5 Conditions That Guarantee You Won’t Pass Underwriting

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Medigap underwriting can decide whether you’re approved for a Medicare Supplement plan.

In this episode, one of our licensed Medicare guides, Ethan Salvino, joins us to break down five health conditions that can cause someone to fail underwriting when applying outside their guaranteed window.

If you’re thinking about moving from Medicare Advantage to a Supplement, or switching Medigap plans, this is one you’ll want to understand first.

Watch before you assume you can change plans later.

We look forward to taking your calls! 

Transcript

0:03

Medicare supplement plans generally require you to answer some health questions in order to get approved for it. Meaning the insurance company can deny you based upon how good or bad your health is. Yes, there is one exception, which we're gonna talk about that, but uh talk about that today. But generally speaking, you gotta be somewhat healthy in order to get a Medicare supplement plan. Medicare supplement plan meaning like a plan G or a plan N. You've probably heard of those. I'm not talking about Medicare Advantage plans. We're talking about Medicare supplements, plan G, Plan N, maybe plan F if you got those. You generally have to go uh through a health underwriting process. There are five health conditions that really will probably knock you out from being able to get one of these Medicare supplement plans. Uh welcome to Medicare School Daily. I'm joined in the studio by one of our agents here at MedicareSchool.com. His name is Ethan Salvino. Welcome. Thank you. Thank you for having me today. Yeah, glad to have you. My dad is traveling, and so we are having uh some of our agents fill in for him. It gives you all an opportunity to see the kind of people that you will uh talk to when you uh call into MedicareSchool.com to get assistance with your Medicare plan. So thank you for being with us. Let's talk about these Medicare supplement underwriting things. We talked about all five. We've got a lot of education that you guys are going to learn today. So what's the probably the first, the biggest one? Yeah, so the big one is the C-word, cancer. Okay. There's so many different types, there's so many different stages. When an insurance company is looking at, are you healthy enough to get into a supplemental plan? You know, our view on health is a lot different from a large insurance company who's not in the business of losing money, obviously. So with these insurance companies, their view on healthy is going to be a lot more stringent than ours are. So with cancer, it's pretty much a knockout with most insurance companies. Are there any kinds of cancer that aren't? You know what I've seen is skin cancer is pretty much a hit or miss. You've got metastatic melanoma. That's a big no with a lot of insurance companies. You got the squamous cell, the basal cell. Okay. They can get those off within one dermatologist visit. Basal cell's generally not a problem. Yeah, generally not. Squamous? Not really, okay. From what I've seen. Um again, kind of hit or miss depending on the insurance companies. Um but when you're looking at cancer for the most part, it's typically a look back. From what I've seen, it's generally about five years. Okay. So if you've had a serious form of cancer maybe seven, eight years ago. You've been in remission, haven't taken any, you know, very expensive medications since then. A lot of insurance companies don't know. The treatment is over. Exactly. So nothing ongoing, everything's under control. Some insurance companies can be a little bit more lenient. Um active cancer outside of the squamous cell, the basal cell, surely a knockout. Yeah, active, absolutely not. Um so there's a look back period. So let's play this out. So let's say you're, you know, a year and a half out of cancer treatment, probably still gonna get denied. For the most seven, five, five to seven years. I think there's some carriers that have like a three-year look back, if I'm not mistaken. Maybe I'm wrong on that. A few of those, yeah. Yeah. And it's probably dependent a little bit on type. But generally, cancer, you're not gonna be able to get that Medicare supplement plan um outside of that special period, which we'll talk about in a minute. Okay. Cancer uh stroke is another one you mentioned. So let's talk about that a little bit. Yeah, with strokes, um generally knockout with most carriers. Again, all that we're gonna go through today generally does have that look back clause. Um with any stroke. Even a stroke. Okay. Yes. So if you've had stroke, I think it's closer to 10 years look back on that, because there's a lot more treatment that comes after it with physical therapy, um, getting things together outside of massive. Some people never fully, you know, recover from that as well. Exactly. Uh there's I know mini strokes and I guess full like TAAs they call them, and then I guess a regular stroke. Is there any difference in how those are looked at? Not necessarily. Um one of the leading questions when I'm writing an application through medical underwriting is in the past five years, have you had any instance of a uh stroke or transen ischemic attack? So they put them all by name. Exactly. Okay. So whether it doesn't matter. Yeah, whether it's a huge stroke that you lose all function um your body or whatever. Exactly, or just a quick stroke that you recover from maybe in a month or two, um, these insurance companies are gonna ding that pretty hard. Okay. Uh number three. So that's one cancer, two stroke. What's the third one here? Third one will be heart attack. Okay. Um again, kind of going off of that look back clause. Um, they're