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Medicare – What You Need to Know (with transcript)

During his career, Dean Zellers has been a Financial Advisor, Estate Planner and independent producer to offer clients access to all types of Insurance Policies. His expertise today lies in Health Insurance and the nuisances of Medicare where he has been advising families on for over 20 years and is one of the top selling agents in Northern California for Medicare Advantage plans.


Frank:                    Well, welcome to the aging boomers. I’m your host Frank Samson, and of course on our show we discuss so many of the issues facing boomers, their parents, and what of course is an aging population which I’m smack in the middle of. I want to remind everybody that today’s show is sponsored by Senior Care Authority. A senior placement and elder care consulting organization that has a national network of professionally trained and experienced local advisors to assist families. They’ll work with you in determining the right path for you or your loved one and discuss various long term care options whether it’s in home care, assisted living, or possibly memory care. Or maybe you just need an advocate to get advice from. At Senior Care Authority, you can talk to an advisor for your loved one. And so for a free 30 minute consultation with an advisor in your area, contact Senior Care Authority at 888-809-1231. Or you can go directly to the website at www.seniorcareauthority.com.

Frank:                    I want to just thank everybody so much. Our listening audience has grown at a tremendous amount. Most of you just download our app on … You can just go on your iPhone or Android phone, type in the aging boomers, download it for free, and you can listen to our guests, our interviews, our experts. And many of you of course go to iTunes, I Heart Radio, certainly you can go to our website, many do, at theagingboomers.com. So thank you so much and please get the word out to your friends and family. A lot of great information. And we’re going to have a lot of great information for you today as well.

Frank:                    We have with us actually a friend of mine, a local, who I work with personally. His name is Dean Zellers. And during his career, Dean has been a financial advisor, estate planner, and an independent producer to offer clients access to all types of insurance policies. His expertise today lies in health insurance and the nuances of Medicare where he has been advising families on for over 20 years and is one of the top selling agents in northern California for the Medicare Advantage Plan. So Dean, it’s thrilled to have you on The Aging Boomers. Thanks for joining us today. I know you’re out of town, so thanks so much for doing this.

Dean:                     Hey, Frank. Thank you for having me. I’m glad to always be there for you. You know, the fact that … If my voice is still coming in good?

Frank:                    Yeah, yeah. You’re fine. You’re fine.

Dean:                    Great. Excellent.

Frank:                    Great, great.

Dean:                    You know, for us in this world of Medicare, it certainly wasn’t supposed to be the only singular place that we wanted to be able to hang our hat on medical once you turn 65. And to be able to talk and give you the information as fast as I can, or as little as I can as fast as I can, I’d like to be able to do that for you and your listening …

Frank:                   Right. I know that this next period of time here that we have is going to be chock full of great information. Let’s just start out with some basics, Dean. Just … I don’t want to assume that people even understand what Medicare is. So why don’t … And I know they hear the term Medicare, Medicaid, Medical, but we’re going to talk today about Medicare. So explain what Medicare is.

Dean:                    Well I’m glad you made the difference. For instance, and the reason it gets confused in California is because we as a state have Medical. So people go, it’s Medicaid and Medical, what’s the difference? I go, well the difference is Medicare is the federal program that was never intended to be the full access to health insurance. It was supposed to be a decent plan, but it had some pitfalls to it. And Medicare when it was started basically said for anybody that was turning over 65 would have access to it as well as people that are pre-65 disabled.

Frank:                   Right. And so Medicare is really something that has been earned. In a sense, it’s health insurance, correct? Just like health insurance that we all purchase and pay a lot of money for. The time you turn 65, certainly there are certain requirements, but you can get Medicare which is pretty much health insurance. Is that right?

