Stephanie Frisch is the owner of Insurance 101 and is an independent insurance broker dedicated to helping others make “educated decisions” about their insurance choices when it comes to Medicare, Long-Term Care Planning, The Health Insurance Marketplace-Covered California and Life Insurance. For answers to your questions, or an in-home, no-fee consultation, call (949) 351-2443.
In the Medicare world there is a term used called “Aging-In.”
It means that somebody is turning 65 and transitioning their current health coverage to Medicare because that is the age when most people make that transition. That process of transitioning to Medicare can be routine or it can be very complex, or a combination of the two. Making a mistake during that initial enrollment period can cause financial, medical and stressful issues that no one wants to experience or deal with later.
When dealing with your Medicare options, whether you’re new to Medicare or you have been on it for years, broker experience is everything. Everybody's situation is unique to them and the more individualized attention you get from the Medicare broker that you use, the better the outcome for you so when your time comes to “Age-In” you won’t need to worry about the consequences of making mistakes or uneducated decisions.
In the following interview, Stephanie Frisch (owner of the San Juan Capistrano-based Insurance 101 Services) addresses some frequently asked questions and recent trends in the industry.
Q: Have you been helping people with their Medicare options for long?
A: I’ve been an insurance broker now for 14 years and specializing in Medicare options for 9 of those.
It’s interesting for me to think about when I first started helping people with Medicare, that process personally being a part of my life seemed so far in the future. Now, my husband Mitch is “Aging-In” to Medicare in just 6 months! We been discussing his options and he feels fortunate to have my experience and knowledge on his side as he makes his transition.
My services are free, I get compensated by the insurance companies that I choose to contract with. I do make house calls to those unable to come to me, once again a free service.
Q: I know you specialize in helping those new to Medicare, but there are a lot of readers already on Medicare. What advice can you give them as the Medicare Annual Enrollment period begins this month?
A: First off, keep an eye out for your “Annual Notice of Change.” You won’t receive this from your Medicare Supplement provider, because those benefits don’t change annually, but your Medicare Part D (RX) plans do, as well as Medicare Advantage plans if you’re enrolled in one of those instead of Medicare as your primary insurance. They get sent out the end of September to coincide with the start of the Annual Enrollment period (AEP) which begins October 1st. Any changes to your plan premium or benefits for the new year will be shown there, comparing your current year benefit with the upcoming year. If you decide to make any changes with these types of plans, you have between October 15th and December 7th to do so, with those changes taking effect on January 1st.
Q: Isn’t AEP (Annual Enrollment Period) the same as OEP (Open Enrollment Period)? There seems to be some confusion over the two and whether they’re one in the same?
A: Completely understandable because up until last year, pretty much everyone, myself included, used both terms to describe the period of time when Medicare beneficiaries could make changes to their coverage for the new year. But last year the government (who provides Medicare) decided to bring back an additional transition period that had been in place before, but it must have been a long time ago since I don’t remember it. So now, until further notice, only those Medicare beneficiaries enrolled in a Medicare Advantage plan can make a change to their current coverage during the Open Enrollment period which is January 1st through March 31st.
Q: Why do you think Medicare brought back the Open Enrollment period? It seems the whole process of the Annual Enrollment period was confusing enough.
A: Agreed! But I do always come across people who, even with all the TV ads and mailers, somehow missed their opportunity for change during AEP. So, I would imagine the government was getting some feedback on that.
Many people that meet with me had no idea that the options for Medicare Health plans were so rich in benefits and so low in premiums, or without a premium altogether!
Q: You write an article for this publication every month to help Medicare beneficiaries understand their options and the processes involved with transitioning to Medicare and making changes to their current Medicare coverage. Because of that do a lot of people request an appointment with you throughout the year?
A: Absolutely, many times people come in not only with a recent article that I wrote, but I’ve had clients come in with several articles, telling me they’ve been reading them in South County Magazine for years and now they’re turning 65 and looking to me to help them with the decisions they need to make. Over the years the number of people I help “Age-In” or transition from Group Health insurance if older than 65 to Medicare has grown considerably. I help about 200 people a year with this process. That exposure to so many varying situations is what gives me the experience to continue to grow my knowledge, especially with the very complex transition situations.
