The Danger Behind Using A Medicare Advantage “Trial Right”

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A Medicare Advantage “trial right” can sound like a built-in safety net.

But there are important rules behind it that many people don’t fully understand until they need to use it.

Today on the Medicare Daily Show, we’re talking about what makes this decision so important, what to know before relying on a trial right, and why timing matters.

As always, we’ll be taking live Medicare, Social Security and Retirement questions. We look forward to taking your calls!

Transcript

SPEAKER_01 0:03

When you start Medicare, a lot of people think every year you're going to be able to switch back and forth. So your decision at the beginning maybe isn't super important because next year you can just switch it and change it if you want. That is generally speaking not the case. Other than in a handful of states, the decision that you make could be a lifelong decision. Now, there's this thing that we've all heard of, maybe you haven't, but it's called the trial right, and it relates to Medicare Advantage plans. Because generally people who start with a Medicare supplement plan, like a plan G or a Plan N, they love that and they don't want to change it, right? If you go with an advantage plan, that starts getting into the world where, hey, I want to know I have optionality to get back to a supplement plan. Unfortunately, generally speaking, you are gonna have to medically qualify to do that, except there's this little thing called a trial right. So you're gonna learn about what a trial right is and how you can use that, or maybe why you shouldn't plan on using that for your future. Welcome to Medicare School Daily. My name is Josh Music. I'm here in the studio with Justin Cohen. Justin's worked with us for many years now. He's one of our Medicare guides. When you call into MedicareSchool.com, you're gonna be talking to folks just like Justin who are able to walk you through your scenario and help you understand what your best options are so that you can get enrolled in coverage without any hiccups, without any gaps, without any penalties, without any delays in coverage. Encourage you to call in. If you want to be a part of the show, uh we'd love to talk to you. Phone number is 833-824-2004, 833-824-2004. We're here Monday to Thursday, 11 a.m. to noon Central Time, every single day, Monday to Thursday, and we would love to talk to you. You should not go on Medicare and make a mistake. You should not go on Social Security and make a mistake because there are resources here uh that can help you do that. So please don't make a mistake. Call into the show if you have a question. If you want help to get your personal situation, compare all your options, advantage plans, supplemental plans, drug plans, dental vision, hearing, whatever it is, you can talk to one of our agents live, 800-782-6676. 800-782-6676. Justin, let's talk about trial rights and Medicare Advantage plans.

SPEAKER_02 2:10

Well, uh trial ride gives you the opportunity to try a Medicare Advantage plan, to try it out, to take it for a spin, a test drive, to see if you like it. Medicare Advantage plans are attractive because they have zero dollar monthly premiums and generally include ancillary benefits such as dental and vision and maybe an allowance for over-the-counter supplies. But I think somebody realizes that those Medicare Advantage plans are not necessarily going to be the best kind of coverage you can get, but maybe you want to take a stab at it. So trial ride gives people an opportunity to start with a Medicare Advantage plan when they first go on Medicare and have 12 full months to try it out to see if they like it, and still have the uh the emergency cord there to be able to be pulled to go back to original Medicare and get a Medicare supplement plan with no medical underwriting. There's really two trial rights. Trial right one is when your Medicare A and B and an Advantage plan all start on the same day, generally speaking, the first of the month in which you turn 65. People who retire and go on Medicare after 65 don't get a trial right one because of the way the rules are written. But uh people who can get trial right one, start Medicare A and B and an Advantage Plan on the same day can have that advantage plan in effect for up to 12 months and decide that they don't like it anymore. Uh really it's easy to get out of an advantage plan and go into a supplement plan for those first six months. That's during your open enrollment for a Medicare supplement plan. Uh and uh with that, there's no paperwork, there's no extra legwork, it's very easy. But if you're going to use a trial right in the second six months of those 12, then it gets a little bit tricky because you have to first cancel the Medicare Advantage Plan, receive a termination notice in the mail, and then apply for the Medicare supplement plan guaranteed issue. You have 63 days to do all of this. So it kind of all has to go right. You have to be on top of it, and it doesn't work if you get hospitalized or go out of commission for some reason. Uh that's trial right one. Uh trial right two is when you start Medicare and you get a supplement plan right from the beginning. Uh if at that point uh you decide later that you want to try a Medicare Advantage plan and you've never had one before, then you can go on a Medicare Advantage plan for up to 12 months, decide you don't like it, and then pull that cord and go back to original Medicare. With Trial Right 2, you can only go back to the original supplement plan you had with the original carrier, same plan, same carrier, unless they've stopped selling that and then you can pick a different one. With trial right one, at the end of those five months, six months, eight months, but at the most, I'd like to say 11 months, just to be safe, uh, you'll be able to pick any Medigap plan from any Medigap carrier available in your area. Generally speaking, we want you to understand the differences between supplement plans and advantage plans right from the get-go. So you make the right choice from the start and don't need to count on the trial right, which uh works most of the time, but not always.

SPEAKER_01 5:05

Yeah. I think if your plan is to like try to game the system to save a little premium, you're making a mistake. Trial right is it's for like the people that like, oh, I got an advantage plan because no one told me about a Medicare supplement plan. No one explained the differences, and that's what I really want. And so it's an opportunity for you to kind of recover yourself. But we'll talk to folks who are like, hey man, I'll go on a Medicare Advantage plan for 12 months, switch over if something happens. Well, the truth of the matter is those insurance companies know they know that people will switch over when something happens. And so they know they are going to be on the hook, they're gonna lose their shirt when you come over. Um, again, the first six months of your trial right, not a big deal. Trial right one. The second six months is when they're gonna make you start jumping through hoops to prove that you really are eligible for this. And they're gonna try to get you not to be able to use it and throw some throw some blocks in your way. My recommendation is don't plan on using it. Don't try to outsmart the system. It's not worth the stress, it's not worth the risk that something could go wrong because we see people mess this up frequently. So choose your coverage, understand it, and just get back to enjoying life. Like stop trying to game game insurance, for goodness sake. So, anyway. Let's talk to Kenneth in Georgia. Kenneth, welcome to Medicare School Daily. What question do you have for us?