Dean:                    It is. And here’s the thing. When you apply for Medicare, not everybody gets it in terms of those who have been here maybe not enough years or put enough of what they call 40 quarters into the system. Or at least ten years into that pool of money. So most people qualify once they’ve been working for over ten years and put in money, they will automatically get a, as long as they turn 65 and they apply. Sometimes it just comes up … Normally I hear that social security just sends you the new card at age 65. But they also are asking you, do you want to sign up for a part B? Now that’s where the confusion comes in because Medicare likes to work with a lot of alphabet soup as we call it. There’s parts A and B, there’s plans A and F, there’s part D, there’s a part C, and we don’t want our clients to … We want them to understand the difference in those plans and parts so that the terminology is at least for us to be able to speak back and forth, it’s a lot easier.

Frank:                   Right, so before we start getting into some of the different plans, somebody who is turning 65 soon. What are the steps they need to take? I know that’s a lot of the work that you do is work with people at that age group and kind of help them. So can they stay with their current I guess plan that they’re on? I mean, there’s different plans, but lets say whatever it is. Or do they have to shift? Are they going to have to change doctors? How does it all work?

Dean:                    Oh, I don’t know if I can get that in in this conversation.

Frank:                    Generally say, do the best you can. Generally speaking.

Dean:                    Yeah, in general speaking, you want to have … If you’re leaving work, you’re not working, you’re 65, you want to get your part A and B. If you’ve left your group insurance, because there’s certain rules between people who have left their group insurance either by working and they wanted to stay in their old group insurance because somebody else is paying the bill. That’s one way. Now it’s a whole different rule if you’re a retiree and you’re paying for your health insurance under small group. That’s a different rule too. So what we want to make sure number one is that you call, that you talk to myself or your other broker or an agent or somebody that can give you a timeline of when’s the best time to apply for you. You may still … Maybe you won’t take it and maybe you won’t sign up for part B, but that’s the one thing we do not want you to do is make the wrong move and not sign up for a part A or a part B when you first age in.

Frank:                   So what is … I know we’re talking, you’ve mentioned part A and part B, and that was a question I was going to ask. Just explain to our listeners what is meant by Medicare part A and part B.

Dean:                    Okay, so when you take your part A, part A is going to be what they call the hospitalization charge. Medicare says we basically, here’s how hospitalization is going to be covered when you have part A. It’s normally going to cost you nothing for most people for part A.

Frank:                    Mm-hmm (affirmative).

Dean:                    And then there’s basically under A, there’s a 1,313 dollar deductible if you walk into the hospital for one day or up to 60 days. It doesn’t matter. But it’s per episode of going into the hospital. So you have that 1,300 dollars to make up. And that goes up a little bit every year depending on what inflation rates and what CMS decides. There’s also inside built into there, there’s basically hospice care and there’s blood. Why blood shows up on both, I don’t know, on parts A and B. Nobody could answer it even back in class. But that’s basically hospitalization.

Dean:                    Why part B is so critical and important, for those who have had to be paying for their health insurance, this is a great time of life. You’re turning 65, they go well … I said, it’s the last silver lining. And you’re going to be taking off, from the standpoint of an insurance guy, you’re taking off from the world of insurance that you’ve known all your life. If you had Kaiser, you can go back to Kaiser. But if you had other people paying your health insurance, or you’ve been paying that bill, now you get to take that responsibility. And now we get to find you a plan. Once you take that part A, you purchase your part B which covers the doctor visits, the labs, the x-rays, comes out to the scans, PET scans. That also has additional. But here’s the thing. Medicare says there’s 183 deductible for your part B, and you still have to pay 20 percent of the bill. And it continues to go on and on and on. There’s no what they consider, what you and I know as a MOOP, or a max out of pocket.

Frank:                    Mm-hmm (affirmative), okay.

Dean:                    So, and everybody’s going to be a little bit different. But generally most people come into my office before they’re 65. I love to see people about four to six months prior to 65 and make sure they have the right direction of travel. And that’s what any agent or broker should be able to do for you. They’re trying to confirm what you’re doing, it’s the right direction, and the timing of when to sign up.

