Halal Money Matters Podcast

Episode 30 - Understanding Medicare with Jeremy Loween

[music]

Scott St. Clair:
The thoughts of opinions expressed on Halal Money Matters do not necessarily reflect the views of Saturna Capital, Amana Mutual Funds, or their affiliates. This episode's guest, Jeremy Loween, is an insurance broker for McGregor Benefits in Washington State. McGregor Benefits does not offer every plan in your area. Please contact medicare.gov or 1-800-MEDICARE or your local state health insurance program SHIP to get information on all your options.

Monem Salam:
Welcome to Halal Money Matters, sponsored by Saturna Capital. I'm Monem Salam.

Scott St. Clair:
I'm Scott St. Clair.

Monem Salam:
And, Scott, we have a very, very interesting episode today. When we were talking about this thing, I thought, you know, Medicare and what could be so complicated could really fit 40 minutes worth of an episode in there. But I was completely blown out by the amount of information that I learned.

Scott St. Clair:
This is by far the most I've learned in the episode that we've done as well. We've got Jeremy Loween with us from McGregor benefits, a health insurance agency here in Washington state. He's here to walk us through the private the public aspects of Medicare. It's going to be a long road, but it's going to be worth it.

Monem Salam:
I initially thought it was like, no big deal, like, I turn whatever age I do and government kicks in and it'll be everything will be great. But there's a lot of stuff we have to do on our end and some of the stuff we don't do it. We actually get penalized for it.

Scott St. Clair:
There's a lot going on here, and I think our listeners are going to learn a lot.

Monem Salam:
Let's get started.

Scott St. Clair:
Let's do it.

[music]

Scott St. Clair:
Well, thanks for joining us on the podcast today, Jeremy. Before we dive into it, do you want to tell us a little bit about yourself?

Jeremy Loween:
Sure. Yeah. So born and raised in Montana. Moved to Washington State in 2008. Went to school at Pacific Lutheran University. So I went there on a music scholarship, which was my reason for moving to the state, and then met my wife in college, and she brought me up to Bellingham in 2012, when we got married. So I've been working in health insurance for the past few years now and really found my niche in Medicare, which is why I do what I do, and on the health insurance side.

Monem Salam:
I just wanted to clear the air a little bit and talk and just give us the differences. First of all, because people sometimes get confused about Medicaid and Medicare.

Jeremy Loween:
When you hear the term Medicaid, it's not what I do personally. I'm a health insurance broker. Medicaid is simply the federal program that allows you to get assistance financially if you are under certain income and assets. Think of it as typically lower income, lower assets as Medicaid, Medicare being the health insurance program available to anybody that's 65 or older as a general rule.

Monem Salam:
So this reason why I wanted to ask you that, because today we're specifically talking about Medicare, which is going to be the one that's for older than 65, health care.

Jeremy Loween:
Correct.

Scott St. Clair:
Okay. I have to ask, what instrument do you play?

Jeremy Loween:
So I'm a singer. Yeah. Tenor one. All right.

Scott St. Clair:
So choir.

Jeremy Loween:
So I play my voice.

Monem Salam:
So can you do a little bit of a Medicare song for us? Medicare jingle?

Jeremy Loween:
(sings) Medicare Parts A and B.

Monem Salam:
You know, when my dad turned 65, it was really confusing to be able to figure out what exactly to do. We wanted to kind of help our listeners understand that if they're gonna come in close to that age, or if they if they come across what's called open enrollment, I guess, towards the end of the year, how can they change and then those type of things and that's kind of be the topic, that we're discussing today. Let's start off and, and let's talk about the person that, you know, maybe is 2 or 3 years away from retirement or away from 65. Is there anything they have to be, thinking about or before they get to that age of 65?

Jeremy Loween:
You bet. That's typically the target client that I work with is people that are approaching the Medicare age. The reason being is they get a lot of information that's misleading and confusing. The general rule here is that you have to sign up for Medicare prior to turning 65, no matter what. It's called your initial enrollment window. It's a seven month period surrounding the month of your birthday. So if you are, let's say, January birthday, three months prior to that, in October, you could start the process of enrolling into Medicare Part A, at least. That starts the month of your birthday, the very first day of that month. Now, if you are planning on staying on employer coverage, you're working past the age of 65, you don't have to join Medicare in its entirety.
And there's a process to that.

Monem Salam:
Okay, so now you just mentioned the first one, just Part A. So can you explain that a little bit more?

Jeremy Loween:
Sure. So there's two components to Medicare, Part A and B. Part A is what we paid into through our working years. So when we're paying through our payroll taxes and you look at that Medicare bracket, that goes into Part A, which is your hospital insurance. Primarily just think of that as your catastrophic insurance. Being admitted overnight into the hospital, going into a skilled nursing facility, which is simply just kind of ongoing rehab before you're ready to go home, and then end of life hospice care is kind of that third tier under Part A.