SPEAKER_04 6:29

Yes, uh I wanted to know uh I'm I'm uh I've reached my uh full retirement age uh of uh six to six years and ten months, I think. Um and uh I'm looking to retire this year. But I wanted to know uh how far in advance uh of my retirement do I need to sign up for the Social Security and Medicare.

SPEAKER_02 7:04

Good question, Kenneth. So uh you can sign up for Medicare up to three months in advance of the month you needed to start. If you're doing Social Security at the same time, that changes that to four months in advance. So let's say you were going to be retiring in, I don't know, September, and you would lose your health insurance at the end of that calendar month, meaning on October 1st, if you didn't take Medicare, you'd find yourself without coverage. So 10, October, count back three months, 987. July is the earliest you could apply for Medicare only, but you could do it in June if you wanted to apply for Medicare uh and Social Security at the same time. Uh now, are you already enrolled in Medicare Part A?

SPEAKER_04 7:51

I am not.

SPEAKER_02 7:52

You are not? Okay. Then I'm gonna change that a little bit, actually. Uh you can sign up for Medicare Part A any old time you want to. Are you contributing to a health savings account, an HSA, right now?

SPEAKER_04 8:05

Yes, I am.

SPEAKER_02 8:06

You are? Then you want to stop that about six months in advance. Uh in fact, more like seven months, eight months, you might want to stop contributing to the HSA. Here's why. If we get together and you want Medicare in October, we're gonna sign up for it at the very latest in September, right? You do it three months in advance if you can, but you can do it the month before if you need to. And when you sign up for Medicare Part A in September, they're gonna backdate it by six months, 876-543. Meaning if you're still contributing to a health savings account right now, you'll find yourself with an overlap between contributions and the backdated Medicare Part A effective date. Now it's usually not a big deal, but if you got your taxes audited, then you would owe taxes on those contributions and a six percent penalty. So might go ahead and tell your employer you need to stop cont contributing to the HSA right away. But then contact us, say three months beforehand, and we'll help you sign up for Medicare Part B can be done three months in advance, and the Social Security can be done four months in advance, if that answers your question.

SPEAKER_01 9:16

And if you want somebody to walk through this with you, hold your hand through this whole process, it doesn't cost anything. We'd be happy to do it. Uh you got your pen and paper? I do. Okay, our phone number. You can call, talk to someone, schedule an appointment for you know three months before you need everything to start. Phone number is 800-782-6676. 800-782-6676. Everyone who works here, have you have you watched my dad Marvin at all on YouTube or anything?

SPEAKER_04 9:49

Yes.

SPEAKER_01 9:50

So every everyone who works here, whoever you're gonna talk to, has been trained by him. You're not gonna get routed to the other side of the world, right? Somebody who doesn't understand what's going on here in Medicare, you're gonna talk to someone, we're in Kansas City. Uh just call in, no cost, we'll show you your options, we'll help you enroll, hold your hand through that process, do all the tricky government paperwork, fill out the forms, do all the stuff so you can literally make your transition to Medicare with ease and confidence, knowing you made the right choices, okay?

SPEAKER_02 10:20

Since you've already reached your full retirement age, Kenneth, you can go ahead and start Social Security any old time you want to. You know, you don't have to wait until you retire to do that. In fact, that's the significance of full retirement age, is there's no longer an income test. There's no longer a limit to the amount of money you can make from a job because it won't affect your Social Security benefits any longer. Now, maybe you want to talk to a financial advisor before you make the permanent decision of starting Social Security. It should really be a part of a larger picture with your whole financial future and plan. Uh but um yeah, there's nothing stopping you from starting Social Security any old time.

SPEAKER_01 10:54

Okay. Okay. Thank you. Thank you so much. Have a great day. Call us if we can have a couple of things. All right, you too. Take care. Bye-bye. All right. Okay, let's talk to John uh in Wisconsin. John, welcome to Medicare School Daily. Thank you for waiting. We've had uh some long call long callers. Understand you got a question about Irma.

SPEAKER_07 11:14

Go ahead. Sure enough, Josh. Good morning. Thank you for taking my call. I appreciate it. Of course. Yeah, I just want to start off by thanking you and thanking Marvin for your outstanding work uh for all of us out here and and looking to get onto Medicare. It's important.

SPEAKER_01 11:29

I appreciate it. Thank you.

SPEAKER_07 11:31

Yeah, sure enough, your team uh uh agent named Steve, I can't remember his last name, but he uh he got us on the greatest uh um policy on the way forward, so we're we're we're very, very happy. Excellent. Thank you. Yeah, so my question is uh I'm I'm confused a little bit about Irma. I understand uh that it's that the uh the the value of your income is affected off AGI, and I think it's line 11. Is that correct?

SPEAKER_02 12:00

Uh um modified adjusted gross income M A G I. Uh John, to clarify, that's uh that's your that's your AGI plus uh line two A, tax exempt interest.

SPEAKER_07 12:14

No, two A, I'm sorry. I apologize. Um so hypothetically, if our income doubles oh let me let me back up. I understand that it's it's uh referred after two years back. Uh the IRS looks at or Medicare looks two years back, I understand that. But if I hypothetically, if our income doubles this let's say next year, so my IRMA um would go into effect much higher. And then if the income goes back down to what it would be this year, does does the government uh does Medicare automatically reduce the IRMA back to what it was, or do I have to call in and request that?

SPEAKER_01 12:57

So it it depends a little bit. So are you uh are are you going back to work and then stopping work, or what's the change for the fluctuation in income?

SPEAKER_07 13:07

No, I just retired last year at on 1231, but I'm thinking about you know, if I have luck and good investments, or if I take capital gains, um would that for the one year so that's gonna drive the arm up.