looking at medications pretty hard here. Okay. So if you're taking um eloquist because of that heart attack, blood thinner, um, they're gonna see that eloquist and they're gonna immediately go to the fact that, you know, have you had any heart attacks in the past? Have you had a lot of people? Yeah, if you're on eloquist, you've obviously have heart issues. Exactly. Um when it comes to atrial fibrillation, okay. Not necessarily a heart attack, but maybe a heart murmur or atrial fibrillation, um, I've noticed that a lot of insurance companies are really focused on how it's controlled. Okay. You know, by the are you taking three or more medications to control your blood pressure, to control your heart disease? Um, are you just taking one? Maybe a you know, lecenopril, just the generic medications. Um, how is your atrial fibrillation or maybe your I want to say minor heart condition, how is that affecting your day-to-day life? Is there a look back period on this? Like if you had a heart attack in the last two years, probably not. Yeah, generally not. Um they just ask that question blatantly there. If you answer yes to that question, actually, it automatically just ends the application. Oh, okay. So it's really not a, you know, I want to fight for this, I'm gonna tell the insurance company, have my doctor call them and let them know. It's just a know that if you do answer yes. Yeah, okay. Which I would I do want to talk about the application process here in a minute. Okay, uh heart attack number f well uh other than eloquist, are there any other big medications that you see get flagged pretty consistently? Uh-huh. I know that's the main one. Trevor Burrus, Jr. Yeah, that's the that's the big one. Um even with generic medications, I've seen them get flagged. Okay. Um I had a few clients who were taking licinopril, amlodapine, hydrochlorothiacy, a few different just generic. All of them together though. Yeah, all of them together in the same day. And if they're taking four or five different generic medications, four heart-related conditions. Exactly. That's looked at the same as eloquist. Yeah. Interesting. Okay. Uh okay. Number four. Uh in terms of things that if you have, you're probably gonna get declined. What is it? Renal failure. Okay. So kidney. Yeah. So kidney disease, chronic conditions. I've seen Do you have to be on dialysis? Not necessarily. Okay. Um I've had a few underwritten applications with one carrier that asks, do you have any sort of kidney disease or kidney failure? Okay. I've had another one that asks, Do you require dialysis? Okay. And then another one that specifically stated, do you have kidney disease that stages three, four, four, five. I think it goes out of five. So stages one and two, you can get through with some carriers. Oh wow. If you're not taking dialysis actively, which I found. So it's always fun kind of navigating, fitting a piece in the puzzle, like what carrier is going to accept you based off of these conditions or that conditions. Multitude of options. But yeah, and I think that's one of the values of maybe working with somebody like you or MedicareSchool.com. Yeah, my dad always uses this term field underwriting, which is I think a funny term, but it really means like we have this whole host of carriers that we can go to, and you do kind of learn over time, and then we've got special tools, we can put in likely health conditions, right? Or and it'll say, hey, this is or you know, talk to your your cohort of people around you, who who can get me through who which companies likely to accept somebody who had cancer five years ago. And you know, and so there's just different ways. But working with somebody like uh uh Ethan or Medicare School.com, you have the opportunity to kind of shop this varying array of what an insurance company will accept. It's not just cut and dry like all companies will decline you if you have X. Yeah. There is some like give and take. Obviously, you're undergoing cancer treatment like right now, there's not gonna be any career that takes you. Had a heart attack six months ago, probably no carrier that's gonna take you. Wait a few more years on that. Yeah, exactly. But beyond that you know, two, three year mark, I think there's some give and take. Your medications matter, how many are we taking, all that sort of stuff. Okay, cancer stroke, heart attack, renal failure, and then what's the fifth? Fifth one that I've seen more often than not, and it's actually one of the first questions that they do ask on an underwritten application. Ding ding, probably probably a reason it's number one. Just so we don't you know go through a full application, run it in, and it's instantly declined. They're looking at are you dependent on a walker wheelchair or any motorized mobility device? Okay. Because on a Medicare supplement plan, if they're paying 20 percent of every bill, yeah, and they have to pick up the durable medical equipment of the wheelchair, the motorized mobility device, obviously there's a more underlying cause. Oh, yeah. So that's a pretty good indication there's something going on that's rather serious. Exactly. And like I said, insurance companies aren't in the business of losing money. Yeah. They're looking for those big ticket items right at the start. Sure. So that's a big, big no-no with a lot of carriers, which you know it's been sad sometimes. I've had folks who use a walker, but they're as healthy as a horse. Yeah. And they can't make it through underwriting. I've had some other folks who, I was surprised, made it through underwriting. So it all just depends. But yeah, there's a lot of those that come with, you know, the wheelchair, the walker, the cane, that it's just instant denial. Yeah. Makes