Welcome to Medicare School Daily, where we help you understand Medicare,
save money, avoid mistakes, and above all else, get the most out of your Medicare benefits. Now,
today's topic is how does a group retiree plan work with Medicare? And what we're saying is
that you or your spouse, no longer working and you have a retiree plan, either you or your
spouses that's available to you. How is that going to work or coordinate with Medicare? Now
we're going to ask the question. I want to address five different, very important issues. Number one,
if you or your spouse are no longer working, we're on a retiree plan, you must enroll in
Medicare Parts A and B and notice at 65, you have no option in this area whatsoever. You're going
to have to enroll. Which means what? You're going to have to pay your Part B premium.
Now I'm doing this in 2020 right now and the part B premium for most people is
$144.60 a month. Now Part A is typically free as long as you have 40 quarters paid into Medicare.
Part A will be free, and part B is going to have a premium. And right now it's $144.60.
Now this is provided that if you’re a single person,
your income is below eighty seven thousand. That is correct. If you're a married couple,
one hundred and seventy four thousand modified adjusted gross income, if you're that or below
that, then that will be correct. If you're above those numbers, then you're part B premium will
actually be higher. But let's assume right now you're at $144.60. This is taken right out of
your Social Security check if you're taking Social Security. And if you're not, they're
going to build you this quarterly, which means it’ll be times three, which is basically about
four hundred fifty dollars every quarter. But either way, we have to pay for a part B premium.
So we're going to have to enroll in Medicare A and B. Number three: Now, when it comes to
the coordination of the benefits, who's going to pay first? Who's going to pay it? Again, this is
etched in stone. This is not up for negotiation. This is the way it's going to be. Medicare is
going to pay first. And your retiree plan, if you keep that plan, is going to pay second.
Now, some of you are going to decide, no, I don't want that retiree plan. I'm actually just going to
do a normal supplemental plan. OK, a supplemental plan. Those plans are given letters. Most people
get an F, a G, or an N plan, but the point is you have a supplemental plan. So if you're retired,
Medicare is going to pay first. That means those bills are going to go to Medicare. They're going
to pay their portion, and they're going to take the balance of that, if you're on a retiree plan,
it's going to go to them. If you don't have a retiree plan then the balance is going to go to
the supplemental plan. All right? So that's exactly the way it's going to pay.
Now, listen, some of you are going to be offered by your retiree
plan. They're going to offer you what is called an advantage plan, advantage plan. All right? Now,
an advantage plan is not a supplemental plan. An advantage plan is actually a replacement plan.
So in this instance, what happens is actually Medicare doesn't pay first for sure.
What's going to happen is you're on an advantage plan, and that means you're going to pay first,
which is your copay based upon whatever services you're getting, and the balance that then is going
to go to the advantage plan and then they're going to pay the remaining portion of that particular
bill. All right? So the whole point is this. This is the way things are going to be paid out,
depending upon what insurance you select. That brings us then to the fourth issue,
and that's this: the Part B date is critical. And here's what I'm talking about. Let's just
suppose that your birthday is I'm just going to make this up. It is January the 3, 1956.
And that means that you're turning 65, January 2021.
So when you enroll into Medicare, as you must do, your A date is going to say on the Medicare card
01/01/2021, and your B date is going to say 01/01/2021. Now this B date folks is critical,
and this is why: from the beginning of the B date, the way this works is that you can have
any supplemental plan that you would choose. Now remember, some of you are going to have a
retiree plan, some of you may not have a retiree plan and decide to get a supplemental plan.
Right? And then I said earlier, some of you, your only option is going to be
with the retiree plan. They're going to offer you some type of an advantage plan.
But what this B date is critical for folks are supplemental plans. These are what are
available to all people. But what's critical is during this six months of this B date,
you can have any supplemental plan that you want. Any of that are on the market regardless of your
health conditions, you're in guaranteed issue. In other words, the insurance company that you
want to buy that from has to write that policy to you, regardless of your health conditions,
and that six months starts on the B date. So in my example, that is going to be January,
February, March, April, May, June, which means from July one, 2021 on our six months is now over.
Now what happens? Let's suppose I am on Medicare is going to be first and I do take that retiree
plan and then nine months later, 0r two or three years later, what's going to happen
if I want to pick up a supplemental plan, my six months of opportunity to get anything I
want is now gone. Which means to pick up a normal supplemental plan, if you drop your retiree plan,
you're going to have to medically qualify to do that. Now, let's suppose this: that you
start with the supplemental plan. In other words, you say, I'm not going to take my retiree plan;
I'm going to use a supplemental plan. That just simply means for the first six months you can have
anything you want. During that six months, every insurance company has to write that policy for
you and give you that coverage. Now, let's suppose that you start with an advantage plan. You decide
that you're going to be on a retiree plan, and they don't offer a secondary plan,
they only offer an advantage plan. So once you've been on that advantage plan more than six months
and you ever want to get off of that now, we're going to have to medically qualify to do that.
And that's why I'm teaching you the B date of Medicare is critical because everyone that’s
eligible for Medicare goes into what is called a Medigap, which is Medicare supplemental plan,
a Medigap open enrollment period, but that only lasts six months, you can have anything you want.
So depending on what you decide up here is going to affect your eligibility for a supplemental plan
in the future. And then that takes us to issue number five, the retiree plan options. What
options do you have available? Well, number one, you may decide you want to keep that retiree plan,
or you may decide you want to drop that plan. And so who is it that may want to keep their retiree
plan? Well, in my opinion, this really boils down to finances. No matter what we do, we know we're
going to have to pay Medicare the $144.60. So the question would be, what does it cost you
out of your pocket to be covered by that retiree plan? And as a general rule of thumb,
if you're paying more than $150 or $200 a month for that retiree plan, you really may
not want to keep the plan. Now, if your spouse is younger and covered by the retiree plan and
you were to drop the retiree plan and then they will lose their coverage, then you are going to
most certainly probably want to stay on that plan unless your younger spouse has other insurance
options. All right? And so that can happen. But the point is, who wants to keep it? Well,
if the price is good and the coverage is good, which means you're happy with the deductibles,
you're happy with the way it's going to coordinate with Medicare, then you may want to keep the plan.
But again, if you're paying 150 to 200 dollars more a month for that plan, and you're the only
one covered by the plan, then you may want to look at just normal Medicare options. All right? So
that's the ones are going to they're going to keep it. The ones are going to drop it again, if you're
paying a lot for it, you're probably going to want to drop that plan. Now, another reason would be,
let's say that your company only offers you an advantage plan and that's it. And you're not
comfortable with the advantage plans. Why? Because of co-pays, because of network restrictions,
because of pre-certifications that are required on advantage plans, and because of what I just
told you earlier, after six months, you're going to have to medically qualify to get
off the advantage plan. And so the whole point is: there are some of you that will want to drop
that and you will go into the normal Medicare market, which means you would have A and B with
possibly a supplemental plan or you would have a normal market advantage plan. Again, I've got
lots of teaching on those for you to decide which way you want to go. But those are your options,
either keep it or drop it. And so these are the issues that you're going to have to address, but
you want to make sure that you're making the right decision because that decision could be permanent.