SPEAKER_01 13:24

Yeah, so the time to do that would be this year or next year if you just retired at the end of last year, right? Because you can use that life-changing event that you retired and say, hey, I don't make that much money anymore. Right? So what's gonna happen? Let's say you did all that this year in 2026. You're actually not gonna find out about that until 2028 because they're always gonna go back two years. And so at that point, you're gonna say, Hey, look, I retired, you know, and so you can use that life-changing event twice, and they don't care if the money came from work, they don't care if the money came from this, that, or the other. They just care that you had a life-changing event. So I would do that as soon as possible from an Irma perspective. Obviously, that's just one piece of any equation, you know, taking gains or all of this stuff. So, but I would just be very uh you can use you can use that for the future. Um, but if you're saying, you know, five years from now you do it, you're not gonna have you're not gonna have a life-changing event. You're not gonna have any reason to appeal it. Oh, so did you say you have two chances to appeal? Yeah, you can use the same life-changing event twice. Oh. But they need to be back to back and as soon as possible from when it happened. Like you can't you can go back now and do it, right? But if you're if you were five years ago, they're not gonna do it. It needs to be like around that time.

SPEAKER_07 14:48

Okay. So would there be any chance that the government would track your income and just it would it would just follow your income every year. So if it went up, it went up.

SPEAKER_01 14:59

No.

SPEAKER_07 14:59

And then it went down, it went down.

SPEAKER_01 15:01

The only thing they're gonna track, well, they they do track it, right? But in December of every year, they look at it and say, hey, two years ago, did this guy make over the threshold? If they did, they're gonna send out an Irma award letter saying, hey, you got to pay us more. So they are tracking it, and it will fall off automatically. Um, but it's always gonna be based upon two years back. So if what you're trying to do is trying to say, hey, they're gonna look at 2026, they're gonna see it's elevated. So I need to appeal it. They're not gonna automatically know that now you make less. If you get that award letter and you make less and you have a valid life-changing event, then you it's on you to take care of that.

SPEAKER_07 15:41

Would you add a thing? Okay, I'm I'm 99% clear on this. I guess it's it's never gonna be where the government will automatically follow your income. If it if an EMR, if you go into a higher IRMA category, you're you're kind of stuck there unless you have one or two chances to reduce it. That's correct.

SPEAKER_02 16:02

No, I I think I can talk on that. Now I I unfollow John. So you're saying first of all, they do look back every year. Every single year, they're looking at your tax returns from two years ago. This year in 2026, they're looking at 2024. Next year in 2027, they'll be looking at 2025. And so your question is if the income doubles because we decide to take money out of investment, or we win the lottery, or sell our house, and and we it's we get make more than the amount you can write off, right? For a married couple, you can write off like $500,000. But uh the rest of it will end up on your tax form, your $1040. And two years after that, they will send you the letter telling you that they're gonna charge you extra, but it'll only be for that calendar year. And then the next calendar year, they'll look back and they say, Oh, well, he didn't have a big year the next year. So we're not charging him an Irma. That will happen every year like that, John.

SPEAKER_07 16:55

Now I'm 100% clear and I appreciate that. Uh I was worried because I I was confused. I thought I heard it through your team or read it maybe that it was not the case. So it does not lock in. It it resets every year. Fantastic. Wonderful, Josh. Thank you again for time, uh good work and your time this morning. I appreciate it.

SPEAKER_01 17:17

Thanks. Okay, let's talk to Debbie in Indiana. Debbie, welcome to Medicare School Daily. What questions do you have for us?

SPEAKER_03 17:25

Hi.

SPEAKER_01 17:26

Hi.

SPEAKER_03 17:26

Hi, Josh. Hi, great to be with you. Um, I love you and your dad. I watch you all the time. Uh well thank you. Preeminent educator.

SPEAKER_01 17:36

We appreciate that.

SPEAKER_03 17:37

You I used your agents when I needed Medicare, which was just this past year. So my question today is on BRMAS.

SPEAKER_01 17:45

Okay.

SPEAKER_03 17:48

So I retired in 2025 and Medicare started in 2026. I was fortunate enough to have a really good job, and in 2024, my Medicare premium uh for 2026 was based on that wage. I was above the lowest IRMA threshold, so I'm obviously paying the IRMA premium now. And I know I can apply for an appeal for that due to my change to retirement. However, there's a couple other things that have come into play that I'm not sure how to handle. Um, I know that I will be above that base limit again in 2025 and 2026 income year lookbacks because I received two lump sum amounts uh as K1s from my mom's estate when she passed.

SPEAKER_01 18:40

Okay.

SPEAKER_03 18:41

So when I combine those amounts with my now social security and a small annuity that I'm receiving monthly, those K1s are going to put me above the IRMA limits of approximately $108,000 until 2027. So I don't know if I should file that ERMA waiver now, uh, even with my K1 income, or uh does the appeal process consider that retirement life change, but then disregards the K1 income that has come in for that one or two times?

SPEAKER_01 19:22

Okay, so uh when they're looking at this, uh number one, this is confusing. I understand that. Uh when they are when they look at this, they don't care where the income comes from. They don't, you know, you could have income from a thousand different sources, they don't care. The only thing they care about is if you've had a life-changing event, right? So but for you, it sounds like this is going to continue a little bit, right? So you had high what was your income in 24?

SPEAKER_03 19:52

In 2024, from my salary, it was $119,000.

SPEAKER_01 19:58

$119, so you're in the first IRMA bracket. Are you are you filing single or married or single? Okay, so you're in the first Irma bracket, so you've got an IRMA probably of $80 some dollars this year. Does that sound about right?

SPEAKER_03 20:13

No, I was actually bumped up into the next the next, I'm not at the lowest amount.

SPEAKER_01 20:21

Okay. Okay.

SPEAKER_03 20:22

My prunium is like $120 something dollars.

SPEAKER_01 20:26

Okay, well, the so the way it were oh, maybe that's part B and part D or something. The it the on the chart, so in uh you know, you can always Google SSA 44. So if you're single, between 109, so this is for 2026, between 109 and 137,000, um, if you're between 109 and 137, you have a part B, as in boy, the uh the medical side IRMA of $81.20. $81.20, then you've got a drug plan ERMA of $14.50. So together, those are just under $100 extra. Okay. Yeah. The next one up goes to if you're at $137 to $171, then your part B ERMA is $202.90. You're actually paying double the Part B premium amount of the standard, right? And then there's about a $37 IRMA. So I just the $120 number kind of threw me off because I don't know where that would be coming from. Um, but maybe it's a mixture of some other things. So at any rate, uh you're at you're you're at uh you're gonna be paying that. So that was 2024, you're at 119. 2025, how much did you make? Have you filed your taxes yet?