sense. So the approval or the underwriting process, we've talked about these five conditions. Yeah. Uh I want to talk about uh the kind of that process for, you know, you call, you talk, you get quotes. Walk us through from from beginning to end here um how what someone can expect. Yeah. So when you're calling in trying to underwrite into a new policy, we've got to make sure that it actually makes sense. So like I said, we're not just gonna be looking for the lowest rate on the entire market. We still want to find a very stable carrier, just so you don't have to worry about underwriting in the future, making sure that your rates aren't increasing at 30, 40 percent a year. Aaron Powell There's a there's a there's a company, I think that they're called like Polish Falcons or something. They offer a Medicare supplement. And I I don't know anything about them. I think it's a funny name, Polish Falcon. I don't know. Never heard of Medicare. Yeah, it's like but I think it's a pretty small insurance carrier. So um maybe they're a great carrier. I don't want to like disparage them. I've just just recently heard of them. And uh I think to your point, is like maybe it's not always the cheapest rate is the one that you want because if something changes your health in your health down the road and you're with a tiny insurance carrier that raises drastically in price, that may not be a good thing. So I'll I'll not cut in. So you call in, you get your quotes. Yeah, so when we find the right plan, that's a good price, making sure that through the field underwriting, there's no major health issues. We think you're a good candidate. We would just walk through the underwritten application. Typically, it's the exact same application that these clients have had before, but with health questions. So just the general street address, legal name, all that good stuff, Medicare number. But typically, the average amount of questions that are asked are about 30 to 40 health questions. So it can be a little strenuous. Some insurance though, right? That's right. Yeah. Go right through them and um we make it fun. We try and make Medicare very enjoyable on every call. It's as enjoyable as it can be. That's right. Any federal plan. Um but after the 30 to 40 health questions, sometimes carriers actually ask about your medications. Prescriptions, yeah. Not just your medications, but have you seen any specialists in the past 24 months? What are their phone numbers? Sometimes they actually call doctors. Is that every carrier or just not every carrier? I feel like that's becoming a little more rare. Trevor Burrus, Jr. It is. Like back in the day, like 10 years ago, it was every application. Oh, yeah. It was like super stringent. Now, two years ago. Yeah, now they're using a little more automated. So let's talk to that maybe. Yes. Um with the recent surge in AI, we've actually seen a couple of insurance carriers do what's called a Milliman report. Yeah. And instead of asking the questions directly, answering yes or no, a lot of insurance companies can find that through your Medicare number. Yeah. They can pull recent health history in the past five to ten years and run their own report rather than feel like. Which is nice because I think that also gives you the old process, like back in the day, every application, every single time, ask the health questions, get the doctors, put down the medications, fax the application in. It would sit there for two to four weeks for a human to look at it, and then the human would be like, yeah or no. And then sometimes they'd even want to do an outbound call to the, you know, because they had some clarified questions, or they'd get back with us to the agent saying, you know, is this, you know, t tell me a little bit more about this, that, or the other. And then it would go back to the human underwriter, would wait and cue again, and then finally we'd get approval. Like that was how it worked for a long time. Got to plan far in advance. Yeah, yeah. And now I feel like what I'm hearing is we can we can put in a Medicare number, maybe a social security number, goes into the interwebs, pulls all the information down, runs it against whatever that carrier's risk profile is and says approve or decline. Right? Just like that. Yeah. It's fast. Yeah, and it usually takes about uh surprisingly maybe two to three minutes to process. Okay. So you can know, so you call in, get quotes, make the application, boom. Yeah. You know if you can save money. Exactly. It was actually, I remember I think it was the 29th to the 30th of of a month. Okay. And we were going with a carrier who actually did the automated reporting. Yeah. And I was like, hey, let's just try it for next month, see if we can see save money sooner. And luckily it went through very quickly. That's cool. When to switch? When can people make switches? Because if you're on a Medicare supplement plan, a lot of people think you gotta wait. And you gotta do this a special time. So let's speak to that. Yeah, so the most common misconception is that if you're in a Medicare supplement policy, you have to wait until that annual enrollment period for Medicare, October 15th through December 2nd. So a lot of people do, or December 7th, yeah. So a lot of people do end up waiting, um, which of course, you know, the longer you wait, the more risk you have of contracting a serious illness, whatever it is. Um you can actually switch at any time if you're coming from a supplemental policy. Supplement policies being private insurance, you can switch January 1 through December 31. There's no enrollment period just because you have to qualify. Yeah. A lot of people think you gotta wait till the end of the year. Start on January 1st. It's not