Q: So, what do you feel most people are confused about when it comes to transitioning to Medicare?
A: Surprisingly, for many it’s the first step of just activating their basic Medicare benefits with the government. Then it would be understanding what “IRMAA” is and how that can make an unexpected financial impact on them. Lastly, I would say how to go about transitioning to Medicare if they stayed on their large group health insurance plan past age 65.
Q: Why would it be hard to activate Medicare, doesn’t that automatically happen at age 65?
A: No, things have change since the increase in the age to be fully vested in social security benefits has increased. Now, the only people that just get to wait for the Medicare card in the mail about 3 months before their 65th birthday are those taking their Social Security benefits early. All the others turning 65 need to take steps to activate Medicare either online, over the phone or in person at their local Social Security office.
Q: What is IRMAA and what does the acronym stand for?
A: IRMAA stands for “Income Related Monthly Adjustment Amount”. Especially here in Orange County we have a lot of higher wealth individuals. The government sets a benchmark of the AGI (Adjusted Gross Income) that a Medicare beneficiary can have to pay the standard Medicare Part B monthly premium. For an individual that’s currently $85K annually and $170K if married. There are 5 levels above the base premium; currently $135.50 a month. This is what “IRMAA” is referring to and it is based off of the AGI filed on their tax return 2 years earlier. If someone has IRMAA added to their Part B premium, they will also be assessed a monthly Part D IRMAA as well.
Q: So, I was under the impression that everyone has to go onto Medicare at age 65, why don’t some people have to?
A: There is so much confusion on this. I’m told by many of my clients that dinner with friends turns into minor debates about whose right on this one. If someone has coverage by a group health insurance plan that is covering more than 20 or more employees, whether it’s their own employer or a spouse’s, they can choose to stay on that plan for as long as that person is employed by that company. If coverage ends, they need to transition to Medicare (Not COBRA, penalties will occur) quickly. Making a transition to Medicare from group coverage can also just occur whenever someone is ready to make the move. Many people that meet with me had no idea that the options for Medicare Health plans were so rich in benefits and so low in premiums, or without a premium altogether! Consequently, the benefits are much better than their group health insurance (nothing is lower than a $0 co-pay) and most times less for monthly premium as well.
On the other hand, for those that make a high annual income, we have to look at the amount of IRMAA that would be incurred monthly vs. the monthly premium for their group coverage. Because of this factor, many times in this situation it makes sense to wait until their income reduces upon retirement to go onto Medicare.
Q: So what should our readers know if they’d like to get in touch with you to set a time to meet with you or have a phone consultation?
I don’t know what can be done to make the transition to Medicare an easier process for people. Those that are turning 65 are inundated with mail promising to give them the best option. There are websites, webinars and community meetings.
But what all of these options don’t take into account is that for the most part, each new to Medicare beneficiary has a situation unique to them. So, this means that while they may get some of the information they need to feel like they’re starting to understand Medicare, their own personal needs and questions aren’t being addressed.
That is why working with a Medicare broker that is experienced is SO IMPORTANT. And remember, working with a Medicare broker cost you nothing, they are compensated by the insurance companies they contract with. There is a lot of fact finding that an experienced Medicare broker knows how to do. Important questions that they should be asking you before beginning to educate you about what options would best serve you as you begin planning your entry into the Medicare healthcare system.
First, remember that you must have your government provided Medicare active before you can enroll in other options provided by private insurance carriers. When you activate Medicare, whether you do it online, over the phone or in person; this is NOT the time that you need to be prepared to select the private insurance options. You are just getting the ball rolling so that you can get your Medicare ID number. Without that number, you can’t apply for a Medicare supplement, Medicare drug or Medicare Advantage plan. The time to start down this path to activating your Medicare begins 3 months prior to the month of your birthday. If you were born on the first of the month, then you get to start the month before the month of your birthday.