SPEAKER_03 21:36

2025. Um, yes. And I let me look, I should have had this prepared. I'm so sorry.

SPEAKER_02 21:46

Good. Sounds like we want to appeal for 27 and 28. Yeah.

SPEAKER_03 21:51

That's that's what I was wondering is can I appeal at a point in the future when I don't have that K one income?

SPEAKER_01 21:58

Yeah, we're Will 2027 be elevated or will it be kind of back to base?

SPEAKER_03 22:10

Yeah, then the numbers are confusing because um twenty twenty six was for twenty twenty-five taxes.

SPEAKER_08 22:19

Sure. Right.

SPEAKER_03 22:20

And twenty twenty-four income.

SPEAKER_08 22:23

Yeah.

SPEAKER_03 22:23

So in twenty twenty-seven it will be based on my twenty twenty-five tax return.

SPEAKER_01 22:30

And will you be below 109 in 27, do you think?

SPEAKER_03 22:37

In my when I file my 2027 taxes in 2028?

SPEAKER_01 22:41

No, I'm just saying for will your 2027 income be below 109,000, do you think? Okay. So then here's the deal. We can we can cut through we can cut through all this extra stuff and just say there's really no point, there's really no point to appeal this year. Okay. They're not you're if you're gonna stay in the same bracket, what's there's no reason to do it. You can use that appeal, I think, two times. So I would recommend in 2027, let you probably December of this year, you're gonna get a letter, it's gonna say, hey, you owe this IRMA, this extra amount. You're gonna fill out SSA 44, that's the form, and you're gonna say, Hey, I've retired, and then you can put in the amount of money that you're gonna take in 2020 that you're gonna probably make in 2027. As long as it's below 109, they'll drop that IRMA. Okay. So, and then in 2028, they're gonna look back at 2026. So in December of next year, you're gonna get another letter saying, Hey, in 2026, you've made over the limit, and you're going to use that SSA 44 again because you can use it twice. Say, hey, I've retired, here's what my income is going to be in 2028. So I would just say I I would not worry about too much other than the next time you get the letter and the time after that, you're gonna say, I retired, and here's the money I make now. And as long as it's below the 109, they'll drop it. But you're not gonna be able to get around that Irma this year.

SPEAKER_03 23:59

Yeah, so when I say I make now, that's what they look at, not necessarily my tax requirement.

SPEAKER_01 24:08

Yeah, it can get confusing. You're just gonna say, I retired, here's the date I retired, and here's what I make this year in 2027. And then you're gonna do it again for 2028.

SPEAKER_02 24:17

And you can actually do both those at the same time, Debbie. At the in December of this year, when you get the letter about Irma announcing it for the year 2027, the that's when you fill out the SSA 44 for yourself. And you can do step two for 2027 and use step three for 2028, take care of both of them at the same form, and uh send that into Social Security. That should take care of that. But wait till wait till the 2027 Irma announcement comes before you do this.

SPEAKER_01 24:41

Which will generally be December this year.

SPEAKER_02 24:43

Okay.

SPEAKER_03 24:44

Yeah. Fabulous. And then how long does it normally take to hear from them?

SPEAKER_01 24:49

Three to five weeks.

unknown 24:51

Okay. Great.

SPEAKER_01 24:53

Sounds good. Okay, Debbie.

SPEAKER_03 24:55

You guys are awesome.

SPEAKER_01 24:55

Call us if you need anything. Thanks. Thank you. Bye. Bye bye. Okay, let's talk to Jeff in Indiana. Jeff, welcome to Medicare School Daily. Understand you've got an appointment maybe coming up and you got some questions.

SPEAKER_05 25:12

Yes, I do. I'm sorry. Who is this? Marvin?

SPEAKER_00 25:14

This is Josh.

SPEAKER_05 25:16

Josh, hi Josh.

SPEAKER_00 25:18

You do the shorts draw today.

SPEAKER_05 25:19

Uh Tom Cruise's uh cousin Evan on too.

SPEAKER_00 25:22

I was just watching your video recorded uh last Thursday. Yeah, yeah.

SPEAKER_01 25:27

Yeah, so the what yeah, uh we've got Justin Cohen here today. Yes, sir. It's two of us. My dad's in uh my dad is in India. He is I was texting him uh yesterday. He said it's 2 a.m. I still can't get used to the time zone. But he's back, I think, in a couple of days.

SPEAKER_05 25:40

So I understand. Thank you for your patience. I'll cut to the chase here. Uh it shouldn't be this hard into disclaimer. Uh I just turned 72 weeks ago. I filed for Social Security. I got all the delayed retirement credits so that when I go first, my wife will enjoy uh that additional money. Uh she and I are both uh filed Social Security, but we're both working full-time for a uh a place that uh that gives you uh pays for your uh insurance premium when you're full-time people. So I have not filed for B, nor, but I'm getting ready with your education to sign up both she and I for that starting July or excuse me, January 1st of 2027.

SPEAKER_01 26:28

Time to pull the trigger. Sounds good, okay?

SPEAKER_05 26:30

It and was a lot of this stuff is stuff that I picked up from you and your dad. So I I don't want to show off because I've I have heard this and retained it, but uh uh just about the time I think I know what I need to know, bam, something comes up. And my question this morning that I uh told to the lady who uh question uh answered the phone, which is very good at her job, by the way, was according to the ratings of the supplemental programs, uh the attained, the issued, and the community. Uh I live in a northern Indiana, and I understand that Indiana has the birthday rule that I can within X amount of days, I think 30 days before and 30 days after, uh just go out shopping for another plan in, which I'm assuming that's what I'm planning on going to just based on price. Uh here I had this community thing beat in my head that states that you you it just takes a group of people together and the premium does not go up because of your age. Uh it may cost a little bit more now, but I'm in it for the value. I'm lucky enough to have the resources to pay for these, as long as it's not too exorbitant. And I just want some education on A, is Indiana truly a birthday state? And B, if it is, is it true that I should just in June on my birthday just go shopping for uh prices alone and not worry about the attained issues and then the community ratings?

