 

Kevin McGarry: Yes, buddy. 

Jim Donnelley: No. It’s Truman. Harry Truman. What? President Truman.

Kevin McGarry: Ah, man, that sounds like an insider deal. 

Jim Donnelley: Many you guys. That’s why Google’s out there, man. Know what I mean? I said I’m want to see how good these guys are. So, I was saving that for the end. Who’s the first person to ever get Medicare? And that was President Harry Truman and his wife. So, letting you know they …

Kevin McGarry: You know what I don’t want to know? Who’s the last person?

Jim Donnelley: That guys going to wrap up the Blue Money podcast. I want to thank everybody for listening. If anyone has any questions, obviously this is a complex topic. Mark Boyle’s information is going to be on the show notes. Please don’t hesitate to reach out to him. The guy has so much to offer. This was just a little clip, we didn’t want to bore people with this complex and drug out topic. So, thanks for listening guys, and be safe out

Kevin McGarry: There. Yeah, be safe and thanks Matt. 

Matt Boyle: Thanks guys.

Announcement: Thanks for listening to Blue Money. To learn more about Jim and Kevin or for free financial assessment, visit valleyfinancial.com or click on the link in the podcast description or show notes. Until next time, safe investing. 

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