You don’t need to have this first step out of the way when you meet with a Medicare broker. Many people that contact me for help do so several months ahead of time because they’re curious about what their “Medicare Future” holds for them and how much it will cost and what the deductibles, co-pays and out of pocket maximums are. If you’re planning your path to Medicare, these are some of the questions you should be ready to answer in your initial appointment with an experienced Medicare broker.
How do you currently get your health insurance? If you still have access to larger group health insurance, how much does it cost you and what are your co-pays, deductibles and out of pocket maximum?
What was your adjusted gross income 2 years ago and last year?
Do you split your time between 2 residences or do you travel a lot?
What medications do you take and what doctors are important to you to continue to see? Where do these doctors have their offices?
Your initial consultation will generally last an hour. An hour in a seminar would seem like forever and you would probably have a tough time staying awake. An hour devoted solely to you and your needs seems a lot different. You should leave feeling like the questions that were in the back of your head were answered. Yes, you may have some “homework” to do, but that will just make sure you get put in the right place for your needs and you and your Medicare broker will together begin to “Plan your Path to Medicare”.
With Medicare Annual enrollment now just a few days behind the writing of this article, I can tell you that, “What about Dental Insurance” became the number one question trending in my appointments, and there were a lot of appointments.
So, here is a check list of 5 things to consider when deciding whether or not you should get a dental plan.
1. It’s a commitment. Dental plans need to be in force for a full year to get coverage on major benefits such as crowns and implants (implants are covered by very few plans)
2. Have a dentist you like? Then when considering what insurance carrier to go with, call them and ask them who they are in network with and which carrier pays the best and is the easiest for them to work with.
3. Purchasing a PPO dental plan? You still want to make sure your dentist is “in-network” with the insurance carrier that you choose. Why? Because that way you get the “in-network” negotiated rate AND the dental insurance paying their portion of your bill.
4. PPO dental plans will pay UP TO a certain amount every year. And they don’t pay 100 % either. With the exception of cleanings generally being 100% covered, you will pay 20% of the cost of fillings and 50% of the cost of root canals, crowns and implants. The dental insurance will pay the remaining percentage but only up to
5. $1,000 or $1,500 a calendar year (depending on what policy you purchase).
Are HMO dental plans good? For so many reasons no, so don’t even consider it. Save $30 a month instead for major dental work.
The 21st Century Cures Act eliminates the existing Medicare Advantage disenrollment period that currently takes place from January 1st through February 14th of every year and, effective for 2019, replaces it with a new Medicare Advantage open enrollment period (OEP) that will take place from January 1st through March 31st annually.
The new Open Enrollment Period allows individuals enrolled in an Medicare Advantage plan, including newly Medicare Advantage plan-eligible individuals, to make a one-time election to go to another Medicare Advantage plan or Original Medicare. Individuals using the Open Enrollment Period to make a change back to Original Medicare may also add a Part D (drug) plan at that time.
What isn’t guaranteed for those that choose to go back to Original Medicare at this new “OEP” window is being accepted by a Medicare supplement plan insurance company. Those plans would still require medical underwriting. (Unless someone was within 6 months of activating their Part B portion of Medicare) While the underwriting can be considerably lenient, it’s still a possibility of being denied for those with serious and current medical conditions.
This is big news! The Medicare Open Enrollment is back. Not to be confused with the Medicare Annual Enrollment Period (AEP), Open Enrollment Period (OEP) was shelved a decade ago. Over the last 20 years, it’s started, stopped, started, then stopped again.
Now, not only will Medicare beneficiaries have the AEP to make Medicare plan choices, but they will also have an additional timeframe from January through March to make changes to their coverage.
On April 2, 2018, the Centers for Medicare & Medicaid Services (CMS) issued a final ruling that will result in some updates for Medicare Advantage (also known as MAPD) plans, as well as to the Medicare Part D prescription drug (also known as PDP) program.
Today, Medicare’s Annual Election Period, or AEP, goes from October 15th to December 7th each year. During this timeframe, those who are enrolled in Medicare are allowed to make changes to their plans – which include switching from Medicare Advantage to Original Medicare or making a move from one Medicare Advantage plan to another.