SPEAKER_02 28:03

That's right, Jeff. Uh, this is Justin. Tom Cruise is my cousin. Hi, Justin. Yeah. Uh yeah, so Indiana, I believe, is an is is a birthday rule state, and so I wouldn't worry too much about the issue age or attained age or community rating. Get yourself a plan in for basically the lowest rate you can find, knowing that uh if you're gonna stay in Indiana as an Indiana resident, then you should be able to use that birthday rule if the rate changes drastically uh going forward. Uh we'll help you get set up, Corey Will, uh with a good carrier. But really you're just looking for that lowest rate you can find. Then again, using the birthday rule to change carriers isn't the most fun thing that we've helped our clients do. And so if it's just a few dollars difference, uh get it from a large national stable rate carrier while you're at it. And then this won't be uh an annual bit of homework that you have to come back to over and over again.

SPEAKER_05 28:59

Certainly. And uh uh I I have also come to the information that if I sign up or or sign up now somehow uh for something to take effect on January 1st, so I can freeze those rates, which we will be good on the date that I want it to take effect, January 1st of 2027. Is that true?

SPEAKER_02 29:20

Typically, yes. Uh but I have seen a carrier's rate change even after the signature date. So go ahead and get it done. Uh and if the rate's gonna change, we'll certainly let you know and talk about that. Uh but usually it will not. Usually you lock that in.

SPEAKER_01 29:36

Yeah, and rate increases for supplement plans generally don't happen on January 1st. Uh most carriers either they take them, they go into effect at your birthday, right, or the policy anniversary, or it happens between March and June. So it's kind of weird. Everyone thinks it's gonna start January 1st and there's gonna be new 2027 rates, and it doesn't really work like that.

SPEAKER_05 29:59

I'm 70 now, my wife is sixty-seven. Like I said, we have both filed or receiving social security benefits, but at at those ages to lock in a a price with Corey in September when I have a scheduled appointment to uh contact him and to talk to him at length would be the appropriate thing to do.

SPEAKER_01 30:20

Yes. 100%, yeah.

SPEAKER_05 30:23

Great. Okay, if if you don't mind, I've got another question about uh Part D. Sure. Pard D uh for myself to cut right to it. I'm taking a medication called Sky Rizzy and having my login screen set up and credentials set up. I went in to do what I've been told to do, and it pops up four, five, six different insurance programs, but all of them state that I'm gonna be paying $58,000 between now and the end of the year, and trying to find out which one of these has the, you know, where's what is their formularies? Where are their formularies listed at on this on this uh uh medic on this Medicare government website? You know, I'm scared to death that that I'm just gonna not be able to take this medication because it'll take me into bankruptcy.

SPEAKER_02 31:16

So uh at Medicare.gov, uh when you look at each drug plan, each one will have a link that says, you know, to visit the plan website. That's where you could go if you wanted to find the formulary. But if Medicare.gov is showing you that that medication will have you spending $58,000, then you already know it's not on the formulary. Sky Rizzy is on the formulary. Uh-huh.

SPEAKER_05 31:38

All the ones that they listed for me all state it's going to be over $58,000, $60,000. So I guess I've got to come to terms unless they change their minds between now and January 1st that this medication is going to be off limits for me. I need to find something else.

SPEAKER_02 31:53

Well, you're going to have one of us helping to make sure that there is not a drug plan offered in your county that already has the sky Rizzy on the formulary. If it's not on the formulary, it can be added. Uh a doctor can fill out a form. It's called a formulary exception. Uh the doctor that prescribes you the sky Rizzy would fill this out for you and submit it to your drug plan. And typically they're going to cover it. Can I ask you a question or two?

SPEAKER_01 32:18

Uh are you in LaPorte County? Yes, I am in Laporte County.

SPEAKER_05 32:24

My zip code is a Shark County. Yeah, it's a country in LaPort County.

SPEAKER_01 32:29

And then the what is the dosage of the Sky Rizzy that you're take?

SPEAKER_05 32:34

Uh uh I'm currently taking a subcutaneous injection once every three months.

SPEAKER_01 32:42

Okay, so I just put in, let me see what let me just because I I mean I see SkyRizzy on the formulary. So the one that it does the so 150 milligram, 150 MG auto injector, is that sound right? Or 180 or 360? Yes, sir. Okay, so um I mean I see that it's on a lot of lot of formularies. So it you know, it says it's gonna cap out at $2,100, which is the max, right, that you'd have to spend next year it'll probably go up to $2,200, $2,400 next year. Okay. But yeah, I show that it's on it's on a lot of plans. So I think I think you're what do I need to do?

SPEAKER_05 33:21

Refresh my my uh Medigare Medicare program because I go through the login process and all that.

SPEAKER_01 33:28

I think it's just a sign. You have to work with us. Well, no, I'm gonna get this thing in September. Yeah, I don't know. I just you know, I just typed in your zip code, typed in Sky Rizzy, the 150 milligram, clicked next, or I chose CVS as the pharmacy, and I clicked next and it all popped up.

SPEAKER_02 33:45

One of my choices, too. Yeah. Great. Mm-hmm. If you choose a pharmacy. I'm not gonna f if you choose the wrong pharmacy that's out of the network with the plan that doesn't work with Medicare drug plans, then it will tell you that it's not gonna be covered at all.

SPEAKER_05 33:59

I just chose the I just chose the big ones. I chose uh Walgreens, I chose CVS, and I chose uh Walmart.

SPEAKER_01 34:05

Yeah, I've got ideas trying to Humana Plan Zero Premium has it covered a welfare eight dollar premium, has it covered uh uh two welfare plans, another humana plan, silver script.

SPEAKER_05 34:16

So it's gonna sleep a little better tonight. I'm gonna sleep a little better tonight. Good thank you.

SPEAKER_02 34:22

That's the goal. So it's it's gonna cost you two thousand four hundred dollars over the course of next year. And if you were to just fill it at the pharmacy in January, you'd probably spend that twenty four hundred dollars all up front, or at least the pharmacist had asked you for it. So when you're enrolled in your drug plan, they're gonna send you some information about the M3P, the Medicare Prescription Payment Program, and you want to call the insurance carrier and tell them you want to uh use that program. So they'll take that $2,400 and chop it up into 12 mostly equal payments, not exactly equal, and then you're spending about $200 a month to have this medication.