Monem Salam:
So there are a lot of people who continue to work until they're maybe 70 or sometimes later than that. So you're basically saying you still have to sign up. You might not have to enroll.

Jeremy Loween:
Yeah, correct. So no matter what you're doing is you're signing up for Medicare. Part A would go into effect in that scenario. But if you're staying on credible employer coverage, you defer your Part B of Medicare. You don't want that to go into effect if you're staying on health insurance through an employer.

Monem Salam:
Great. Now, let's talk about Part B.

Jeremy Loween:
Sure. So Part B, consider that to be the more common usage of your health insurance. That's going to be your doctor's insurance. Going to see a primary care physician or a specialist, outpatient therapies and surgeries. So let's say you're going in for a knee surgery or a knee replacement. Right? That would be under Part B. The more common usages that we have for our health insurance all fall under Part B.

Monem Salam:
Is it really a good program? And if I was still employed, should I drop my employer benefit and actually go with Medicare Part B? Or is there like a formula that you use to to be able to kind of…

Jeremy Loween:
Yeah, there's certainly a formula. So the idea here is that if your employer coverage is working well for you, you're not paying an arm and a leg out of your own paycheck to get onto that plan, then certainly there's no need to activate your Part B. Once you come on to Part B, you do have to start paying a premium. Everybody that joins Medicare has to pay this unless they have low income and low assets, where they can get kind of federal assistance. For most of the people listening, there's going to be a standard premium. And that is in 2024, just under $175 per month. That number changes every year. And they can just kind of increase that based on inflation or what the current economic situation looks like.

Monem Salam:
So my employer is offering me something, and I know that it's whatever the fixed rate is, $175, that I'm paying for Part B, right. What's the math like? Should I look at it on a benefit side, or should I look at it from the cost side of how much I'm having to pay through the employer or through the, through the Medicare.

Jeremy Loween:
So from the standpoint of the access to the services that you have, let's say just going to the doctor and getting coverage for a chiropractor or a dentist. Right? Medicare only covers your medical, right? It's going to cover your hospital on the catastrophic Part A, and it's going to cover your medical, going to the doctor's appointments on Part B. Medicare itself does not cover things like routine dental, vision or hearing benefits. And so there is certainly some changes that happen right? When people come off of their employer plan, they go on to Medicare, it can be a little bit of a shock. And the options and the programs are pretty overwhelming to sort through. That's really where I come in, where I can kind of sort through what's pertinent to them and what that coverage should look like.

Monem Salam:
If I'm, either myself, which I'm not 65, know, just to be clear, you know, in, in people like myself who are now turning 65 and I'm really looking at it going, oh my God, I have no idea what I'm what I'm doing. They would come to people like you and say, hey, I need some help figuring this thing out. Can you help me?

Jeremy Loween:
You bet. So I would say, come into my office or give me a call. We'll take a look at your current insurance, your current costs on what you have with your health insurance through the employer. And then we'll take a look at what it looks like to join Medicare, what those costs would look like and what the plan options are. Everybody has to pay that premium for Part B, so if your income is above a certain threshold, again, above that standard premium amount, your income goes up pretty significantly due to what's called a modified adjusted gross income or the IRMAA. So the IRMAA is what they use to kind of make up for your high income and assets to fund the program of Medicare. So there's more money to play with.

Monem Salam:
Okay, I'm lost.

Jeremy Loween:
Fair.

Monem Salam:
So I'm sure other people get lost as well. So what is IRMAA again?

Jeremy Loween:
So IRMAA is your income related monthly adjustments. So for 2024 we're looking at essentially if you made under about $200,000…don't quote me. This is rough numbers. But you filed a joint tax return and you made under $200,000 your individual Part B premium is right around 175 per month. If you were above $200,000 filing jointly, your Part B premium gets increased because of that.

Monem Salam:
So that income is pension, IRA money you take out, everything along those lines or has to be earned income?

Jeremy Loween:
So it's any income that falls on that federal tax return. And what they're looking at is that modified adjusted gross income on your tax return. The federal government is always looking back two years at your tax return. So for 2024, they're going to look back at 2022, see what you filed, and that's the number that they use to set your premium.

Scott St. Clair:
So you mentioned that upper limit of about $200,000. You also mentioned there's a lower limit. Do you have a ballpark on that value where you don't pay that premium for Part B?

Jeremy Loween:
So the idea is that you can get assistance for your Part B if you're under a threshold. If you're under that $200,000 limit, you simply pay the standard Part B premium of 175, per month. Now, if your income and assets are low enough, the federal government can kind of come in or the local state authority can come in with funding to help you pay down that premium or potentially cover it for you. That's more of a Medicaid kind of question, where your income and assets are low enough to get that that help from the government. Most people don't get that, for their Part B.

Monem Salam:
Yeah, so our listeners are national. What should they Google, for example, to find somebody like you?

