Demystifying Medicare; A WTR Discussion With Danielle Roberts
A lot of people don’t know what Medicare really is. You might know that it’s a form of health insurance provided by the federal government, but do you know the specifics? If you start doing your research early, it could benefit you in terms of you knowing what your options are and how much you really should be saving in retirement that would go toward health care. Today, WTR welcomes Danielle Roberts, Medicare expert and co-founder of Boomer Benefits. In this episode, we will be discussing the difference between Medicare, Medicaid, and long-term care, and why starting to think about this process sooner, rather than at the last moment, could be a significant weight off of your shoulders when it comes time to applying for Medicare.
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[00:27] Kevin: Today I'm joined by Danielle Roberts, and we will be talking about demystifying Medicare. Would you mind sharing with us a little bit about where you came from and what inspired you to do what you do today?
[01:20] Danielle: I was a person that went straight into a business job out of college and worked in the staffing field for about 10 years, and then I was looking for the next thing to do
[01:35] I stumbled across an insurance interview and I went and learned all about health insurance and really enjoyed that concept for a business model because you get to help people and can earn a nice living from
[02:07] I originally worked with people on doing group health insurance and helping small business owners set up for coverage
[02:49] Eventually I came to the idea that people must really need information on Medicare because people keep asking about it[02:58] It's a huge national beast of a health insurance program so no wonder people are confused
[03:20] I went into learning about Medicare and went out and got a couple of designations and studied it for a few months until I really understood what it was and then we started offering those services
[03:45] We now solely help people who are trying to transition into Medicare and make that big life change from employer coverage over to government coverage
[04:30] Over the years, my brother and I have sold those policies ourselves in the beginning and then we ended up needing help and now we have 57 employees who work full time explaining Medicare to people all around the nation (making it into something you can understand)
[05:09] Kevin: Let's talk about what Medicare is and a little bit about what it isn't
[05:14] Danielle: Medicare is the federal government national health insurance program for people age 65 or older. When you turn 65, you are eligible to sign up for health insurances provided by the federal government instead of, or along with, your employer health coverage[05:43] Because it's an entitlement program, it's something most Americans pay into
[06:01] People tend to think Medicare is free (we're paying for it in our taxes during our working years)[06:23] When you enroll, there are some portions that you pay for and then there's also cost sharing as you go along
[06:35] Medicare is different from Medicaid because Medicaid is for people who are low income and you can be any age to get Medicaid (you can have both together), but Medicare is for people ages 65 and older (some people with a disability can qualify for Medicare when they're younger than 65)
[07:24] Kevin: I heard you mention that you get questions from people who are 30 and ask why they should care about Medicare. So how does that apply to people?
[07:41] Danielle: I love talking about it with younger people because it's so important for you to know about because the thing that I see, day after day, is people give us a call a couple days before they're eligible for Medicare and they've never done any research[07:59] A lot of times, they have not set aside enough money in retirement to account for what they're going to need for health care. So it's really important for younger generations to know that this is a program that costs a lot of money to run and so you really need to know it won't be free (premiums that you pay)[08:25] The average American spends about $145 a month on their part b premiums
[09:38] We have a number of great ways to save for our retirement and we need to be thinking about those and setting some money aside that's specifically to pay for our health care when we get to retirement age
[10:00] In our industry there's long-term care insurance, which is not something that's covered by Medicare (it's only covering your health needs not your needs for assisted living)
[10:55] Kevin: Can you clarify exactly what long-term care is?
[11:12] Danielle: So Medicare is going to take care of your in-patient and out-patient needs (hospital stays, acute care, surgeries, preventive care, doctor visits, lab work... anything that's medically necessary)[11:30] However, when you reach a certain stage where you can't live alone due to a health condition, the treatment of the health condition is necessary, but the living is not the government's program[11:56] If you exhaust all of your assets and have very little income left over, then you might be able to get Medicaid to pay for a state bed somewhere in your state (might not be close to home)
[13:57] Kevin: So let's talk a little bit about where you see Medicare going in the future. I know you mentioned there's a bill called Medicare 50, correct?
[14:07] Danielle: Yeah, so we all probably have heard about Medicare For All, but the reality is that the current Medicare system is nothing like Medicare For All[14:25] The Medicare For All bill would not be expanding this current Medicare as it is, it would just be creating a single payer system like Canada has
[15:09] One of the bills that has been proposed is Medicare 50 and what this bill would do would be extend the entry age of Medicare voluntarily to anyone age 50 and older[15:34] The reason why I think this is one to watch or that might have some legs is that it would be an extension of the current program, which is already working[16:53] People are often more comfortable with a little change rather than a lot of change
[18:47] Kevin: What other types of things do you see when people come into your office that they are unaware of when it comes time to Medicare?
[18:54] Danielle: The one thing they need to know is that it's not free. The other thing is that it doesn't cover 100% of costs[19:04] Medicare only covers 80% of out-patient needs and the difference between Medicare and what you and I have now is for plans that are under age 65, we have a deductible and we also have a stop loss[20:11] You actually need to buy some supplemental coverage which are the products that we sell, and to help you with paying that 20% and also for paying deductibles, there are different plans (consumer-driven options that are less expensive)
[20:34] Another thing about Medicare is that it doesn't come with drug coverage
[21:19] The best thing that I can say is to start your research as early as possible
[21:40] Kevin: Before we close for today, I'm going to ask you for our WTR value bomb. In your experience, what should our WTR listeners look to avoid and what can they do about it?
[21:55]: Danielle: The main thing you want to avoid is procrastinating this until the last minute. Don't go into it unprepared, do your research early, understand what it is you're facing, and then work with your financial planner to come up with a plan for that
[22:30] What you can do about it is a health savings accounts. You can get a high deductible health plan at work (it lowers your premium) and you can open this account and put money in it (save it for a rainy day)[22:51] The money that goes in is tax free, it accumulates tax free, and when you pull it out for medical, you don't pay any taxes on it either