SPEAKER_05 34:56

Thank you, Justin. You just you just figured out my next question.

SPEAKER_00 35:01

That's why.

SPEAKER_05 35:02

I have another one too, as long as I have you too, if you don't mind.

SPEAKER_00 35:05

Yes, sir.

SPEAKER_05 35:07

Uh uh like I said, I'm old, I'm six, I'm seventy, I'm in my ways. Uh uh the the there's a little scary situation in my mind with jumping to uh having uh Medicare school over the phone and internet take care of my insurance needs instead of a guy that I can just walk into his office here two miles from my house and strangle him if things are going wrong. How do I get over this scared feeling that I'm jumping into somebody that I only see on TV or talk to on the phone or communicate via uh texting instead of somebody that I've been with for 60 years of my life?

SPEAKER_02 35:47

Well, I keep my desk in the back corner of the building, so anybody trying to jump over it and strangle me has a hard time getting there.

SPEAKER_05 35:54

Uh but uh oh no, if things go well, I would bring in a bottle of Crown Boy or Crown Boy, too. So yeah.

SPEAKER_02 36:00

Well you better be close to the front. It's been it's been years since anybody tried to strangle me. But um No, Jeff, generally speaking, uh whatever insurance agency you get your coverage through, that's who you're gonna be able to lean on, right? Or at least that's the only person or agency that you have any reasonable expectation to be able to lean on in the future when there's a problem or if there's trouble. And so whether you go local or whether you go through us, uh make sure that you trust the people and their reputation for customer care. Uh generally speaking, the only difference between us and that guy down the street is I can't reach out and shake your hand.

SPEAKER_01 36:37

But um The other guy that you know, the guy down the street, it sounds if you've known him for sixty years, he might be headed toward Medicare himself and wanting to wrap up shop. So I don't know, obviously. We love to be here.

SPEAKER_05 36:51

He's older than I am, and he's been recommending me go to an advantage plan. So that was uh a notch in the bad side, you know. That was a con instead of a pro. So yeah. I'm just getting over the the the fact of and then it's much less money not to go through him. So those are leading me quite heavily towards a Medicare school program. And and uh depending upon uh uh what kind of uh sense I get for Corey when I get him on the phone will determine whether or not I'm signing up both my wife and myself for that on that day when I get Corey on the phone.

SPEAKER_00 37:25

Well, we'll tell Corey to be on his best behavior.

SPEAKER_01 37:30

You'll like working with Corey. He's very he he takes his time, he doesn't rush people. He's actually been in insurance for over 20 years, so you're you'll have a great experience for sure. Good deal. Thank you. Okay, I've got a last one if you don't know. Okay, yeah, we got we got two or three callers lined up. One more, let's go.

SPEAKER_05 37:47

Okay, one more. This has got to do with uh uh federal taxes on social security. I've got a little uh downloaded piece of information from Finance Buff, once again on the internet, that you plug in your Social Security and what you're gonna make outside of Social Security. And being with I I got a wife who who we got through business school, the University of Indiana, with a 3.98 GPA. I don't even have to tell her what I want to do with finances. I gotta prove it. So this finance buff says you put in $70,000 worth of Social Security income, which luckily CBC and I together will be into starting when we both uh uh have a full year of Social Security next year. Uh we can add and this thing says, this calculator says that we can make up to an additional $20,000 on top of the $70,000 worth of Social Security and still pay no federal tax. Now I'm trying to suggest to my wife heavily not to worry about this that this is gonna happen. But like I said, she's uh prove it to me. I got the I've got the Bachelor of Science and Business, so prove it to me. Any suggestions on that, sirs?

SPEAKER_02 39:02

I will typically defer to a tax specialist when it comes to these questions. I'm not qualified to give that advice. The the the the formula to determine how much you ta your pay in taxes on your social security and what percentage of your social security benefits are taxable or not taxable is a very complicated one. Marvin's done multiple videos on this. I've watched them. Uh I still go online and use a calculator when I want to answer these questions.

SPEAKER_05 39:28

Great. Okay. Hey, I appreciate your time, gentlemen. Take care, Jeff. All right, hi.

SPEAKER_01 39:33

Bye-bye. Let's talk to Adam in Maryland. Adam, welcome to Medicare School Daily. What questions do you have for us?

SPEAKER_06 39:47

So the question I have, so I'm starting a little early. I am uh a little bit before the time that I have to pick uh pick Medicare. So I'm 60, but I'm you know, on the internet you see all sorts of information and I can't tell what's real and what's not real. And so I'm trying to figure out the differences between Medicare and Medicare supplement, I think it is, and Medicare advantage, and when do I need to and when do I need to pick a plan even if I'm covered under I'm currently current currently covered under my employer's insurance, but and I hope that for some time, but I understand, I think I heard somewhere you set up a picket and then you can defer. And I have a small window to do that, and I'm trying to get a little bit smarter about all this stuff because it's all a foreign language to me right now.

SPEAKER_02 40:33

Did uh Adam, did you say that you are 60 years old?

SPEAKER_06 40:37

I'm 60, yes, sir. And uh, but I know but time goes pretty quick. I think I have to pick something by the time I'm 65, and I tend to try to look at the information and kind of I don't try to make a snap decision. So this is me starting a little early, I guess. Uh I don't I think I come across one of your sites and I said, Oh, that's interesting. Um you know, and then you start, you know, the internet just kind of bombards you, and it's like I just need to figure out some ground truths, is what I'm trying to do right now. Like, can I wait till I'm can I when do I have to pick something? Do I have to pick something? And and you hear these, I mean, I know there I've heard of advantage plans and Medicare, Medicare supplement, and I I know very little about either of them, and but I also want to be prepared for kind of the future. So one of the other questions I have is if I pick a plan or a style plan, can I switch back and forth at some point like when you have open enrollment? Or are you locked in? If I pick advantage, are you always with advantage and you know those types of things?