Jeremy Loween:
So the idea here is to Google, like a health insurance broker. So in their backyard, it's always good to find somebody that lives in their neck of the woods, ideally that can meet with them face to face. That's my preferred method of communication with my clients. Medicare is hard enough to explain over a podcast or via email. When you sit in front of me and I can take a look at your statements, we can get the paper out and we can just kind of really lay everything out on the table. That really helps my clients out.

Monem Salam:
And there's nothing wrong with maybe like, for example, me helping my father with all the paperwork or trying to find somebody something that doesn't have to be something that he does by himself or my mother.

Jeremy Loween:
It's always good to get a third party involved that has access to a broad range of products for you. So they're not just selling for one insurance company or one product and find somebody that can contract widely with different insurance companies and really shop the market for you.

Monem Salam:
So we talked about the people who are now just getting into that 65. You talked about a seven month window. Now let's talk about it. Okay I missed the deadline. What do I do now?

Jeremy Loween:
So typically the idea here is that if you are taking Social Security income, so you're actually drawing those benefits, usually, or you're automatically enrolled into Medicare, they'll do A and B at the same time unless you tell them otherwise. There's forms you have to fill out with your local social Security office to defer that Part B if you're staying on that employer plan.

Monem Salam:
Which is important because if you're deferring your Social Security till 67, then you might not ever get an opportunity to back out of work or enroll into…

Jeremy Loween:
It becomes a lot harder, right? So sometimes it automatically happens. Other times you kind of have to tell the system to put you into it. Either way, Social Security has your information. They know when you're turning 65, they'll start triggering letters to get sent to you in communication. Sometimes it gets missed and it can be confusing because you're going to get a lot of information during that time.

Monem Salam:
Okay, great. What if I still missed the deadline?

Jeremy Loween:
So you've missed the deadline to enroll into Medicare?

Monem Salam:
Yes.

Jeremy Loween:
So the idea here is that you would have to reach out to Social Security, meet with them, try to fill out the proper paperwork to get everything fixed because you probably owe premiums. There's probably some backdated information that needs to get fixed.

Monem Salam:
So whether you use it or not, you still owe the premium if you missed that deadline.

Jeremy Loween:
Yeah, if you just automatically get enrolled into Part B and you're on your employer plan, you're paying for both potentially your employer plan and you're paying for Medicare at the same time. They don't want that to happen. They want you to be doing one or the other.

Monem Salam:
Right. Okay, great. Now comes the idea of now I'm in my retirement and now I'm on Medicare. Now, you talked about Part A, you talked Part B, and then now it's private insurance as well. So kind of wrap that all up to us and into a simple explanation.

Jeremy Loween:
So let's just say you enroll into Medicare and you do nothing else. You just get the red, white and blue card that they're going to send you in the mail, and you take that into your doctor's appointments, or you take it into the hospital. If you take it into the hospital, what Medicare would charge you is a little over $1,600. We're talking in 2024 here since we're pretty close to it. So about $1,600 is your portion of the cost for being admitted overnight into the hospital. That covers you for a 60 day benefit period. So no matter whether you stay one day or all the way through the 60 day benefit period, you pay that amount. Let's say you're home for 60 consecutive days and get readmitted into the hospital again. They charge that $1,600+ dollars all over. It's uncapped, right? So the idea here is that it can get pretty costly if you have a catastrophic event, they're going to bill you a lot and they don't stop billing you. A traditional insurance plan would have what's called a maximum out of pocket. And that amount is the most that you would pay for covered services in a plan year. Medicare does not have such a thing. So that's Part A. Part B is an 80/20 plan. So for going into the doctor, let's say, you would pay 20% of the cost of that visit. That's the negotiated rate between Medicare and that provider. You would pay a 20% out-of-pocket cost for everything under that Part B umbrella. Again, the 20% is uncapped. So people staying on the program of Medicare by itself, there's a lot of room for getting charged more than you need to get charged.

Monem Salam:
And you might mention that, Medicare doesn't cover, vision or dental, those type of things. Is there a part C and D and E and F?

Jeremy Loween:
Yeah. The alphabet soup. So they do cover let's say vision. They would cover medical vision. So like let's say a glaucoma screening or going in for a medical condition of the eye that would be covered, but not going in to see an optometrist just to get a pair of eyeglasses and have a routine exam. Same thing with your dental.
They're not going to cover your cleanings, so on and so forth. So the idea would be that you would want to get a Medicare Advantage plan in that case, because they can build in the dental coverage into those plans. These Medicare Advantage or privatized insurance plans that actually take you off of Medicare altogether, which will open up a can of worms.

Scott St. Clair:
So why do they have Medicare in the name if they're taking you off of Medicare?

