Ep. 154 – Roderick Spann – 5 Medicare Mistakes to Avoid

Are you aware of the things you can opt-in or not when it comes to your Medicare plan? It is important that you get enrolled in Medicare 3 months before turning 65 to avoid any delays caused by the existing backlog.

When it comes to Medicare, there’s part A which covers everything that happens in the hospital, and part B, which covers anything outside the hospital.

In this episode of the Secure Your Retirement podcast, we have Roderick Spann, a senior insurance specialist, talk about the 5 Medicare mistakes to avoid. Listen in to learn about the different parts of Medicare and the packages you can opt for.

In this episode, find out:

• Understanding the Medicare initial enrolment period and why it’s important.
• Understanding Medicare part B – insurance that covers anything outside the hospital.
• Part D – the importance of analyzing your prescription drug coverage.
• The original Medicare, what it covers, and the importance of having a Medicare supplement.
• The difference between a Medicare Advantage plan and a Medicare supplement.
• The benefits of comparing and understanding your retiree package plan and the Medicare plan.
• Speak to a professional to give you unbiased advice tailored to your specific Medicare needs.
• The process of getting enrolled into Medicare right before your 65th birthday.

Tweetable Quotes:

• “Original Medicare only covers 80% of your medically necessary services.”– Roderick Spann
• “Medicare is not one size fits all; a prescription plan that works for one person in one state or one specific zip code may not work for another person.”– Roderick Spann

Get in Touch with Roderick:

• LinkedIn: https://www.linkedin.com/in/roderickspann/

Resources:

If you are in or nearing retirement and you want to gain clarity on what questions you should be asking, learn what the biggest retirement myths are, and identify what you can do to achieve peace of mind for your retirement, get started today by requesting our complimentary video course, Four Steps to Secure Your Retirement!

To access the course, simply visit POMWealth.net/podcast.

Here’s the Full Transcript:

Radon Stancil:	Welcome everyone to our podcast. And this week we have a very special guest. Our goal in every one of our podcasts is to bring something of value in one of three areas. One is financial, the other’s legacy, and then lifestyle today is something that can affect us in a lot of different ways. It might hit on a couple different topics, but it’s on this idea being able to navigate and understand Medicare. And I’m going to tell you, it’s not that easy. I’ve worked around this for over 20 years and I still get confused by all the different plans. So we wanted to bring on an expert and we got a guy who I think is going to help us a lot. His name is Roderick Spann. So Roderick, thank you so much for coming on and talking with us and sharing all of the good information you’re going to share with us today.
Roderick Spann:	Thanks so much for having me. I appreciate the invitation.
Radon Stancil:	Well good. So here’s the theme. The theme is the five biggest mistakes made by most Medicare beneficiaries. So Medicare is something that we get at 65. We get put on Medicare. It’s not really a thing that we wouldn’t do, but then there’s other things that are left over after that. And there’s things that we opt in for, there’s things that we don’t opt in for. So what we’re going to do is we’re going to hit these five issues, these five things. And Roderick we just want you to kind of help us through. So one is this idea of enrolling in Part B. And the way I read this with the information that we’ve got here is that it’s something that you have to enroll into, so it could be a mistake not enrolling into it. So can you kind of give us what this is and help us to understand it?
Roderick Spann:	Yeah. Yeah. So with Medicare, there’s what’s called an initial enrollment period, and that basically revolves around a person’s 65th birthday. So it includes the three months before you turn 65, the month you turn 65 and then three months after. Enrolling, generally a person’s going to enroll the three months before they turn 65. The reason for that is because when they do that, their Medicare will actually start the first of the month that they turn 65. If they wait any time period after that, there’s delays and there’s possibly penalties for the late start of their Part B. That’s probably one of the biggest things we see.
	Secondly, if a person is actually working, if they have creditable health coverage through their job, they actually don’t need to enroll in Part B. It’s a choice that they would have. If their employer has more than 20 employees, then they’d be able to stay on the group plan. And they would be able to delay their enrollment in Part B. But if their employer is actually a small group plan, less than 20 employees, then they would actually need to enroll in Part B since Medicare will be primary. That’s another mistake, a bit of confusion on the part of Medicare beneficiaries, not exactly knowing when it’s actually required and when they should actually do it, the timing of it.
Murs Tariq:	What is the quick description of what Part B is, just for anyone that maybe at 55, 60 hasn’t really done a lot, as far as the research in the Medicare. What is the Part B actually provide for them?
Roderick Spann:	Okay. Yeah. Excellent question. Part B is actually a medical insurance. So it’s everything that takes place outside of the hospital. Part A of Medicare covers everything. If you’re admitted into the hospital, room and board, skilled nursing care. So Part B covers your doctor’s visits, any outpatient surgery, expensive things like cat scans, MRIs, chemotherapy, kidney dialysis. Part B really is that specific part of your medical care.
Murs Tariq:	Yeah, so it’s kind of like the insurance that we’re already used to having while we’re working, is essentially what Part B is so very important. You want to make sure you do that on a timely manner and think through Part B at the time that you should be enrolling. And also that three month window I’ve heard, you kind of want to start right at the beginning of the three months, just because there are backlogs and you want to get in and you want to make sure it starts on your 65th birthday. So I think that’s a good point there too.
	The second mistake here that we want to talk about is, now this is going into a different Part D, which D, an easy way to remember that as D is for drug and drug coverage and prescriptions. So take us through that as far as how someone needs to make that decision around Part D.
Roderick Spann:	So what we generally see with these Part D prescription plans is oftentimes a person, if they’re not working with an advisor or someone who kind of understands how these plans work, they may just pick a plan on name recognition. Or perhaps it’s what one of their friends or family members have.
	But these Part D prescription plans are all very different. There’s about 25 to 30 Part D prescription plans available in each state. They all have different formularies, different co-pays, different premiums. And there’s no one size fits all when it comes to Part D. It’s very specific to a person’s list of medications. So if a person doesn’t analyze their prescription drug coverage, they could be paying way more than they need, not just by being in the wrong plan, but secondly, by not going to the right pharmacy. Almost all of these plans also have a preferred pharmacy that you’ll get the best rate. If you go to the wrong pharmacy, you literally could be paying thousands of dollars more than you need to.
	And so this analyzation of a person’s prescription drug coverage is something that we recommend for all of our clients. It’s something that we do every single year during that annual election period from October 15th through December 7th. And then any changes that take place then will go into effect the first of the following year. So that’s an extremely important aspect of a person’s Medicare coverage.
Radon Stancil:	Now, is this something too, that you’re kind of doing if you’re turning 65 or whatever that you would want to kind of figure all this out that three months prior, that’s kind of the thing, so you have all of it ready to go?
Roderick Spann:	Yeah, a thousand percent. So the same initial enrollment period for Part B applies to Part D of Medicare as well. So you can take a look at your coverage three months before. That’s when we recommend, three months before. So that your Part B and your Part D prescription drug coverage goes into effect the first of the month that you turn 65.
Radon Stancil:	Okay, great. So now we’re going to move on to this other part. And to me, this part, this next mistake or this next thing of trying to understand, again, just adds to me another layer of complication. You’ve got this Medicare, right? You got Part B, Part D, Part A, and then there’s still a gap that a person would have to pay on their own outside of their deductible as a part of their deductibles. And so now what a person does is say, “Now I want to go buy this plan that’s going to help me with all these things.” And you can get a Medicare supplement, or you can do this thing called Medicare Advantage. So I guess we got to analyze this. Can you kind of help us to think it through? What is the difference between the two, I guess, and what’s the issue?
Roderick Spann:	Yeah, yeah. So this is the topic of Medicare supplements, or Medi gap plans as they may be referred to at times. And the difference between them and the Medicare Advantage plans is something we discuss often. How original Medicare works, just backtracking a bit, we have original Medicare, which is Part A and B. In a very general sense, original Medicare only covers 80% of your medically necessary services. So if you only had parts A and B of Medicare, you would be responsible for 20% of an unlimited amount.
	Now what some people will do is they’ll go and they’ll shop for a Medicare supplement or a Medi gap plan that actually does exactly what its name implies. It fills the gaps that original Medicare does not. It supplements your original Medicare by helping to pay that extra 20%. So they work in connection with each other.
	A Medicare Advantage plan is totally different. Even though you still are responsible for paying your premium to the government for original Medicare, a Medicare Advantage plan actually takes you off of original Medicare and puts you into a fully privatized insurance policy, more like what you’re used to through your employer, like an HMO, a PPO, a point of service kind of plan.