SPEAKER_02 41:39

Well, it's better to be early than late, uh, Adam. If you're planning this far ahead, that's great. Uh you'll have it all figured out by the time you're going on Medicare. Most people can't go on Medicare until they're 65 years old. And so most people start looking for this stuff about 64. And so what the fact that you started looking is the reason that you're getting bombarded. Uh you can use an incognito tab on a browser if you don't want it telling you out uh and uh generating a bunch of phone calls. But um so you've got a couple of questions. Differences between supplement plans and advantage plans was one of them. And then can I switch between those during the annual enrollment period going forward? Those are your questions.

SPEAKER_06 42:19

Those are the two primary questions, yes, sir.

SPEAKER_02 42:21

Okay. Well, there's lots of time to make that decision. Again, it's probably a few years out, but we can uh give you a little bit of Medicare 101 and and briefly talk about the differences there. So um now you're also employed, and so you have insurance through your job, I believe you told me that. Is that right? That is correct. So you might not even have to be going on Medicare at 65 if you're still working, possibly. Still have health insurance, and it's a large employer with at least 20 employees, it might be farther into the future when you're making this decision.

SPEAKER_06 42:53

We're we're a pretty large employer, we're north of 30,000. So I we we check that box. But do I still have to make a selection and then defer it when I'm like 65? That's right. I think I heard there's a small window, and if you miss the window, you get added fees or every t every month or every every month you're late after that. Uh you have a so you still have to do some there's some actions that you have to do, I understand. And I'm not depend I'm not sure that anyone's gonna remind me to do them.

SPEAKER_01 43:21

You're you're gonna be fine. There's and if you think about it, it makes sense. The government would prefer that you stay on that employer plan forever until you're 150 years old, and they never have to cover you. So they're not gonna penalize you, and you don't have to do anything as long as you have employer provided coverage, right? Through a large employer. So there's nothing you have to do at sixty five, there's no box you have to check. The only exception would be if you are already receiving a social security check, which I doubt will be your situation. If you already receive a social security check, they will auto enroll you because they assume you're retired. But you're not going to be able to get it.

SPEAKER_06 44:00

Receiving any Social Security.

SPEAKER_02 44:02

Well, then you'll not be automatically enrolled. You won't have to do anything. I've heard people say, don't I have to register but decline something like that? No, there's nothing that you'll need to do.

SPEAKER_06 44:14

Okay, that's right. And that's what I've heard. Like I've heard you register and decline, and that's where I'm like, and I don't know where I heard it actually. I heard it in passing, and it's like that's a little fat- I mean, a little fact like that's like, oh, I better run that to ground because that's you know, because what I heard is it's like three months before your 65th birthday and three months after, and you have this little window. Um, and it wasn't clear what that window actually was, but it I also remember hearing in that and there was something online where they said if you miss the window, then you get penalized or you have an added thing.

SPEAKER_01 44:45

And now and all that all that all that is true if you don't have coverage from a large employer, right? Okay. But you do, so you're fine.

SPEAKER_06 44:53

Well, okay, fair fair enough. So I'm fine, good. So I don't need to do anything until I leave work, basically. That's right. All right. Um, okay, that's that that's good. So what are the large, and I don't know if you can tell me this, what are the large brushstroke differences between Medicare, Medicare supplement, which I think is kind of the original of the OG, and then recently, I don't know what recent really means, there's these advantage plans. And the advantage plans I've seen, I've seen a couple of them online that say, you know, zero copay, zero money, zero this and zero that. And I was like, zero doesn't make sense to me because someone's got to make, I mean, they got to collect fees somewhere along the way. But my big concern is that, you know, I I compare in my head advantage to like an HMO and then Medicare, uh, traditional Medicare is more like a PPO, so I can go anywhere as long as they accept the insurance with a PPO versus an HMO I can only stay in their network. And if I have, you know, if I'm 75 or 80 and I have a catastrophic diagnosis, you know, and then my the the place that has the cure is outside the network, then what do I do? That type of that's kind of the formula. That's kind of the kind of my question.

SPEAKER_02 46:12

Yes. Uh well, I think that you're right. Original Medicare is sort of like the ultimate PPO because you can use any doctor in the entire country. And Medicare Advantage plans will feel more like an HMO that's more restrictive on where you can go. That's just the beginning of it, though. Um I would say it like this. So uh Medicare is health insurance from the federal government instead of from your job, right? It's not from a private health insurance company. And so it's different. Many people would tell you better in three main ways. The first we just talked about, the network part. Original Medicare does not have a network, all right? Uh to my knowledge, every hospital in the country accepts original Medicare because if they don't, they don't get any federal funding. So and about 98% of all doctors in the country are accept original Medicare. So that first part thing we like is no networks. The second thing we like about Medicare is no referrals. You don't even have to have a primary care physician on Medicare, much less need their permission to see a different doctor. So no referrals is the second thing. And then the third thing that separates this from what you're used to is uh original Medicare requires no pre-authorizations. All right. Aside from some uh very obscure things having to do with uh Parkinson's disease, original Medicare does not require pre-authorization. As soon as your doctor is convinced that a test or a procedure is medically necessary for you, then it's approved. So these are the three things that's approved.

SPEAKER_06 47:42

Like can they can I can I approve it and then decide later not to cover something?

SPEAKER_02 47:49

No. No, that's not how you're gonna do that.

SPEAKER_06 47:50

I mean, I'll I'll run into that with I c I guess you call private insurance or my employer insurance, um where um we've had you know my wife had a diagnosis and we try to have some things recovered, and then they said, Oh no, we're not covering that now. You have to go through this onerous appeal process, which is brutal. Yeah. Um and not always, you know, and and so that's so they don't I mean, once they say, once a doctor says a medical it's and this is my word, medically necessary, and it's within the con within the structure of of um Medicare, you're you're you're kind of good.