Jeremy Loween:
There's certainly some discussion around that about changing the name of the plans. These are called part C. It's an agreement between the private insurance company and Medicare. If an enrollee into Medicare chooses to opt out of Medicare and then join the Medicare Advantage plan, these private insurance companies get funding from Medicare. I don't know the numbers on it, but essentially there's money at play. And that funding goes toward these plans, which are called the Medicare Advantage, which is why they're able to add on ancillary benefits like your dental, vision, and hearing, sometimes free gym memberships. And they are entirely privatized, which means that every claim that you have throughout the year, the medical claims, going to see your doctor, going into the hospital, no longer get run through Medicare. They get run through the private insurance company who bears the full risk. The Medigap program is the other side of the spectrum. So that Medigap plan is a Medicare supplement. When you hear both of those terms, they mean the same thing. What that does is it keeps you on Medicare as your primary insurance. So the parts A and B, your red, white and blue card, you use that as your primary insurance. And the supplemental plan, the Medigap, simply comes in to fill in that 20% out of pocket, or that $1,600 hospital. It fills in the gaps of that and helps you pay toward the cost. The reason that would be a benefit is because you can then go anywhere in the country that Medicare is accepted. If you're traveling a lot, or you have plans to go state to state and you don't want network restrictions, you want to just go wherever they take Medicare, that would allow you to do so. The other side of the spectrum limits you to a network of providers that are typically based on the county that you live in, depending on the plan you select. And that does certainly have pros and cons.

Scott St. Clair:
So these supplements are private additions to your Medicare coverage that you still keep with the federal government.

Jeremy Loween:
Correct. So the confusing part is that some companies offer both supplements and Medicare Advantage. So just because it's a Regence Medicare plan does not mean it's an Advantage or a supplement. If it's a Medigap plan, the supplemental plans, these are all lettered plans. If they have a letter in the name, let's say a Plan N or a Plan G are very competitive plans. That would be a Medigap plan. If it's Medicare Advantage, it would probably just have some random name that that company assigns. For example, the Humana Choice PPO is a Medicare advantage plan. They don't have letters in the name. Alright.

(laughs)

Monem Salam:
So this is great. This is great information because literally I thought it was free. Like I thought I would pay into it. Yeah. And when I retired I would be able to take advantage of Medicare and I would be done with it. But you're actually talking about a lot of the different complications that that could possibly come up with or complications or even just complexity of being able to do that. So it's really important for somebody to really know what they're getting into. Yes. But what if you realize that after you've gotten into it, you're in the wrong plan?

Jeremy Loween:
So let's say you enrolled into a plan. You're on Medicare. You've already opted out of your employer coverage. That's kind of a scenario. Yeah. So every single year you have a chance to change your plan. What people commonly referred to as open enrollment. In Medicare, it's actually called the annual enrollment period that happens from October 15th through December 7th. Anybody that's on the program of Medicare can change their plan, whether they have that supplemental Medigap plan or Medicare Advantage. They can go back and forth between the programs during that time. But there's restrictions to that. The idea is that when you're first eligible for Medicare, you're turning 65, these Medigap plans that we just discussed, the lettered plans, are guaranteed issue. So there's no underwriting, there's no restrictions. They simply let you on to the plan. If you miss your initial enrollment window into that and you choose, let's say, a Medicare Advantage plan at first and then later you want to move back to original Medicare with that Medigap, they can ask you health screening questions and deny coverage. So it's really important to look seriously at the Medigap program when you're first eligible, because there could be a chance that you would get denied later.

Monem Salam:
Is there a simple rule of thumb that you can actually help our, audience think about when they're thinking about the different types of plans?

Jeremy Loween:
Yeah. So Part A and B is original Medicare, right? Medigap, you're thinking of the gap. What's the gaps of Medicare? What does Medicare not pay for? That's why they call it Medigap. So think of it that way. They're all lettered plans that are designed by the federal government. When you hear Medicare Advantage Part C, they're the bundled plans. If you kind of think of it that way, they bundle your Part A and B, so they have to cover what Medicare says they have to cover, but then they add on the additional benefits. And so they can wrap that all into one plan, including your drug coverage. And that's another topic we want to dive into.

Monem Salam:
As you're getting older, I mean, you know, assuming that you're probably going to get a lot more hospital visits or doctor visits and that type of thing. Do you find a trend where people usually start off with this particular type of plan and then later on, five years later, move to another different type of plan? Is there like a trend that happens or it's pretty individualized?

Jeremy Loween:
It's pretty individualized. I mean, the idea here is that the older we get, the more that we utilize our health insurance and the more claims that we would have. And thinking from a logical standpoint, you would think, hey, maybe I'd start off with the Medicare Advantage plan because I'm not currently going to the doctor very often. I can get into that plan for potentially a $0 premium. So I'm saving money on the front end and I'm not really utilizing my health insurance. Why would I sign up for a Medigap plan and pay an extra premium? That seems pretty logical. And then down the road, when health starts to take a turn, just sign up for a Medigap plan. You would hope that would be the way that this would work, but the idea here is that when a lot of people are signing up for a Medigap plan due to health concerns and issues, there's going to be a lot of claims that the insurance company has to process. That's a big risk to them to take on people that are processing a lot of claims and essentially pulling from the funds in the program, which is why they really want you to get onto that Medigap program earlier rather than later. So you're in it and you're not as much of a risk to the insurance company when you're younger.