Frank:                   Okay, so that was a question of mine. So four to six months before you turn 65 is when you should begin the process. All right. So here’s my question. You brought up a good point. People are working longer in the workplace now. So if you’re retired, you’re paying for your own insurance, maybe you’re paying through the Affordable Care Act or whatever the case may be. Getting on Medicare obviously is a big bonus. You’re going to save a lot of money. If you’re self employed, you have your own business, you’re paying for your own insurance, again getting on Medicare, a big bonus. If you’re working for somebody and they’re paying for your insurance or they’re paying a good share of it, the premium, and they’re going to continue to work for a while still beyond 65, should they apply for Medicare or should they hold off?

Dean:                    Well, let’s take that one issue. Part A is going to hit at age 65. A person decides, hey, I might work for another year. I might wait for two years until I’m 67, 68. Plus, my spouse has got coverage. And the teachers are a perfect example of someone that gets great health insurance, that has it paid for on their end, their dependent is paid for almost at 100 percent. Maybe some people are paying 200 to 300 dollars just for having their dependent. But their total cost for two 65 year olds to have health insurance is running somebody around 24 to 3000 dollars a month right now. And that same person says, hey, I’m not going to leave my group plan for another two years. Great. At least take your part A. Come back and see me when you’re ready to retire. Make sure we have enough time to set things in motion.

Dean:                    That is the advice we give everybody, and the other person in that particular one is what if you’re paying for your own health insurance? Covered California boots you off at 65 because they know you’re going to Medicare. And there’s no reason to keep you in the individual ACA compliant plans. So most people at age 65 take the part A. They pay about 134 dollars as a minimum for their part B, unless they qualify for what they call a low income subsidy because they don’t have enough income based on the 133 percent of the federal poverty level. Or there’s ones that may be highly compensated and have to pay an ERMA, which is an enrollment charge, for making too much money.

Frank:                    Okay, so …

Dean:                    And that on it’s own, Frank, is another thing to kind of look at and say, maybe I can eliminate my income or reduce my income. Because it’s based on a two year look back. And you go, what’s that mean? So you can see we can peel apart this onion pretty quickly and at least we can take all the curve balls out and have a source of direction. It’s just not as easy as we like. But it’s easy to plow your way through when you know what you’re looking for.

Frank:                    Yeah. You know, I know this whole process to you, you’ve been doing it for years. But to the average person, that’s pretty complicated. And that’s why we need people like you to help us through this. So let’s go back to the person who’s going to work for another year or two after age 65. You’re suggesting that they still sign up for A and B. So which of their insurance pays for their benefits? I mean, does the insurance that they have through work pay? Does Medicare pay? Who’s the primary? Maybe that’s getting too detailed, but I was just curious.

Dean:                    Yeah, because it could create a little bit of confusion. In this situation, let’s assume somebody turns 65. Definitely gets their part A, because that’s free. And they don’t know if they should take their part B because their employer is still primary. So there is no reason to take a part B and pay 134 dollars and turn it on. And where we hear people making that mistake is when they turn on their part B and pay 134 dollars is because they heard they might have a fine if they didn’t take it when they were 65. And that’s not true with people that are still working. That is the issue that we have most of the time.

Frank:                    Got it. Got it.

Dean:                    But I would rather have most people call us and say this is what we’re planning on doing. I say, that’s great. In fact, stay with your health plan. Pay the premium. Or because the numbers … We just look at the numbers and add them up and say, look, you’re only spending 300 dollars a month for your health insurance for you and your husband with a great PPO plan that you’ve had for the last 40 years. And if you come over to our side and everybody signs up, it could cost you 600 dollars based on everything that you’re buying.

Frank:                    Mm-hmm (affirmative). Okay, great. All right, so now we’re talking … Now let’s say somebody who’s either retired or has their own business. They’re self employed, and they’re turning 65 and they can’t wait to get on this because it’s going to save them a lot of money, okay. So they sign up for A and B, and now you hear about all these different additional programs. We see them advertised all the time in magazines and on TV. AARP comes out with all these things. So I hear the term Medicare Advantage. I hear the term Medicare Supplement. Is that all synonymous? Explain kind of what the additional policies are, generally. I know we can get quite detailed there. And why would it be beneficial for someone to take these supplemental policies?

