Intro (00:01):

Welcome to the Transition to Medicare podcast, brought to you by Giardini Medicare. In each episode, we will take a look at a specific Medicare topic that will help you avoid making mistakes and reduce your stress when navigating the Medicare system.

Joanne (00:19):

If you're transitioning to Medicare, you may be wondering what are some of the biggest mistakes that are made that you should be looking to avoid. In this episode, we're going to talk to you about five potential Medicare mishaps and how you can make sure that they don't happen to you.

Cameron (00:30):

And before we start, we do need to remind everybody here that Joanne and I operate Giardini Medicare, which is an independent insurance agency based out of Southeast Michigan. Although we are based out of Michigan, we do work virtually over the phone to directly help consumers in about 13 states find the right Medicare coverage for them. However, if we don't work in your state, we will connect you with another trusted independent agent that will be able to help you find the coverage that you want. Even if you choose not to work with us, we know that the information in today's podcast will help you have a successful and stress-free transition to Medicare. So, throughout this episode, for each Medicare mishap, we are going to discuss what the problem is with making a specific mistake, and more importantly, how you can avoid all the mishaps discussed in this episode because we know that's really what is important to you. I'll let Joanne go with the first one here and we'll get started. 

Joanne (01:22):

So, we have mishap number one, and this should be number one. The biggest mishap people make is not considering both Medigap and Medicare Advantage plans.

Cameron (01:33):

Yeah, and Medigap, just so everyone knows, we always refer to Medicare supplement plans as Medigap. So, if you hear Joanne or I say Medigap, just know we're talking about Medicare Supplements.

Joanne (01:43):

Yes. So, the problem with that is that there are essentially two main options that people must choose from when they decide on their Medicare coverage. These options, as we just said, are Medicare Advantage and Medigap (aka Medicare supplement). A third option is you can stay with Original Medicare or choose a different type of coverage. But for this episode, we are only focusing on those two choices. Medicare Advantage plans versus Medigap.

Cameron (02:07):

A vast majority of people are just going to choose either Medicare Advantage or Medigap plans. So, that's why we always highlight those as the two main options. Although yes, there are technically other routes you could go.

Joanne (02:18):

We'd be here for two hours if we had to talk about everything. This is just isolating those two decisions, but not considering both options can really make you miss out potentially on certain coverages that might be right for you. You must always remember that in the future you may not be able to go from a Medicare Advantage plan to a Medigap plan. It's better to compare right in the beginning as you're starting Medicare.

Cameron (02:39):

Yeah, Joanne did a good job of just highlighting, what the problem is. I'll talk briefly about how you can avoid this and it's going to be obvious I think, but it's easy to avoid. All you must do is you just simply consider both options before you begin Medicare. Normally you're going to want to look at your Medicare options, about 6 months before you turn 65. Even if you don't plan on starting Medicare at age 65, that can be a great time to at least understand that there are two options, Medigap and Medicare Advantage. What you can do is you can talk to an independent broker like ourselves, and we will help you compare both options right from the get-go. Now, if you do talk to an agent or an agency or whoever it might be out there and they are only showing you one option, let's say it's only Medicare Advantage or only Medicare supplements, you should likely avoid that agency or that person because again, they're not presenting you with both important options and everyone's unique.

Cameron (03:33):

You never know what's going to be right for you. Do your own research. The official Medicare and You handbook does provide a really good contrast of Medicare Advantage versus Medigap plans. So, this is a good starting point just to get the basics and understand that there are both options because we've just heard too many people say, “Well I was never told” or, “I didn't know”. So, we don't want you to fall into that camp. Lastly, besides that, you can also check out social media. Obviously, if you're listening to this podcast, we're going to talk about it in this episode. But you can also look at our YouTube channel if you want to get a more in-depth analysis of Medigap and Medicare Advantage.

Joanne (04:12):

Now, let's go over mishap number two, which is receiving a Medicare penalty. I'll walk you through the problem that you're going to have here potentially if you do get a penalty. The problem with the penalties is that they can last a lifetime. These mistakes, if you make them upfront, will have long-lasting effects. If you say “I didn't know” to the government later when you try and get out of a penalty, it's not going to fly. So, there are a couple of penalties I'm going to talk you through, and then Cameron is going to talk to you about the solution to avoid these penalties. But there's a Part D penalty, D as in drugs. The part D penalty in 2022 is 1% of the national base beneficiary premium. So that's essentially the national average for Part D premium, all the plans.