Monem Salam:
Could they deny you coverage?

Jeremy Loween:
They can deny coverage after your initial enrollment window. So let's say you've missed the enrollment to Medicare. You sign up for a different plan then five years down the road you want to sign up for that Medigap. You're going to have to go through and answer a questionnaire of your prior health history. Any current issues that you have, and if you answer any of the questions in a way that they don't see fit, they typically just deny the plan.

Monem Salam:
So what do you do then?

Jeremy Loween:
In that case, you're still eligible for Medicare Advantage, and those plans may never have underwriting. So their guaranteed issue.

Monem Salam:
No matter how old you are, or...

Jeremy Loween:
Correct.

Monem Salam:
That's your fallback option.

Jeremy Loween:
That's your fallback. And that's really the way that we're seeing the industry kind of trend. Over 50% of Medicare beneficiaries are going onto Medicare Advantage plans. And the primary reason for this is due to the marketing. There's a lot of marketing dollars, again, given from the federal government to these insurance companies to market the plans with the commercials that you see, you know, every October through the end of the year, you're going to get a bunch of letters in the mail about these plans. All the money is kind of being funneled that direction and away from the Medigap program. I think in the insurance company's mind, it's a better financial choice for them.

Scott St. Clair:
So just ask the nitty gritty question. You talked about these enrollment periods when you can sign up before 65. Let's say I'm about to turn 65. How do I actually sign up? Where do I go? Can I do it online?

Jeremy Loween:
Yes. So the enrollment into Medicare is actually facilitated by Social Security, which is kind of ironic. You would think you would call Medicare to do that. The reason why they would put you through Social Security is because typically when you're drawing your Social Security benefit, they're going to deduct that Part B premium that everybody pays on Medicare through your Social Security check. So once you start taking in that Social Security income, that gets deducted. So the enrollment into the program is through that entity either in person or online at Social Security. So you would log into your SSA portal and you could actually just do the enrollment right then and there. And you can note in the questionnaire whether or not you want to activate your Part B.

Scott St. Clair:
All right. So there's options online and in person.

Jeremy Loween:
You can do it over the phone if you want to wait online for an hour. But that's up to you.  

Monem Salam:
If you're on Social Security, and you enroll for the program, Social Security will automatically deducted from your from your pay that you're getting every month?

Jeremy Loween:
Yeah. So if you are taking Social Security, then they automatically deduct that Part B premium from your paycheck. And so you'll see that as a deduction. If you're not taking Social Security they bill it in quarterly increments. So every three months you would get a bill for three months of premium.

Monem Salam:
And can you use a health savings accounts or flexible saving, those different type of tax beneficial accounts to pay for these things?

Jeremy Loween:
Yeah, there's certainly some nuances to that. So I'm not going to speak in too much detail. As far as I understand you can help pay your Part B premium. So it's a federal premium. You can use your HSA funds for that. And typically like your co-pays or your deductibles on your health insurance, those funds can be used. But I'm glad you brought that up. As the rule currently stands, and as I understand it, you have to stop funding your HSA six months prior to turning 65. That's how I read the rule, and a lot of people aren't aware of that. They just continue to have it automatically deducted from their check. and they could potentially get a bill from the IRS or like a penalty for doing so.

Monem Salam:
That's an important point because you can set up an HSA or a health savings account if you have a high deductible policy. Now, what you're saying is it's not only that you have a high deductible policy, but if you're turning 65, then you should be off of the HSA contributions six months prior to you turning 65.
 
 

Jeremy Loween:
Correct. You can continue to keep the HSA that belongs to you. That money is yours to spend. You just can't fund it when you're eligible for Medicare.

Monem Salam:
One other thing I wanted to ask you was regarding spouses. Let's say I'm turning 65 but my spouse is not.
Do I have to wait for her to turn 65 before she gets eligible for the same program?

Jeremy Loween:
Correct. And so the idea here is that it's an individual, kind of ticket into the program.

Monem Salam:
So there's no family plan.

Jeremy Loween:
Yeah, exactly. Let's say you enrolled, but she's not quite eligible for Medicare. She couldn't just hop on to your plan because you're on Medicare. She would either have to stay on your employer plan or she would have to get her own plan through the local state exchange.

Monem Salam:
That's a factor, maybe, in figuring out whether or not you want to get off of your employer plan or not.

Jeremy Loween:
Yes, it absolutely is. And I do have clients that tell me that and they say, hey, we're getting a good deal by keeping my family on my employer plan. I'm choosing not to opt into Part B for that reason, so I can keep them on my coverage until they become eligible for Medicare.

