Episode 31:Pre-Retiree Education Series 4 of 5: Understanding Medicare Basics

 

Hosts: Madison Demora and Mike Garry

Episode Overview

In this fourth installment of the Pre-Retiree Education Series, Mike Garry and Madison Demora break down the fundamentals of Medicare coverage. The episode provides a clear explanation of Medicare’s different parts, enrollment periods, and supplemental coverage options. Mike shares expert insights on making informed decisions about Medicare coverage and avoiding costly penalties through proper timing of enrollment.

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Timestamps

  • 00:08 – 00:42 – Introduction to episode topic: Understanding Medicare Basics
  • 00:43 – 01:05 – Understanding Medicare Coverage Types
  • 01:06– 01:31 – Medicare Advantage Plans Explained
  • 01:32 – 01:57 – Medicare Eligibility and Enrollment
  • 01:58 – 02:22 – Supplementing Medicare with Medigap
  • 02:23 – 02:50 – Medicare Parts A vs. Part B: Coverage
  • 02:51 – 03:14 – Advantages of Medicare Advantage Plans
  • 03:15 – 04:07 – Importance of the Initial enrollment Period (IEP)
  • 04:08 – 04:31 – Medigap Policies and Their Role
  • 04:32 – 05:13 – Deciding on Supplemental Coverage

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Episode Glossary

 

  • Medicare: A federal health insurance program for people aged 65 and older, and certain younger individuals with disabilities or specific medical conditions.
  • Medigap (Medicare Supplement Insurance): Private insurance policies that help cover some of the out-of-pocket costs not covered by Original Medicare, such as copayments, coinsurance, and deductibles.
  • Initial Enrollment Period (IEP): A seven-month period around the time a person turns 65 during which they can enroll in Medicare without facing a late-enrollment penalty.
  • Medicare Specialist: A professional or counselor who helps individuals navigate the complexities of Medicare, including plan options and enrollment.
Financial advisor Mike Garry and host Madison Demora explaining Medicare basics on Not Just Numbers podcast Episode 31Play Video

Key Takeaways

  • Medicare Structure: Four main types of coverage available – Part A (hospital), Part B (medical), Part C (Medicare Advantage), and Part D (prescription drugs).
  • Enrollment Timing: Initial enrollment period around age 65 is crucial, as missing it can result in lifetime premium penalties unless covered by qualifying employer plan.
  • Medicare Advantage Benefits: Part C plans combine Parts A and B coverage, often including additional benefits and different cost structures through private insurers.
  • Supplemental Coverage: Medigap policies help cover out-of-pocket costs like copayments and deductibles for those with original Medicare.
  • Part A Coverage: Focuses on inpatient hospital care, skilled nursing facilities, hospice care, and home health services.
  • Part B Services: Covers medical services including doctor visits, outpatient care, preventive services, and durable medical equipment.
  • Decision Factors: Choosing supplemental coverage should consider individual healthcare needs, budget, and preferences for managing out-of-pocket costs.

Transcript

Episode 31: Pre-Retiree Education Series 4 of 5: Understanding Medicare Basics

Table of Contents

Introduction

Madison: Hello, everyone, and welcome to Not Just Numbers Honest Conversations with a Financial Advisor and Lawyer. I am Madison Demora and I am here with Mike Garry. Mike is a financial advisor and a CFP and the founder and the CEO of Yardley Wealth Management. He is also an estate planning lawyer and his law firm is Yardley Estate Planning. Hey, Mike.

Mike: Hey, Maddie, how are you?

Madison: Good. Good. So everyone, welcome to our series four out of five. Today we are going to discuss Understanding Medicare Basics.

Types of Medicare Coverage

Madison: So, Mike, my first question for you. What are the different types of Medicare coverage available to beneficiaries?

Mike: Sure. Medicare offers four main types of coverage. Part A, which is hospital insurance, Part B is medical insurance, Part C is Medicare Advantage plans, and Part D is prescription drug coverages.