Joanne (04:53):

And if you go without creditable prescription coverage for more than 63 days, you will be penalized. In 2022, the national base premium was $33.37. So, I'll give you a quick example here. If you go 15 months without having Part D coverage or any other creditable prescription drug coverage, you will have a monthly penalty of approximately $5 per month added to your Part D premium amount. If you enroll in a prescription drug plan with a $10 monthly premium, you would then be paying $15 per month since $5 of that would be the penalty added to your overall Part D premium. Now realize that this is not a penalty you pay one time, that $5 additional penalty will remain with you for a lifetime.

Cameron (05:34):

Yeah. And it's not always $5. I just want to make a point that Joanne was using the example if you go without creditable prescription coverage for 15 months. This can vary. It's going to depend on the number of months you go without coverage. So don't think it's always a $5 per month penalty just for Part D.

Joanne (05:51):

No, we've seen people come back at age 70 or 75 with many, many years without coverage. So, that's why this is on here. Part D is a pretty common penalty in my opinion. The other penalty that we run into is Part B (as in “boy”) penalty. And this one is different. This is going to be a penalty for every 12 months period that you should have had Medicare Part B and you did not. They will assess a 10% penalty. So, here's another example again, just example. But, if you go 29 full months without part B coverage, when you should have had it in place, your part B penalty would be 20%. So that's two full 12-month periods of time and that gives you the 20%. How they assess this is they're looking at the base Medicare premium, which in 2022 is $170.10. In that case, with the 29 months without part B coverage, the penalty would be 20%, or $34. That will be added to your part B premium. That would bring your total monthly premium to $204.10. And again, like the part D penalty, this is a lifetime penalty. So, be very careful with this. Cam, why don't you take it and just walk through how to avoid these penalties?

Cameron (07:04):

Yeah, and real quick, just before I talk about how to avoid this, there is a more in-depth episode we created recently about Medicare penalties. So, if you're trying to figure out these numbers or getting confused because we are throwing out so many numbers, just make sure you tune into that episode, but we'll go into more detail about it. But for now, just so you know, as far as avoiding Medicare penalties, it's just like every other Medicare Mishap. The first thing you must do is understand that penalties are possible. So, you must understand that there are penalties in order to avoid them in the first place. Even if you don't plan on starting Medicare at 65, just take some time to familiarize yourself with potential penalties, reach out to a broker, and reach out to somebody you trust to guide you with Medicare advice before you turn 65.

Cameron (07:49):

The broker, in this situation, could say whether you would be penalized or not, what you're doing is correct and you should not be penalized. The biggest thing to do to avoid the penalty is to have creditable coverage Joanne mentioned several times. Creditable coverage essentially means that you have coverage that is considered as good or better than what Medicare has to offer. That's not an exact definition. So you know, don't quote me on that, but it gives you an idea of what we mean when we talk about creditable coverage. And then next I'll just give a couple of examples of Part D and Part B creditable coverage that will help you avoid penalties. So, Part B creditable coverage only consists of active employer coverage, from yourself or a spouse's current employment. If you're not covered by active employer coverage past age 65, make sure you talk to somebody asap, like a broker that can help you make sure you avoid penalties, compare options, and help enroll in Medicare if necessary.

Cameron (08:48):

Then on the other side with Part D, the prescription coverage, there are a bit more options for Part D creditable coverage. So here we're going to talk about a couple of those. And again, this list is not all-inclusive. These are just a couple of the major things. There's active employer coverage that has creditable prescription coverage. Make sure you confirm with your employer that their specific drug coverage meets this definition. There's also retiree coverage from a former employer that can do the same thing. In addition, there is COBRA. You can also qualify for VA healthcare, TRICARE for Life, champ VA coverage, and even prescription coverage through Indian Health Services. So those are a couple of ways where if you have any of those coverages, you should be able to avoid a Part D penalty in the future. Then what can you do if you are assessed a penalty? I'll have Joanne talk about that.

Joanne (09:39):

Yeah, the short answer is, just do anything you can, everything you can to appeal that. If you want to learn more about Medicare penalties and how to appeal that, make sure you're checking out the recent podcast. Cameron already referenced the penalties. We go into a lot more detail there.

Cameron (09:51):

Yeah, and now we'll go over mishap number three this is Joanne’s favorite or least favorite, however, you want to look at it.