Monem Salam:
And then how about, if a spouse, you know, because for whatever reason, taking care of family or those type of things, never worked, got it, never paid into it. What happens in that perspective?

Jeremy Loween:
As long as one of the spouses has worked for ten years and paid into the system, then their legal spouse also gets access to Medicare. So it's just based on the household paying into it.

Monem Salam:
Prescription drugs and those things, there's a specific plan for that one as well. I think it's called part D. Let's talk about that because that's, for a lot of people, it's not the doctor visits they're making, often it's the monthly medication or the quarterly medication.

Jeremy Loween:
Yes. Yeah. That can be a little bit of a shocker for folks. So the Part D program is actually not built into Medicare. So again just like that Part C Medicare Advantage it's not a part of Medicare but it's kind of regulated by the program. So drug coverage is required. Your prescription drug coverage. You have to enroll into a plan. Otherwise they can penalize you. So the idea is is some people are coming on to Medicare and maybe you're not taking any prescriptions. You might be pretty young and healthy. They still want you to enroll into a plan. If you later choose to enroll into a plan and opt out when you're first eligible, they can actually penalize you for every month you go without credible coverage. So the goal here would be to either get a standalone prescription drug plan to go alongside Medicare, and potentially your Medigap plan. Those are kind of the three plans we'd be looking at in that scenario. Or the other spectrum would be the Medicare Advantage Part C. Most of those plans wrap in credible drug coverage into the plan, which is why they call it the bundled plan.

Monem Salam:
Yet again, I'm confused. So let's kind of, break this down a little bit for sure. So when I enroll, if I only enroll at Part A or B, then drug coverage is not there.

Jeremy Loween:
Yes.

Monem Salam:
Then I need to either do a part D or I need to do Medigap.

Jeremy Loween:
Part D would be alongside your Medigap. So when you hear the term Medigap, think of that as simply your medical coverage because it only covers parts A and B, which are medical. Now part D is drug. Still required by Medicare to do that, so you'd have to get a standalone plan in that scenario where you have the Medigap plan on original Medicare. The other side of the spectrum was the Medicare Advantage. That's the one that takes you off of Medicare, and it's privatized through the insurance company. Those plans, for the most part, offer the drug coverage built into it. So essentially that does check that box of getting credible drug coverage. And many times you're not paying any additional premium in that scenario. The drug coverage is just built into the plan.

Monem Salam:
Okay. And but if you are an and B and you opt for part D, there is a premium.

Jeremy Loween:
The standard part D premium, if you look at the average, you take the highest premium and the lowest premium and kind of meet in the middle, we're looking at about $55 for 2024 is the average per month, your monthly premium.

Scott St. Clair:
And that's on top of the premium from Part B?

Jeremy Loween:
Correct. So you pay a Part B premium, potentially paying a Medigap premium, to fill in the gaps of Medicare plus a Part D plan. And another factor here, right, just to add in a little extra layer…

Monem Salam:
Add in more confusion, you mean? (laughs)

Jeremy Loween:
Yeah, exactly. You guys want be more confused? Since A and B do not cover your dental and vision and you're used to getting that covered, if you went the route of the Medigap on original Medicare, you'd have to get a standalone dental and potentially a standalone vision plan. That's certainly a factor.

Monem Salam:
Health care is so much more important as you're getting older. The idea being so, you know, really start doing your homework, maybe even a year or two in advance of…

Jeremy Loween:
Maybe even longer.

Monem Salam:
Maybe even longer. Hopefully this podcast is helping you do that. and making sense out of it. You are going to get reminded. Hey, you coming up on 65? It's three months beforehand. You better start thinking about the plans. Contact somebody or doing yourself or however it is. So you are going to be getting warnings from doing that. Does your employer have a responsibility also to send you notifications on that?

Jeremy Loween:
There should be communication coming from your HR department. They are trained in Medicare at a base level to know what the rules are and whether or not somebody can stay on the group plan or come off of it when they're eligible for Medicare. They should have a baseline understanding of that. However, people that work in HR have a million things to do, right? So they can't be experts in Medicare. So I do work with different human resources departments here locally. I provide the Medicare 101 seminars to them, and I go in and educate the HR teams on the process of Medicare, because it's important for not only the individual to be educated, but their employer as well. So everybody's on the same page.

Monem Salam:
Just out of curiosity more than anything else, but is this plan cover for all employees, whether you're state, government or private, or is it different for different types of employees that you can be working for different…

Jeremy Loween:
You're saying, is Medicare essentially the same for everybody?

Monem Salam:
If you work as a federal employee, for example, they have a better program and they're exempt from the Medicare, or those type of things. Is that true or?