true. We're changing people every day. Trevor Burrus, Jr. That's right. I actually did one just yesterday. So Yeah, so but the I think the key thing was there, they were on a supplement plan switching to another Medicare supplement plan. So then you can do it anytime. What if you're on a Medicare Advantage right now and you want to get to a Medicare supplement? Yeah, so with a Medicare Advantage plan, um, the key is always the drug coverage, is what I always tell my clients. So a Medicare Advantage plan has that drug coverage built inside. So you do need an enrollment period to make a switch, technically, to another prescription drug plan, Part D, which is separate, it's added on to your supplemental policy. That's when you have to wait until the annual enrollment period. Okay. October 15th through December 7th. So if you underwrote out of a Medicare Advantage plan into a supplemental policy, and then you end up making it through to the supplemental plan, you cancel out your advantage plan, you have no drug coverage. Right. And you have to wait until the annual enrollment period. It gets all messy. So you do have to wait until the end of the year moving forward. Yeah, the time to do that is end of the year, but you can also do it beginning of the year, right? Beginning of the year during the open enrollment period. Yeah. Um typically that's for people who feel like they did make a mistake during the annual enrollment period. Medicare allows them to make another switch at that time. And they can go from MA to MA or Medicare Advantage to Medicare Advantage. They can go from Medicare Advantage to um Medicare supplement. Correct. They just can't go supplement to an advantage at that point. So your time to do it really if you're on a Medicare Advantage plan is basically from October 15th through March 31st. Correct. If you're on a Medicare Advantage plan. If you're on a Medicare Sub, do it whenever. Exactly. There's not there's nothing. Yeah, when you'd like. Okay. What happens if you are untruthful on a call? Meaning you've lied about something and for some reason it didn't get flagged. Yeah. Now it's a little bit harder. Yeah. Probably back in the day it was much easier. Yeah. You can just take it at that point. Um yeah, if you are untruthful on an application, you say you don't have a critical illness when you do have a critical illness. Um, there will be on the back end uh denial of coverage. Okay. Because uh when you're signing the application, there's a question that comes up on the uh underwritten application. I hereby attest that I have been truthful on this application, that all my answers are correct. And if you agree to that, you're agreeing that you know they're taking you on with any pre-existing condition that you may have through their report, through what you've answered. And if they don't have that pre-existing condition stated or answered with the questions that they specifically ask, um they can deny coverage for that specific thing that someone may have lied about. Yeah. Which uh timeline-wise, I haven't had a client do that. I've I've I mean, I don't think I've ever seen that really happen. I mean, I guess we've always been truthful in application. So yeah. But just getting down to the nitty-gritty, but as for how you know the one might say statute of limitations on that. Not exactly sure. Um I've heard maybe a six-month clause, I've heard lifetime. Um but we always just say say the tell the truth, of course they can say is tell the truth, nothing about the truth. That's right. That sort of stuff. Okay. There is a six-month period um that everyone has, and we alluded it to it uh on a on a call just a moment ago. So all of these underwriting things, cancer stroke, heart attack, renal failure, dependence on walker, wheel wheelchair cane, all of that, we can throw out the window and anyone can get a Medicare supplement plan when. It's in your first six months of your Medicare Part B enrollment date. Okay. Which typically that's your 65th birth month, unless you're in a special enrollment period leaving employer coverage. So from the moment that your Part B begins, counting that month, you do get six months to join a supplemental plan with no health questions asked. Trevor Burrus, Jr. Could you switch around within that six months? Like let's say you start with a G and want to go to an N and then back to a G with a different carrier. Can you do all that? You definitely can. Okay. So that's it. All they're looking at is just when did Part B start? Exactly. And that's it. It doesn't matter if you came from previous coverage, if you know you went two years without coverage, or maybe like a Christian health sharing ministry plan, they could care less as long as your Part B begins, you get a guaranteed acceptance. Okay. Um now that's different from guaranteed issuance that we talked about with the paperwork and everything. Birthday rule, all that sort of stuff. Exactly. This is just guaranteed acceptance straight into the policy. Just you get it. Even if you have stage four cancer, they have to let you in. There's no way they can deny you. Not at all. Okay. So a lot of people think that they're stuck. Like they say they choose a plan G with X carrier and it's super overpriced. They're like, my broker got me with this. It started the beginning of the month. I guess I have to write it out. Well, you get those six months to check again. Yeah. So if you've if you've enrolled in a plan, maybe you've got uh a plan that's just outside of the market because it's what the person you talk to, and you want to shop that around, as long as you're within six months of your Medicare Part B start date, you can do that. No health questions asked. You could switch every month. That