SPEAKER_02 48:32

That's right. Again, we're talking about things that separate Medicare from what you're used to. You're used to private health insurance carriers. And with original Medicare, uh once some a doctor thinks it's medically necessary, it's FDA approved, then get on the table, buddy, because you can get your test done. All right. We don't really have to worry about them coming back later and saying, you know what, we decided no. So original Medicare is considered to be very good health insurance because again, no networks, no referrals, and no pre-authorizations. So it's good. But it's just a good start because at the end of the day, Medicare is only going to cover 80 percent of your medical bills, Adam, 80 percent of a doctor, of an ambulance, of a surgery, of an emergency room. It's the 20 percent left over that we're worried about. So that's why we get either a Medicare supplement plan or a Medicare Advantage plan. It's to either cover that leftover 20 percent or to otherwise get you out from underneath it. Now, a Medicare supplement plan is uh what we call option number one. Some people will tell you that this is the Cadillac option, where not only do you pay for original Medicare A and B, which is right now a couple hundred dollars a month, but you're gonna pay additionally a monthly premium for your Medicare supplement plan. That in Maryland might be another couple hundred dollars per month, and now you're up to four hundred. And then you need a drug plan. And those can cost.

SPEAKER_06 49:57

Is that income based as well on top of that?

SPEAKER_02 49:59

I mean it's a lot of people. No, it's not the Medicare supplement plan is not income-based, just Medicare B and D. So anyway, not to lose sight of what we're saying, you get original Medicare because you like it, because it's good, because it lets you go to anywhere with no preauthorizations, and then you buy a supplement plan to cover the leftover 20 percent, to cover the gaps. They call it a Medigap because it covers the gaps. Now, this is maybe $400 a month, maybe more than that, by the time you've added drug coverage and dental coverage, and so not everybody feels like they can afford a Cadillac. So there's an option number two, which is a Medicare Advantage plan, all right, which is a replacement of your original Medicare with a managed care program, either an HMO or a PPO, Adam, from a private health insurance carrier that will have networks, that will have pre-authorizations, and that will have out-of-pocket copests when you go to use it. If you're not paying $400 a month or $200 extra for a supplement plan, you're paying zero dollars for a Medicare Advantage plan most of the time. You're not paying up front with this one. You're paying as you go. So just think about eventually, are you going to be willing to pay extra to supplement the Medicare to enjoy having no network restrictions, no referrals, no pre-authorizations? Oh, and by the way, pretty much no out-of-pocket costs when you get sick because you're paying up front for a Medicare supplement plan, or will you not want to park a Cadillac in your driveway and you'd rather have something less expensive on a monthly basis, which is a Medicare Advantage plan? It doesn't quite work everywhere. And it can deny your procedures and your services. But at least it's only a couple hundred dollars a month instead of twice that. So it's early, but that's what you can be thinking about in the meantime. Uh we'll want to talk to you when you're either turning 65 or when you're a few months out from retirement. Then we'll give you a refresher in case you don't remember. Yeah, that's good.

SPEAKER_06 51:53

I mean the the what the um I mean right now I'm I'm in a what do you I'm in a high deductible um health plan, so I'm used to I mean I have to satisfy my deductible before I get anything covered at 100%. And I was I I went through the ringer a couple weeks ago on some something small where I was just looking for pricing transparency and they couldn't give it to me. So I said, this this is quasi-elective, I'm gonna wait till I know what my cost is because I've been burned before by private insurance in the past, where they said they've covered something and then it turns out they didn't. We've already done the procedure, so now you're on the hook to you're on the hook to pay for it. So I mean Medicare, so it's Medicare, uh original Medicare, Medicare, and then that covers um, and then there's a drug piece to it, and then and then there's the gap, and then there's Medicare gap, and that's kind of the kind of a Cadillac, and then the other one could be anything from you know, whatever is just all a Cadillac to like uh to like a um a Yugo or something. I'm dating myself, of course.

SPEAKER_02 52:56

Oh, it it'd probably be a Chevy. I mean it's not a Jalapi. Uh they're not garbage, they're not terrifying. They're just they're just not a they're just not a Cadillac. Oh, and by the way, your other question uh right now you have a high deductible health plan because you're reasonably healthy, and yeah, you went through something, you weren't quite sure what was gonna cost. But generally speaking, you got that high deductible health plan because you know next year you can change it. You can go to a low deductible plan the year after that or the year after that. But once you go on Medicare and when you make this decision, you need to make it like you're gonna get stuck with that decision. All right. It's not easy to change between these two in in the future.

SPEAKER_06 53:32

So we have a question hard, yeah.

SPEAKER_02 53:33

Uh-huh. That's right. So when we're helping you go on Medicare again a few years into the future, we'll make sure you understand that uh once you start down one of these paths, you may not be able to backtrack and go the other way. So very important uh to determine which one of these you want, because you can be making a lifetime decision.

SPEAKER_06 53:50

Right. And I tend to be around for a long time in that you know, you have a monthly, I assume you have a monthly cost just like everything else, and you know, you make the wrong decision, you can be out, you know. I've seen some of your videos online where you kind of go in and run some numbers, and the numbers right now, mostly because I'm working, don't look too terrible. Even the Medicare numbers don't look terrible. Um but again, once you don't have that income coming in, then it comes then it gets a little bit more real, I suppose, as well. But that's um but this is good information for me. I mean, I didn't realize I could wait, and you know, I'm a you know 65 is almost around the corner. I if I'm still employed by my employer, I can wait, I don't have to do anything at all, which is nice to know. Um, and um yeah, I could reach back to you all in a couple of years. Yeah, you guys reach back to me as well.

SPEAKER_01 54:42

Please reach out to us. We love to. Um uh just you know go to Medicare School.com. We've got a lot of education on there. There's a workshop on there, it's about an hour long called the Medicare Essentials Workshop. You know, you sound like somebody who likes to be prepared. I would check that out. Just keep watching stuff on the YouTube channel. We got to bounce to our next caller, but it was really nice talking with you. Thanks so much.

SPEAKER_06 55:05

Thank you. Have a good day. Thank you very much. Bye-bye.

SPEAKER_01 55:10

When you retire, you may move, whether that's at the beginning because it's time to get south, or maybe it's just something happens in life. You want to be closer to your kids. Well, what happens to Medicare whenever you retire? That's a big question a lot of people have, and you may have. Join us tomorrow. You're gonna learn what happens to all the different Medicare plans when you move from state to state or across the country.