Jeremy Loween:
Everybody goes on to Parts A and B of Medicare doesn't matter who you are. That's the federal program. Now, the Medigap plans or potentially the Medicare Advantage plans can look different if, let's say you are a federal employee or let's say you're a schoolteacher, you're a public employee, you have access to unique products that are under that Medigap and Medicare Advantage umbrella that are only offered to you because of those union benefits. So I always advise folks that typically have access to that to enroll in those plans and to choose one of those options, because most of the time, if they ever opted out of one of those plans, the union or that program would not let them enroll in the future. So it's really important to choose a plan on that program as long as it fits your needs.

Scott St. Clair:
So you mentioned that the Part B premium can change depending on your income levels. Is the same for the part D premium?

Jeremy Loween:
Yeah. So Part D you would pay your standard Part D premium to the insurance company if you were under that threshold of the 200 somewhat thousand dollars filing jointly. If you fell above that amount, they can add that IRMAA, the income related monthly adjustment onto your part D plan as well. So that impacts both Part B and Part D.

Scott St. Clair:
Does that amount change on how much you are above that 200,000.

Jeremy Loween:
Correct. There's different tiers, right? So they call it the income brackets. And there's about 6 or 7 different brackets based on your income. The highest threshold is $750,000 and above if you're filing a joint return. And if you made above that you pay the very highest IRMAA, as they call it.

Monem Salam:
Yeah Scott, you really have to worry about that highest income category I think, so…

Scott St. Clair:
These podcast positions do pay quite a bit. (laughs)

Jeremy Loween:
At least one mill, right?

Scott St. Clair:
At least.

MS
So, how many parts are there?

Jeremy Loween:
How many parts to Medicare? The confusing part is there's only two parts to Medicare. There's two parts that are actually Medicare. That's A and B. What they call Part C is not a part of Medicare. That's the privatized Medicare Advantage plans. They simply have an agreement with Medicare, which is why they call it a Part. And then part D is the drug program, which is regulated by Medicare but not part of Medicare.

Scott St. Clair:
So Part D is not actually a federal program. It's just regulated by...

Jeremy Loween:
It's regulated by the government. And they require you to enroll, otherwise they can penalize you down the road.

MS
And is there an E F G H I J K L M N O P?

Jeremy Loween:
And then when you hear the lettered plans, if it has a plan preceding a letter, then it's a Medigap plan. So Plan N, Plan G, so on and so forth. Those are the federally designed Medigap plans, right? So when you hear the term plan with a letter, Medigap. If it's a part, it's usually regulated by Medicare.

Scott St. Clair:
Does the letter on those Medigap plans matter?

Jeremy Loween:
Yeah, it's super important. So there's three plans that I look at most with my clients. I'll start with the one that's easiest to understand. Plan G, your Medigap plan, is currently the most comprehensive if you're a Medicare beneficiary who has come onto the program after January 1st of 2020. So we're looking back about three years here. So that Plan G comes with the standard deductible of Medicare Part B of $240. So Medicare makes you pay that $240 out of your own pocket before they cover anything. On that Plan G, once you've paid $240, you're covered at 100% for all of Medicare approved services, by far the most comprehensive plan, and it's the easiest to budget, right? So if you want predictability in your Medicare and you want to know exactly what your costs are going to look like, that's the plan that you would select. Plan N is kind of a tier down from plan G. Plan N has that same deductible of $240, but it has copays for two different situations. You go to see a physician, you pay a $20 flat copay. And if you go into the E.R., you pay a $50 flat copay. Otherwise, the two plans are the same other than the premium that they charge, and the insurance companies all set the premium so they can choose what they want to charge on a monthly basis. So it's my job as a broker, your job as a beneficiary, to find one of those plans that has a lower end of the premium, right, because you're getting the same coverage from one company to the next. If you choose the same letter, it just really is the premium that matters.

MS
So, you know Scott, I think what's going to happen in this episode, I have a feeling I'm going to predict the future here, is that we're going to get people listening to this show, most often than any other one that we've had, probably because there's so much detail that's going into this, and they're going to take out a pen and paper, and they're going to write it all down.

Scott St. Clair:
Write down, every letter of the alphabet. (laughs)

MS
Or they're going to, exactly, or they're going to just keep listening to it over and over again. So I do predict that. But really, Jeremy, thank you for trying to break this down to us as much as possible. So are there doctors who don't accept Medicare or is it pretty much standard? Is it just like any other insurance where some some do and some don't?

Jeremy Loween:
Well, there certainly are.

MS
And what's the trend? Is it more people on it or people are getting off of it?

Jeremy Loween:
So the general rule historically has been that over 90% of providers nationwide accept Medicare. The issue is that on an ongoing basis, we're seeing that the reimbursement rates from Medicare to these providers is getting lower and lower, and so they're not getting paid as much, when a Medicare beneficiary comes in. Which is why they would say, hey, we'd love for you to have a Medicare Advantage plan, because the private insurance company will reimburse that provider more than what Medicare reimburses. That's kind of a trend that we're seeing in the industry, and why more and more providers are choosing to opt out of Medicare.