Dean:                    On the supplemental side, when you age in at 65, you’ve taken your part A, you’ve taken your part B, it’s effective on the first month of your birthdate. So if your birthday’s on June 15th, it will be June 1st. So we set everything to start on a June 1st and we usually like to have you get your cards three months prior as Medicare asks for it. You receive your card, you call us back, but in the meantime we’ve set up a plan of direction as you said, Dean, Medicare Supp, Medicare Advantage, what do I do? I heard I had to get a prescription drug plan, otherwise I get fined. So those are basically … The health insurance carriers, their fault is that they send you everything in the mail. I get a big kick out of the fact that most people open up their mail and then just put it … I told them, just keep all that stuff, put it in a drawer or put it in a box and bring it to me and I’ll explain off of their stuff.

Dean:                    But it’s very confusing because you’re getting so many things in the mail. But your actual ability to buy health insurance and which plan works best for a person turning 65, it’s pretty simple once we figure out what’s important to you as a Medicare beneficiary. Who’s your doctor? What hospitals do you go to? Do you want to travel? Do you want to stay inside California, or would you like to go outside California and seek treatment? Once we know, any good broker, any good agent would be able to help you determine which plan’s going to work best. Then we also want to look at your budget and say, what did you budget for this? And most people, I say look, it’s going to be 330 dollars a month for everything. But as low as maybe 168 dollars a month for a Medicare Advantage plan. So if I get into the details, do you want me to touch on those details, Frank?

Frank:                    Well, you know, I think you answered a great question, and that is the range. The range could be in the mid 100s to over 300 dollars a month to almost have pretty much everything covered on the top end. Is that correct in conjunction with what the government’s paying for? Is that right?

Dean:                    That’s correct.

Frank:                    Yeah.

Dean:                    There are those that come in and say, I have cancer. I’ve had this, or I have these things I want to get done and I’ve been waiting to hit Medicare. I go, great. There is no medical questions. We have this magic window of what … Medicare loves to speak in all these short terms of SEPs, IEPs, CEPs, what they consider annual enrollment periods, initial enrollment periods. So we just have to pick a period that you’re enrolling in, and most people don’t have to answer many medical questions. A majority would be aging in. So we never ask that. They may ask, do you have end stage renal disease? Or do you smoke cigarettes? But it allows you to buy … this is your golden opportunity to buy anything you want.

Frank:                    Yeah. So I do have a question on a particular type of plan. I guess it’s called Medicare part D, as in drugs, right? So that’s your prescription drugs. So I know as we get older, it doesn’t happen all the time, but it just seems like there’s more drugs, prescription drugs at least, that we’re all having to take for various ailments and this and that. So in order to have prescriptions, I guess, better covered, some sort of a Medicare Advantage or supplemental plan is needed? Is that correct?

Dean:                    Well, again, let me put it this way. If you were following this on the radio, if you had a yellow sheet of paper, I’d have you put two lines down the middle of the paper so there’s three columns.

Frank:                    Right.

Dean:                    The first column is going to be your part A, your part B, and you an at least minimally buy a part D prescription drug plan. Those range in price anywhere from 19 dollars to 149 dollars, and in our area of where we live, there’s about 24 prescription drugs plans to choose from. And with that, we then have to ask and delve into it and ask, well unfortunately we’re not really kind of able to ask you what you’re taking. But you kind of have to volunteer that information so we can figure out based on what you take, what’s the milligrams, how many, how often, when do you go pick them up, where do you pick them up, do you want to use mail order? Are you comfortable? Would you be willing to change to a different pharmacy, because some of the prescription drug plans are the ones that they’ll dictate where you get the best bang for your buck. And if somebody says I’m not changing from CVS. This is what I do. This is what I want. I say, well based on that, this is the carrier for you. It’s 28 dollars and 50 cents and it doesn’t have a deductible. That’s a whole nother area when we start talking about how the prescription drug plans cover.

Frank:                    So what … Staying on that subject matter, what’s your opinion on … You hear about people ordering drugs through Canada. It’s cheaper and all that. Can you address that, just your professional opinion on that? Is that just something that people just shouldn’t deal with because you don’t know what you’re getting? Or what’s your thoughts there?