would be weird. But I talked to someone yesterday. She uh started Medicare in April. She started with a plan N, then she decided she wanted a plan G, so she switched to that. Of course, no medical questions or medical underwriting at all. Trevor Burrus, Jr. You got to make sure you cancel the other one. Yeah, yeah, yeah. Then you're paying double. Okay, so that actually brings up an interesting question. So we've got this a lot of times. Um if you are on a Medicare supplement plan and you go apply for another one, does that put your current plan in jeopardy at all? Or are they gonna be like, oh, we found this in the process and that gets reported back or talk through all that? Trevor Burrus, Jr. It's a great question. Um and I actually do get that a lot. So if you underwrite, you can actually underwrite up to three months in advance from what I found. I've had plenty of clients who uh maybe they needed some more time to think about do I really want this new supplemental plan? It's free to underwrite, to go through all the health questions, to submit an application. And you're not really committing until Exactly. So if they approve you, they're gonna approve you. Yeah. Let's just say it's set to go into effect in September. Right. And we're talking right now in June. Well, the plan's gonna go into effect. They're gonna send you your cards and everything, but it does not affect your other coverage. Right. You still have to choose one or the other. Which one to cancel, which one to keep. So it's no harm in like making application, seeing if you get approved, seeing if you can save some money. That's right. And they're not gonna notify your other insurance carrier if you got declined. That's right. It's just nothing happens. You don't they don't tell it, they don't know. And then you do have to manually cancel your old plan should you choose to want the new plan. It doesn't auto-knockout or anything like that. You will have two plans that you're paying for unless you cancel the old plan. But generally we tell people don't cancel the old plan until you've got your new cards in hand. Until it's approved, cards in hand, the plan's ready to go. Some insurance carriers, I know, let's let's let's say you're not auto-approved. Actually, that's a good question for me. What percentage of people that you talk to that you do this application process, how many get instantly approved? How many go into like a pending status, meaning there's something else that needs to be dug into, and how many get declined? Yeah, I would say the majority of the population are getting auto-approved right now. Um generally people who are looking for a switch, maybe they've done their research, they're thinking, I'm a pretty good candidate for medical underwriting. Trevor Burrus, Jr.: Well, they've talked to you and you've determined. Like if they're undergoing cancer treatment, you're not gonna do an application. Correct. So the people that sound good to you, okay. Trevor Burrus, Jr.: People that sound good to me, I would say about 80 percent get auto-approved. Okay. Which seems pretty high given the fact that you've also asked all the questions. Trevor Burrus, Jr.: Correct. Does it field underwriting, making sure that we're not going to be wasting their time going through a full application and everything? So eighty percent get auto-approved. And then most people most of the people I talk to do make it through. I'd probably say out of the 20 percent remainder, probably I don't know, seven. So they go into an underwriting at like appended. Status where a human's looking at it. Correct. Okay. You mentioned before we started talking about they could do outbound phone calls. Let's talk about that a minute. Yes. So um some clients and some carriers are a little bit more stingy than others when it comes to medical underwriting. I'm thinking of a few carriers in specific that don't have their auto approval set up yet. They don't do the Millen Millen report. They send the application, the medical history to an underwriter at their headquarters or wherever they are based out of. So that can take up to maybe one to two weeks to actually process. Sometimes at the end of the application, it says we may be reaching out to number one, the client to verify a few pieces. Or maybe, for instance, the client has diabetes. Maybe they're looking to see how many units of insulin are you taking a day. Is this going to be a huge concern to us? Or are you just taking the metformin, the generic medications for diabetes? Is it under control? Some want to dig a little bit deeper. So clients may get a call, but also their doctors may get a call. Maybe there's something on the application that didn't look just right, something in the health history that a doctor notated was a concern. They may call your specialist to verify that what you've answered is this redacted, what you put on this paperwork. I remember back in the day we always when those they would send out and I can't remember what it was called. There's like a term for that when they reach out to uh the doctor. But anyway, so they'd reach out and a lot of times that will sit on your doctor's desk because it's not getting processed. So the tip that we've always done is say, hey, you call your doctor, you're the patient, call that person in the the bill, you know, in the in the in the uh records department at your at your doctor's office and say, Hey, you got a request from an insurance carrier, it's really important you do that. And they'll usually get right on it. So if you find yourself in this kind of waiting game, and we'll hold your hand through that process as well, um, if you make application through us. But um Yeah, anyway, that's great. I've learned a lot. I