Joanne (09:58):

It’s kind of because it's so misunderstood. And then we do have people arguing with us and we'll talk about why they argue this. But the super important mishap number 3 is not understanding how pre-existing health conditions can impact you. So why is this such a problem? Why do people not believe this? Because a lot of people know about and have lived through Affordable Care Act Coverage It changed a lot of things when it came to health insurance. One of the biggest changes was the fact that it prevented individual health insurance carriers from denying health insurance to people with pre-existing conditions. The part that confuses so many people is the fact that these same protections don't extend to Medicare and, specifically to Medigap plans. So, in most circumstances, and in most states, if you try to change from one Medigap plan to another during the year, or if you try to change from a Medicare Advantage plan over to a Medicare supplement, you will have to qualify for the new Medigap plan based on your current and recent health status. You can be denied new Medigap coverage if you cannot pass the insurance company's health underwriting. This is super important, and people just don't understand this.

Cameron (11:10):

Yeah, and as Joanne said, that applies to most states and most circumstances, yes, there are going to be exceptions. So, if you're listening in a state where you've been told you can change plans without underwriting, that may be the case and we'll link to that in the description of this episode. In a vast majority of states, if you want to get a Medigap plan in the future, you will have to qualify based on your current health and you certainly can and might be denied that coverage. But how can you avoid it? You know, that's why everyone's thinking. The best way to avoid it is to know which pre-existing conditions you may have and how those can impact enrolling into Medigap coverage in the future.

Cameron (11:56):

And not only just understanding what conditions you have, but just understanding that yes, this is an issue. Yes, this is something that can exclude you from Medigap coverage. So, it kind of ties into mishap number one, if you're not comparing Medigap to Medicare Advantage, then you don't even think about how pre-existing conditions can impact you in the future. So again, look at both options. Understand that the decision you make now can have long-lasting impacts. When you first start Part B, that is generally the time when you really want to consider all these options. And that is because you're going to have access to Medigap open enrollment when you first start Part B. So again, that is the first six months that you are enrolled in Part B of Medicare at age 65 or older. And that is the time when you can pick any Medigap plan with no health questions, no exclusions, or pre-existing conditions.

Cameron (12:49):

If you have a pre-existing condition that would normally disqualify you, you can apply during your first six months on Part B and get that Medigap plan with no health questions. Now that may or may not be the last chance you have to get a plan. We don't want to act like we're fear-mongering here and say, if you don't act now, you're never going to get it. But understand it is certainly a possibility. And again, we will link to the different States with unique rules when it comes to underwriting and all of this in the description of the show. Now with that out of the way, we'll go away from Joanne's favorite topic to another Medicare mishap.

Joanne (13:21):

Yeah, this one's number four, which is missing enrollment windows. So, I will talk about how if you miss certain enrollment windows, what kind of impact that could have on you. Many people do struggle to understand that there are a lot of different enrollment periods that Medicare has created for the consumer. They have set rules and regulations when it comes to when beneficiaries can enroll or when they can change coverage. If you miss these timelines, it can, and it will result in gaps in coverage, lifetime monetary penalties, and things like what we talked about. Also, the inability to change plans and you're stuck for another year, things like that. There are many different enrollment periods that may or may not apply to you. Next, we will list some of these. 

Cameron (13:58):

And we'll talk about this in an upcoming episode. So, if you want more details on these enrollment periods, just tune into that one.

Joanne (14:04):

Right? Because there are too many, there's something called an IEP, which is an initial election period. There's a Part B special election period, an SEP. And when we talk about SEPs, that can mean different things for Medicare Advantage plans and for prescription drug plans, there's the Medigap open enrollment period. So, how do you handle that? There's the Annual Election Period that's in October, everybody knows about that one for the most part, but then there's a Medicare Advantage Open Enrollment Period.

Cameron (14:30):

Yeah, you can just see why this becomes overwhelming when you list out all the different enrollment periods. So of course I feel like I keep saying the same thing here, but when it comes to Medicare, ignorance is not bliss. I know everyone wants to avoid talking about insurance and an upcoming big decision when you're making that transition to Medicare. But understand that there are different Medicare enrollment periods and just speak with somebody to say, “Hey, which ones actually matter to me?” Now if you're turning 65, or maybe you're 70 years old and you've been on Medicare for years, don't worry about Initial Enrollment Periods. Don't worry about the Medigap Open Enrollment Period because not everything is going to impact you at all times on Medicare. So you just have to know which one does and does not impact you at a given time and figure out how to navigate those different enrollment periods. Of course, that is where an independent broker like ourselves or somebody else can help you. And now we'll move on to the last mishap, which is not checking your coverage every year. And of course, I'll let Joanne tell you why that is a problem.