Dean:                    Well, there are some that have gotten very lucky and very smart and bought the right plan and bought prescriptions out of Canada. But there’s a lot of stories what you don’t hear. The one thing I would say, there’s nothing in this for me, we’ve always told clients, look, let me explain why we should be buying drugs in Canada. It’s because we’d be maybe maxing out on our prescriptions here in the states under the plan that I put you on.

Dean:                    Because there’s changes happening on the federal government side that says their prescription drug plans cover up to 3600 dollars of your total drug costs. That’s all the plans. That’s in with Kaiser, or a stand alone prescription drug plan. But once you max out how much they’re going to take out of your pool of money, you might owe another 1000 bucks. Is it better to go get one or two of your prescriptions out of Canada? Not all of them. But maybe one of them. Then you have to decide, which one gets my drugs to me from Canada without taking my information, without selling my information? And the one place I’ve sent people is called Pharmacychecker.com.

Frank:                   Hmm. Okay, great.

Dean:                    And again, there’s nothing in it for us other than to make sure that our clients are taken care of and that we teach them to fish. Or that we certainly can explain to those that are wanting to use their computer and reach out and go, yeah, I can do that, Dean. No, no problem. Let me show you how to do that.

Frank:                    Got it.

Dean:                    But when we first started doing this, Frank, and the internet was a little bit wild 15 years ago, you put in a Canadian pharmacy and you’re going to get 15,000 pages to pull up.

Frank:                    Right.

Dean:                    And we didn’t know if we were buying from somebody sitting in their underwear in the garage throwing tablets into a brown paper bag. I mean, we really didn’t know who we were talking to at the other end.

Frank:                    Yeah.

Dean:                    So we did have to use an 800 number. We would call people. We would look at Canadianpharmacy.com, and that was a good one for us at some time. USMeds.com was a good one. I think that’s the name.

Frank:                    So the advice I’m going to give to our listeners is don’t try to do this ourselves. There’s so much to know unless you’re already an expert in it. So Dean, how could somebody get ahold of you, whether your website, if you want to give out your phone, whatever you like. How do they get ahold of you? And I know there’s certain states, this is regulated, so there’s certain states you’re licensed in. I think you said California and Nevada. What were the other states you mentioned that you’re licensed in?

Dean:                    Right now, I’m in California, Nevada, and Texas.

Frank:                    Texas, okay. So you know, but if you’re not in those areas, certainly feel free to reach out to Dean and he can maybe direct you to somebody in your area. But how would someone get ahold of you, Dean?

Dean:                    Well the easiest way to call … Well actually the easiest way is email me, because even though I’m on the road today, Frank, I will answer an email faster today than I would a phone call, right?

Frank:                    Right.

Dean:                    We found that out. So email is dz, my name, D Zellers. At, my last name Zellers, z-e-l-l-e-r-s, INS.com. So it looks like dzzellersins.com.

Frank:                    Okay, got you, so d as in Dean. D as in Dean. DZ, I’m sorry. Let’s start all over again. DZ, okay, at Zellers, z-e-l-l-e-r-s, ins, like short for insurance .com, correct?

Dean:                    Correct. And I didn’t plan it that way. Just happened to be the first client who looked at my card and said, Zeller sins. Oh, I guess that does. I guess so.

Frank:                    Okay. Great, great. And do you have a website as well, or is it best just for them to email you?

Dean:                    Just email me. The website has to be in compliance and mine is not in compliance, so I pulled it and I haven’t put it back up yet. I want to make sure that when it goes back up and it goes live that I don’t get dinged.

Frank:                    Yeah, a lot of regulations in this industry. Many.

Dean:                    Correct.

Frank:                   Great. Great. Well, Dean, thank you so much for joining us on The Aging Boomers. A wealth of information, great stuff. I learned a lot too, so thank you so much for that. And I want to thank everybody for joining us on The Aging Boomers. Just be safe out there. And we’ll talk to you all soon.

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