mean, I've learned learned some things uh through this uh kind of talking all through this Medicare supplement. So it's a good opportunity to save money. Oh, it's um and we're seeing people move from like a plan G uh to a plan G to save money. It's no secret, I think, that Medicare supplements have gone up a little bit more than normal in the last two, three years. Uh our number one carrier for years, they said they always you know had a 2.9% average rate increase, you know, over like a 21-year period. And then they've taken back-to-back 15, 20 percent um increases. And a lot of that uh is just kind of the post-COVID surge in medical usage. Um there's a lot of people, what what what's happened, uh, you're probably aware of this, but as employer deductibles have gone up, four, five, six, seven thousand dollars, uh, people have been delaying uh getting those hip replacements, those knee replacements, those kind of bigger ticket items, because on an employer plan, I'm gonna have to pay six grand for that. I'm gonna meet my deductible coinsurance to my max out of pocket. So they wait until they get on a Medicare supplement plan because the Medicare supplement, like a plan G, is $283 deductible. So what has ended up happening is those supplement plans, the last two, three years, as employer deductibles have gone up, have been overutilized compared to how they were all priced. Now they're playing catch-up. Yeah. So that's why they're taking these kind of bigger rate increases. And we've got some carriers that they were almost a little bit smarter about this, um, thinking of one in particular, and they took their rate increase three years ago and it allowed them to kind of stabilize their whole block. We do expect things to become more stable. We don't expect that to continue. Hopefully, this is the last year. But if you're feeling that crunch, if you've seen your price go up 15, 20 percent for the last couple of years, and you want to shop around. You know, we've gone over all these underwriting things. The next step really is to call in. I'll give you our office number here in a minute, um, is to call in, see if you can answer some of these health questions, see if there's an opportunity to save money. Um and you don't have to wait until the end of the year. You don't have to wait until the annual enrollment period. You can do that now. Don't wait. Yeah, because you get put off forever and ever. Yeah. Because that everyone thinks they have to wait. And so what ends up happening is the systems get backlogged. I remember we had a carrier um, I mean, we were waiting three months for things to get approved the annual enrollment period for people switching from an advantage to a supplemental policy. We actually had to underwrite with a different carrier in the meantime that was actually going to auto-approve them. Yeah. So you you gotta get on this. Don't don't put off. If you're thinking, man, I want to uh don't put this off until the annual enrollment period. You can do it all summer long. We basically do to your health. Yeah. You don't want to wait and then something comes up and then you're stuck. There's no special, and this is where I think you you may be wondering, well, if I if I wait till then, then I don't have to answer any health questions. That's not the case. You have to answer health questions whether you do it now or whether you do it um during the annual enrollment period. You gotta answer the health questions. So do it sooner than later. Start saving money now. Okay, let's talk to Diane in Wisconsin. Wisconsin. Diane, welcome to Medicare School Daily. What questions do you have for us? Hello, thank you for making my call. Yeah, my question is regarding HSAs when one spouse starts Medicare. Okay. My situation is that I'm still working, I've always carried the medical insurance, I carry the family HSA. My husband is turning 65 this November, and we're debating whether he should start taking Social Security, and then that would come along with part A Medicare, so we can't contribute to the HSA in that situation. So I'm wondering after he starts Medicare, what are the rules on the HSA? Can I continue to contribute at a single level? Uh yeah, so you is the HSA under you're saying this is your coverage, right? Correct. Okay, yeah. So you can actually, I believe you can actually fund it up to your full family limit, as long as he just takes part A. Yeah, it's kind of kind of interesting because he's not the one who actually has the coverage. It's you. Okay. Yeah, so what what's the uh let's just talk a little bit um through that plan real quick. And you also, I guess do you make the catch up as well? That 55 or older one if you can make it. Okay, good. Yeah, you know all about that. That's good. So I try to max it out, but I got a little scared this year because he was talking about taking social security and then part A would start in November, and I was like, oh my gosh, maybe I can't contribute to the full family amount this year. What is the correct amount? Yeah, so I don't get the penalty. You can as long as it's he because he's the non, he's the he's the he's the the you're the working spouse and you're not on Medicare. So you can continue to contribute, which is good. Yeah, now is he turning 65 soon? Is that what you said in November? Yeah, in November of this year. What do you pay for that coverage? Like what comes out of your check? Yeah. Yeah. Um about 400 a month for both of you. Yes. And then what's the deductible? Um two thousand single, I think four thousand family. Okay. Well, that's a good deal. Yeah. How long are you gonna keep working? Um, well, we just talked with our financial planner and she says in two more years. Okay. I'm thinking maybe four more