MS
Okay, so it's possible that you've been seeing your doctor for 30 years, and then all of a sudden when you get on Medicare, they don't accept it.

Jeremy Loween:
Yes. And in that case, if they take Medicare Advantage and they would only take so many plans, you'd have to ask them, which companies do you work with on the Medicare Advantage?

MS
Kind of wrapping it all up, you mentioned at the very beginning that, you know, you offer your services for helping people figure out exactly what they're looking for. What are some key markers that I should be looking for and say, this person knows exactly what they're talking about, this person doesn't. And related to that is how do you get paid?

Jeremy Loween:
Sure. Well, so we'll start with how I get paid. So the insurance company pays me. It's never the person I'm working with across the table. Their premium is the same no matter whether they enroll through me or directly with the insurance company. That doesn't change. I simply get an ongoing commission, whether that be annual or monthly, from the insurance companies when somebody enrolls through me. And the insurance companies see that to be a benefit to everybody involved because the insurance company gets less calls. I'm usually the ongoing account manager in that case where they call me when they have questions or if they have claims issues, instead of just the insurance company simply fielding all the calls. And roughly about 80% of all enrollments, at least here locally in Bellingham, go through brokers. Only 20% go through directly to the insurance company. So that's another reason why they want to continue working with brokers.

Monem Salam:
Why would I want to go directly?

Jeremy Loween:
If you're really smart and you love the research and you feel like you know more than the broker that you would be going to meet with, that would be a reason to do it. The other possibility here is that in every single community there's called, what's called SHIP. here in Bellingham, they actually call it SHIBA. So they kind of change back and forth. They're local volunteers that just simply meet with people and advise on Medicare. They are trained by the government to talk on Medicare plans and they're not paid. Right? So let's say you don't know who to go to, and you can't find a broker in your community. Simply look up your local SHIP organization. That's SHIP, and you can find a volunteer that can at least point you in the right direction.

Monem Salam:
What should I be looking for in a broker?

Jeremy Loween:
A good broker should be giving you a holistic Medicare 101 before they even recommend a product to you. If you're going in and they're only talking about Medicare Advantage plans, you can almost guarantee they're in it for the money because they get paid more for those Medicare Advantage enrollments. If your broker is not talking about the option of going on to the Medigap supplement side of things, it's because they don't get paid as much and that person maybe does not have the best intentions. So make sure you're meeting with somebody that has a heart of an educator, and that will walk you through the entire program and let you choose.

Monem Salam:
And how often do you see clients calling you back for questions after they've enrolled and into a plan.

Jeremy Loween:
Very often, right? Typically less so on the Medigap plans, because those plans are standardized and they're pretty easy to understand. Now, the Medicare Advantage, it's easy to understand that they can charge you a $0 premium, but it becomes a little bit more foggy to know what services cost what. And so I typically get more phone calls from my Medicare Advantage clients because they're either mad that their doctor's not taking it or came out of the plan's network, or their prescription drugs maybe weren't covered how they thought they would be. Their doctor can come in and out of that network at any time during the year on the Medicare Advantage side. So they're certainly, in my opinion, more volatile than the Medigap product.

Monem Salam:
Well, thank you, Jeremy, for taking the time to be able to break down Medicare. I know it's a very complicated subject for anybody but I think, hopefully we've to put a little bit of dent in those there that are coming of age, and need to be able to, you know, enroll a plan or, our younger listeners who maybe their parents are the ones who are looking to get into plan. They have no idea how to do it. I think after listening to this and definitely, you know, having a broker to help you and being able to do that is the right way to go. And hopefully you'll be able to find one in your area as good as we do it here in Bellingham.

Jeremy Loween:
Yeah. And if the people want to, you know, point in the right direction, they're always welcome to reach out to me, even if I can't sell them a plan or look at their plan options, I'll get them pointed in the right direction.

Monem Salam:
Great. Thank you so much.

Jeremy Loween:
You bet. Thanks.

Monem Salam:
If you're a long time listener, because we've been doing this thing now for a good amount of years, or this is your first episode that you've listened to, thank you for listening to Halal Money Matters. If you like what you hear, write us on the app stores and also leave us a review. It helps other people find us a lot easier.

DISCLOSURES (read by Scott St. Clair):
This podcast is prepared based on information Saturna Capital deems reliable; however, Saturna Capital does not warrant the accuracy or completeness of the information. We do not provide tax, accounting, or legal advice to our clients, and all investors are advised to consult with their tax, accounting, or legal advisers regarding any potential investment. Investors should not assume that investments in the securities and/or sectors described were or will be profitable. Investors should consult with a financial adviser prior to making an investment decision. The views and information discussed in this commentary are at a specific point in time, are subject to change, and may not reflect the views of the firm as a whole. All material presented in this publication, unless specifically indicated otherwise, is under copyright to Saturna. No part of this publication may be altered in any way, copied, or distributed without the prior express written permission of Saturna Capital.