Medicare Advantage Plans

Madison: Okay, so what are Medicare Advantage plans and how do they differ from original Medicare Part A and part B?

Mike: Sure. Medicare Advantage plans, also known as Part C, are private health insurance plans that offer coverage for both medical and hospital services. They often include additional benefits like prescription drug coverage and may have different cost structures and networks compared to original Medicare.

Medicare Eligibility and Enrollment

Madison: Okay. So, who is eligible for Medicare and what is the enrollment process for Medicare?

Mike: Sure, so most US citizens or legal residents age 65 and older are eligible for Medicare. The enrollment process typically involves signing up during your initial enrollment period, which is around your 65th birthday, and some may also be eligible due to disability or certain medical conditions earlier.

Supplemental Coverage

Madison: Okay. So, how can individuals supplement their Medicare coverage to fill in the gaps of Part A and part B?

Mike: Sure, so individuals can supplement Medicare by purchasing a Medicare supplement called Medigap policy, which helps cover out of pocket costs like co payments and deductibles. Another option is to enroll in a Medicare part D prescription drug plan to cover prescription costs.

Part A vs Part B Coverage

Madison: Okay, so what specific types of healthcare services does Medicare part A cover compared to Medicare Part B?

Mike: Sure. Medicare Part A primarily covers inpatient hospital care, skilled nursing facility care, hospice care, and home health care services. Medicare Part B covers medical services such as doctor visits, outpatient care, preventive services, and durable medical equipment.

Medicare Advantage Benefits

Madison: So, can you explain how Medicare Advantage plans operate and highlight their advantages over original Medicare?

Mike: Sure. So, Medicare Advantage plans are offered by private insurers and combine Part A and part B coverage. They often include extra benefits like prescription drug coverage and may have lower out of pocket costs. They also typically have a network of healthcare providers.

Initial Enrollment Period

Madison: Okay. So, what is the initial enrollment period (IEP) for Medicare, and why should eligible individuals pay attention to it?

Mike: Sure. The IEP is the initial window during which individuals can roll in Medicare without penalty. It’s important because missing this period may result in higher premiums for part B and part D if you enroll later. Those higher premiums are like for the rest of your life. So enroll in Medicare by 65 unless you’re covered by an employer plan and a specific type of employer plan. So you need to look into it. And then if you are in an employer plan that’s eligible that you don’t have to yet sign up for Medicare, you can do that, but then make sure once you’re planning to retire that you start to the signup process, the enrollment process for Medicare. It’s really important.

Medigap Policies

Madison: So what are Medigap policies and how do they complement original Medicare coverage?

Mike: Sure. They’re private insurance plans and they’re designed to fill gaps, right, medigap, In original Medicare. They help cover expenses like deductibles, co pays and other out of pocket costs. You must have original Medicare part A and part B to purchase a Medigap policy.

Deciding on Coverage

Madison: Okay. How can individuals decide if they need supplement coverage beyond original Medicare? And what factors should they take into account when selecting such coverage?

Mike: Sure. You know, you need to consider your healthcare needs, budget and preferences. If you want to minimize out of pocket costs, protect against unexpected medical expenses, or have specific health care needs, supplemental coverage like Medigap or a part D may be a good choice. Consulting with a Medicare specialist or counselor can also help with the decision. It’s a big thing, and people tell us how complicated it is. It would be a good idea to get some help with it, I think.

Conclusion

Madison: Yeah. All right, everyone, thank you for listening to our fourth series out of five. Join us for our next episode where we will be talking about managing the transition to retirement. For more information on Yardley Wealth Management or Yardley Estate Planning, you can visit our websites at yardleywealth.net and yardleyestate.net. You can also follow us on socials at Yardley Wealth Management this podcast has been produced by Madison Demora and Mike Garry with technical and artistic help from Poe Productions.

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