years. We'll see. Okay, how old are you? I just turned 61. Okay, so there you go. You can at least get yourself to Medicare age because if not, you are gonna go on, uh you'll have to go on probably an ACA plan, I'm assuming without a subsidy, and that can be pretty expensive. Oh, yeah. Yeah, well, my employer actually has what they call retiree medical credits that will pay for the same group coverage that I have now based on how long you've been with the company and that kind of thing. So I now have enough credits in there to pay for about four years of health insurance at today's rate. For both of you or just for you? Or just me. Okay. I'm assuming my husband would just take Medicare and go that route. So yes, and that's actually very important. So uh do you know if you do something like that, you make sure he goes on Medicare because it's only considered like credible if it's based upon you actively working at an employer over 20 people. Right. So uh we see a lot of people. Yeah, avoid all that stuff. Yeah. If he does if you're not working, he needs to go on Medicare. If he's eligible. Yep, and then we need to talk supplements and all the fun stuff. Yeah, all that stuff. The B's and the D's and the F the G's the alphabetic. Yeah. Okay, what other questions do you have? Um, that's it for now. I was just really concerned about the HSA dollars and not overcontributing and getting hit with a penalty. So Yeah, sure. Understood. Okay. Well, hey, if we can help you at all, call back in. Well, dude, thank you so much. Thank you. Bye-bye. Thank you. Bye-bye. That's kind of an interesting thing. I feel like most people think, you know, because there's a lot of stuff on there. If you're on part A, don't contribute to an HSA. But it you know, if it's based upon the the spouse, that's the spouse's plan, yeah, then you can contribute. Oh, absolutely. And a lot of people don't think when they're actually contributing to their HSA past 65 that um they don't need to make a plan on when to sign up for part A later, when to stop that HSA contribution. Because if you're past 65 and you do sign up for part A, that part A is gonna be retroactive either to your 65th birth month or six months prior. Yep. I've had plenty of clients who, you know, they contributed to their HSA January, February, March, probably the first six months of the year, they apply for part A in June. That's going back to January. If you're over 65, if you're gonna go back to I think uh either the month they turned 65, or like they're eligible or six months. So whichever is later I think would be a good thing. So if you did make contributions during that time, you'll get about a six percent excise tax when you file for the next year. So it's from financial planners that I've spoken to, they said it still makes financial sense to make that contribution. But you know, I mean I guess it does. If it's only a six percent, but then you're gonna pay income tax on that. So I don't think that's I don't know that that's actually true, because I'm assuming you pay the six percent plus whatever uh taxes. Uh like you wouldn't just pay six percent, if not everybody would do that. So you would probably pay your taxes plus the six percent. So it probably doesn't make a lot of sense to do that. Um the did you know that you know that an HSA, if you uh I think if it's over sixty-five, don't quote me on the age, but it turns into it's basically an IRA. Really? Meaning you can be you can be seventy-five. Let's say you had because we talked to some people, like they've got fifty grand in the HSA. Yeah. And that that actually once you're I believe it's sixty-five, you can just pull money out of that for anything you want. You have to pay taxes, just like an IRA. So you wouldn't want to do that probably, but you always could. If you had a big HSA, you needed money. You that does not have to be spent just on medical stuff. But when you pull it out, you're gonna pay just your taxes like any other IRA or 401k distribution. Okay, let's talk to Bruce. Uh Bruce in Illinois. Welcome to Medicare School Daily. Josh, how are you today? Hey, I'm doing well. What questions you got for us, sir? Here's here's my it's more of a correction, I think, other than a uh a question. I've listened to you guys for a long, long time. And I think I heard your guy in the uh studio today say something about the initial enrollment dates being three days before, or three months before to three months after. And I know you can apply up to three months before, but I thought you had a six-month window after the initial uh your birthday. Sure, understood. Yeah, so with that, Bruce, um with your initial enrollment period, that's realistically enrolling into original Medicare, Medicare A and B. So you get the three months before, you get the three months after, and the month of your 65th birth month, which also includes in that window signing up for an advantage plan or a prescription drug plan for Medicare. So most of those are for the federally administered plans. That six-month open enrollment rule that you're thinking of, that's for Medicare supplement policies, the plan G, Plan N, they give you six months, um, including your 65th birth month. So if like if you're born in August of 1961, you're gonna have August, September, October, November, December, all the way up to January to make your final decision on a Medicare supplement policy. After those six months. I understand. And then my my other question was on an advantage plan. I thought when you got initially on an advantage plan, you had up to 12 months where you could switch back with no underwriting to a uh regular uh Medigap plan. Yeah, and that is that is like technically true. Um there's this thing called a 