	And some of the biggest differences between those two routes, a supplement and an Advantage plan, is really cost as well as choice of doctors. With the original Medicare and a supplement, you’re able to go to any provider, any hospital in the United States and its territories that participates with Medicare. So right now that’s about 99% of hospitals and over 90% of providers. With a Medicare Advantage plan, again, it’s like an HMO or a PPO. So it’s highly regionalized. It’s localized to your specific area where you have to go to the doctors and hospitals that are in that network. Even if you have a type of plan that allows you to go outside of network, there’s still rules and stipulations that must be followed.
	So there are two different ways to get your Medicare coverage. A supplement works along with original Medicare, which still gives you that freedom. And then an Advantage plan replaces your original Medicare, but sometimes they’ll throw in some additional benefits like rides to the doctor, some dental, some vision, and other things that could be a benefit to you.
Murs Tariq:	So it looks like a recurring theme here, and all these mistakes is really you got to know what is going to work best for you. You got to understand your own situation before you can really go out and start shopping, because all these plans have different little nuances to them and different parts that may or may not apply to you. And that can affect how much you’re paying, it can affect how much coverage you’re going to get. And so that kind of leads me into the next one here is, all right, now let’s say this. We have a scenario of someone that actually has retiree coverage or they are still working and covered by an employer plan. And they just assume that means that they don’t need any of this Medicare stuff. They don’t need any of these other parts that are available to them once they turn 65. Why is that a mistake to make and assume that everything is good with the current thing that they have?
Roderick Spann:	Yeah. Yeah. I think you’re correct there in the sense of just analyzing your coverage is the most important part, specifically for this aspect of retiree coverage. Not every retiree package is going to be that great. The coverage may not be that great. The cost that you may have to pay may not be the most cost effective. Some of these retiree plans, it’s a $0 premium and you get great coverage. So obviously you would probably want to stick with that plan. But now more than often, we’re seeing with some of these retiree packages, there’s a monthly premium that’s involved, there’s large copays and maximum out of pockets that, when compared to original Medicare or a Medicare Advantage plan, it just seems that the Medicare route may be more cost effective.
	So just assuming that your retiree package is the best one for you may not be the best decision. Being able to understand what your cost and coverage would be, and then comparing that to what Medicare and a supplement or a Medicare Advantage plan may offer would be to your best benefit because oftentimes, they don’t balance each other out.
Radon Stancil:	Great. So that’s going to take us now to our last of the five here. And this one’s kind of funny to me because we jokingly say that because we deal with investing and we deal with people’s retirement plans. And basically, a lot of times people say, “Oh, you ought to buy this stock.” “And what’d you base that on?” “Well, my neighbor has it.” And it’s like, “Okay. Well, what kind of analysis is that?” “I don’t know, but we talked about it and we think this is a cool stock.” And so this last one is you basically are saying it’s a mistake to select a plan based on maybe what a family member had as or a friend has, and that being your decision making. So tell us what can go wrong there.
Roderick Spann:	Yeah. Well, just like you said in your example, almost everything can go wrong. Unfortunately, we love our friends, right? We love our family, but they may not be the most experienced or they may not have the best insight when it comes to your Medicare choices. As we mentioned at the beginning, Medicare is not one size fits all. A prescription plan that works for one person in one state or one specific zip code may not work for another person in a different state, different zip code, different age, different gender. All of these things are taken into account. So even though we love our friends, we love our family. It’s probably best to speak to someone who’s a professional in the area that can give unbiased advice that’s really tailored to your specific situation.
Radon Stancil:	Great. I got one quick question. Do you have a question too? You can go ahead. I don’t want to go out of turn.
Murs Tariq:	No, I was going to kind of sum up a little bit. But I look at it from the perspective of, let’s say we have all these decisions that we have to make in life, whether it’s buying a car or buying a house or choosing the right financial advisor for you. There’s all this due diligence that we need to be doing, doing the research. “What types of bells and whistles do I want on the car? What types of amenities do I want in this house that I’m going to buy?” And do the research on it. “What type of advisor do I want to be working with? Are they active? Are they more retirement based?”
	And so on the same token, I think Medicare should not get neglected. While it is very complicated and it can be a little intimidating, there’s a lot of things here that could cost you if you don’t do the right research and you don’t look around for things that are going to specifically apply to you. That’s why I think that the power of this message here and the story is so good. So I just want to say thanks for hopping on and giving us some insight here.
Radon Stancil:	[crosstalk] Yeah. And I’ve got a quick question for you that I wanted to ask, is somebody’s looking at this thing, say they’re 64. They’re getting close to 65. Could you kind of walk us through, if somebody did reach out to you, what that would look like. And let’s say that they’re trying to figure this thing out. So they’d say, “Hey, instead of each trying to do it myself, I’m going to reach out to another person who is an expert in this field.” Could you kind of walk us through what that would look like if they did that? What would that conversation be like?
Roderick Spann:	Yeah. Yeah. Well, basically most conversations should take much less than an hour. But basically just we’ll get an understanding of where you are. One, if you’re looking to retire, if you’re going to continue working past the age of 65. Is your current insurance covering just yourself? Is it covering your spouse? Is it covering any other family members? Kind of getting a better idea of your whole health insurance picture. And then based on that information, we’ll be able to quickly run you some quotes, give you a couple scenarios, different routes that you’d be able to go. And then basically after that, there’s one small section that is your responsibility. And then we actually are able to assist with the enrollment in the rest of your Medicare plan. So not only do we educate, but we also assist with the enrollment of these specific Medicare plans. So it’s a pretty short and sweet kind of conversation, pretty straightforward.
Radon Stancil:	Great. So if somebody is thinking, “Hey, I need to get help with this,” what’s the best way for them to reach out to you and get more information?
Roderick Spann:	They can just give me a call directly, (908) 481-5678. Or they can send me an email at Roderick@senior-advisors.com. We’re trying to always stay available. So if you send me an email or you give us a call and you leave a message, we’ll get back to you as quickly as possible.
Radon Stancil:	All right. So if you’re listening to this and you just heard him give you that email and that phone number, don’t worry. You don’t have to look very far. It’s right on the website or it’s in the show notes, wherever you’re listening to the podcast. Roderick, we do, again, thank you so much for taking some time out of your day and sharing it here and giving us such good things to think about when it comes to Medicare.
Roderick Spann:	Awesome. Thank you guys so much. I appreciate it.