Joanne (15:31):

So, once you make your transition into the Medicare system, it can be easy to feel like you know you've accomplished it, you've arrived, you're done forever, and you don't have to check on anything on an annual basis. Well, unfortunately, that's not true. According to the Kaiser Family Foundation in 2019, 81% (which is very high) of Medicare Advantage beneficiaries did not compare their current prescription coverage to the prescription coverage offered by a different Medicare Advantage plans prescription coverage for the following year, 72% (which is also very high) of standalone Part D enrollees did not compare their current Part D coverage to even another company's Part D plan. This is problematic from one year to the next because Part D plans can, and they have tripled in monthly premiums. So if you're not looking at options, this can have a really large financial impact.

Joanne (16:20):

Not only can your coverage details change, such as your copays, your premiums, out of pocket costs, all those things can change, but also your healthcare needs change, and they certainly do change. So, you may have different prescriptions and different medical conditions from one year to the next as you would anticipate, right? Medicare Advantage plans and prescription drug plans are annual contracts, so the cost and the coverage will typically change every calendar year, even if your health and your prescriptions don't change. These plans will change every year. In September your annual notice of change will come from these carriers, and this is the time you should be starting to check your Medicare Advantage coverage (and Part D coverage). Plans can change providers over time. They can change which doctors, dentists, eye doctors (and more) are in-network or out-of-network.

Joanne (17:03):

Also, your Part D, your standalone Part D plans for prescriptions, can change which pharmacy is preferred. They can take your medications off the formulary. All those things can change. Now a side note about Medicare Supplements, they are guaranteed renewable lifetime contracts. The monthly premiums that you pay for the coverage can and will typically increase over time. So as years go by, it can be useful to shop for other Medigaps plans to see if you can save. However, they're not annual contracts like the prescription drug plan and the Medicare Advantage plans.

Cameron (17:33):

Yeah, that's important to point out. You can always shop your Medigap plan throughout the year. Don't think you just have to do it in the fall. We will have an upcoming episode about what to expect for the Annual Election Period and how you can use it to your advantage coming up. Let's talk about how you can avoid this mishap of not checking your coverage options every year. The easiest thing and the best thing to do is just shop for your coverage. Look at your Medicare Advantage plan, look at the annual notice of the change (ANOC), as Joanne mentioned, look at your drug coverage, your Medigap, whatever it may be. Just look at what you have and just take a moment to see what is out there on the market. An agent, an independent broker, they're going to be your best bet to compare all the options on the market.

Cameron (18:16):

And I think the biggest thing to keep in mind here is that just because you're looking doesn't mean you have to change. We're not saying to avoid this mishap, you always must be changing your coverage, doctors, and prescriptions. You know, that's where it seems overwhelming where you think, okay, every year I'm going to go in January, I'm going to have to find a new doctor, a new dentist, whatever it may be. We're just simply saying, to double-check to make sure your coverage still works for you for next year. Don't be one of the 70% or 80% of people that do nothing at all. Just know what the changes are going to be and make sure you're okay with those changes. Then if you're not, you can make the switch. I would say it's not even that common for people to make a change once they look at options.

Joanne (18:54):

It's also not that difficult or complicated. It is important to check these because if all of a sudden January rolls around and you didn't check your prescription drug plan and one of your drugs isn't covered now, or your premium tripled as we mentioned, you're stuck. You are likely stuck for the year because you can't change prescription drug plans until the following Annual Election Period.

Cameron (19:13):

Outside of special enrollment periods, that might be more limited.

Joanne (19:17):

Yes.

Cameron (19:17):

Now with all that being said, keep in mind that we don't just recommend you switch for a small change or the latest and greatest benefit that you see being advertised on tv. There's always going to be something out there that seems better on paper, but really take the time and just make sure that it makes sense for you and the savings or benefits are worth it as the plan meets your needs, not just one thing that you fixate on and change coverage because of that. One of the most common things we hear from our clients transitioning to Medicare is they just want to avoid making a mistake. They want to avoid mishaps that might have any long-term impact. Luckily, as you've heard today, Medicare mishaps are completely avoidable when you take the time to learn the potential pitfalls ahead of time.

Cameron (20:01):

Make sure to tune into the other episodes of our podcast and subscribe to our podcast on your podcast app. Please leave us a review. You can check out our YouTube channel by searching Giardini Medicare. Lastly, if you would like to reach out to us directly, you can send us an email at info@gmedicareteam.com or schedule a phone call on our website, gmedicareteam.com or give us a call at (248) 871-7756. But thank you very much for listening to today's episode. We hope you avoid any mishaps in the future and have a good day.

Intro (20:36):

Thanks for listening to the Transition to Medicare podcast. To find more Medicare-related information from us, you can search Giardini Medicare on YouTube or visit our website@gmedicareteam.com.