12-month trial period. Um I will tell you though, the insurance companies, they they're wise to this, right? They understand you take an advantage plan. The strategy, of course, is hey, I take an advantage plan, save some premium dollars. If something changes in my health, like I get a cancer diagnosis, have a heart attack, whatever it is happened during that 12-month period, um, then I'll just switch over to a Medicare supplement plan right away and be able to get guaranteed issue. And that is technically true. There are some hoops, though, that you have to jump through. Um, and that primary hoop is you have to get a letter from the Advantage plan saying you've been disenrolled from that plan. Then that letter goes to the Medicare supplement plan and they make that active, right? And so what happens is you have to wait for one plan to end in order to then get that letter two wait two weeks later, then get it to your Medicare supplement plan, and then they approve that Medicare supplement plan two, three weeks after the advanced plan ended. Okay? So, yes, it is technically true, but most people do that and they they're they're thinking of this great you know strategy could save dollars and all that. And what ends up happening is like let's play this out. Okay, you get a cancer diagnosis, stage three, stage four, whatever it is. The last thing you want to be doing is sitting there trying to delay your coverage, delay getting anything. I mean, it's it's not a great period. I've seen people, uh maybe they're a little bit more on the on the nervous end of the spectrum. There, they won't leave their house for a month waiting for all this letters and approval because they don't want to go out and get a car wreck, because they don't know if they have insurance. Or you have a heart attack, you're in the hospital. Uh you know what if that happens on the first day of the month? The soonest you can get all that done, the absolute soonest is get that canceled uh 29 days later, 30 days later, and then you're gonna wait another three weeks for a letter to show up that then goes to the Medicare supplement plant. So now we've got 60 days where your coverage is up in the air. So, yes, it sounds good in theory. In practice, though, I don't know. And not to mention, too, I mean, taking it to an extreme here, which being the last insurance that you need, Medicare, it's important to make the right decision up front. Because what if you are incapacitated? Yeah. Only you can make that switch during the trial right. So God forbid you are in a car accident, put into a coma, whatever it is. Only you can make that switch. Of course, if you have the power of attorney. Yeah, but is your power of attorney gonna know, oh, I didn't need to go try to get all this insurance sorted out? I mean, it's so yeah, Bruce, you're you're technically right, uh, but I don't know. It seems like a lot of a lot of risk. Yeah, listen, I understand totally. I listen to you guys every day, and I I listen to the the uh twice twice a week with Marvin when he's on. Hey, we need to bring you, we need to bring you on. You probably know as much as any of us. And listen, and I end it with this statement. All I'm trying to do is keep you and Josh honest while Marvin's away. That's awful. Hey, I appreciate that. Yeah, so he's probably watching this every day. It is very confusing, especially for older people, because I hear all these different things, and every time I think I have it figured out, and uh something else comes up, and I'm like, oh, I didn't know that. Yeah. And you just explained some things to me that I didn't know. So I mean it was really helpful. So I thank you. Hey, and you're probably becoming the expert to your friends, I would guess. I am. Yeah, I bet everyone's coming to you. Definitely doing that. Definitely with your help and guidance, I've been able to help a lot of different people, different different questions and and be able to direct them to your company, which has been really helpful. Well, hey, that's a blessing to us. So we've got agents all around the the nation now. Thanks to you, we can help we can help anyone you send our way. So hey, thanks for calling in, Bruce. Nice to chat with you. Thank you. Appreciate it. Take care. Bye-bye. The more I like think about this 12-month trial period, obviously we've talked about it for years and years and years. It was just like, okay, so you can save a thousand dollars. You know, compared like because people do it as a strategy. Oh, yeah. But I don't know. Yeah, it seems like a lot of stress. It is. It's a lot to deal with. Oh, I could go wrong. And then what happens, what happens okay, let's play this out. Yeah, you're you're in month eleven. You're like, I'm gonna do this. Then you get in your car accident. Yeah. And then you're stuck in that advantage plan the rest of your life. Yeah, you can't go through the underwriting. Yeah, I mean, like good luck. So I don't know. And another thing is with the 12-month trial right, just because the insurance companies are required to take you doesn't mean that they can't make it hard. Yeah. Like you said, all the paperwork, the uh they don't want you. They know you're switching because something came up. So the second they approve you, they're paying bills. Bang. Yeah, and they're paying bills. That's right. Yeah, yeah. So they they they will make it hard. I mean, they will they will end up doing it, but they will make it hard. There's a very important Medicare coverage that a lot of people tend to skip over thinking they don't need it, or maybe they don't even know about it. Tomorrow on Medicare School Daily, you're gonna learn exactly what this is and how you can protect yourself for the future. We'll see you then.