The new rules include the re-introduction of a “new” open enrollment period (or OEP). This means in 2019, the enrollment period will run from January 1st to March 31st, and during this timeframe, Medicare Advantage enrollees will be allowed to dis-enroll from their current plan and move to a different Medicare Advantage plan. Or, they can move back over to Original Medicare (Medicare Part A and B) essentially dropping their MAPD plan by enrolling in a Medicare Part D prescription drug plan(PDP).
So what is the difference between AEP and OEP? The OEP is not an extension of the AEP, which will still occur between October 15th and December 7th each year. Additionally, the OEP does not provide the same flexibility as the AEP where you can make any changes you want.
The new regulations will provide Medicare enrollees an additional timeframe to decide how and where to obtain their benefits. Under these new rules, however, enrollees may only move to a differing Medicare Advantage plan one time.
My role in this process is really about showing people their options for Medicare from private insurance. However the majority of the time I’m helping people with what they need to do before we can proceed to review their options for a Medicare Advantage, Medicare Supplement and Medicare Prescription drug plan.
If someone is still working and covered under a large group insurance plan for themselves or through a spouse, they have an option of keeping that insurance or going onto Medicare. There are many variables to consider; what their household income is, how good is the insurance that they currently have vs. their options with a Medicare plan, and how much their group insurance premiums are.
If a large group insurance plan is an option for them, we also need to look their prescription drug use. On group plans there is no “doughnut hole” but on a Medicare drug plan there is (Until 2020). So, if someone is taking 3 or more name brand drugs a day, the likelihood of them going into the doughnut hole and consequently paying more for their prescriptions drugs is more likely on a Medicare drug plan.
If someone has worked past 65 and stayed on a large group insurance plan but is now ready to retire, then there is a process with Social Security to get their Part B portion of Medicare activated. There is a form that Social Security doesn’t broadcast but exists that can be filled out and turned in that shows a sudden decrease in income so that they don’t have to pay more for their Medicare Part B and Part D than necessary. The government bases what you pay for Medicare Part B & D on the tax return you filed two years earlier, so this can be a big savings.
Complicated? Yes...To me? No… Well, sometimes situations are unique and we learn together. Most of the time people tell me they don’t know how they could have ever gotten through the process without my help, and that’s rewarding.
A prescription drug formulary is probably one of the most ignored portions of a person’s knowledge of their current insurance coverage.
Usually people don’t pay attention to it until they go to fill a new prescription from their doctor and get sticker shock from the price. It is your responsibility to know what medications are included and reasonably priced with your insurance, and you more than likely have never seen your formulary. So, you play “Russian Roulette” with your newly prescribed drugs, holding your breath when the pharmacist is ready to give you the total, or they call you to make sure you were aware of the cost of the medication before you arrive to the pharmacy (a much kinder approach). If a prescribed drug isn’t in your formulary, it can range in price between several hundreds to thousands of dollars. If it is included in your formulary, but is a Tier 4 or higher drug, you could pay up to several hundred dollars a month for just that medication.
What is the definition of a prescription drug formulary? The main function is to specify specific medications that are approved to be prescribed under a certain insurance policy. There are tiered levels with financial incentives for patients to select lower-cost drugs, which in turn saves both them and their insurance company money. The development of a formulary is based on evaluations of efficacy, safety and cost-effectiveness of drugs. Formularies cover at least one drug in each drug class and encourage generic substitutions.
Back to my “real world” experience. This is important stuff, and there is a lot of money at stake if you are complacent or ignorant about being informed. Many times this is the biggest monthly expense medically for my clients and the most important part of my “fact-finding” when I first meet with them. If you have an insurance broker, ask them for a current version of your plan formulary (it’s updated annually every January 1st).
If you don’t have an agent, call customer service for your current insurance and request one. Formularies are so large now, that most likely it will be sent to you in a PDF format, which is great because you can search “key words” in that electronic document. Lastly, if you’re computer savvy, then you should be able to go to the website of your insurance company and download the current formulary without entering anything more than the name of your plan. It’s information that the insurance companies want to be easily accessible and easy for you to find, unfortunately you just didn’t know that was the case, but now you do. So, get busy on your research before you forget, otherwise you may just be “throwing money away”.
Medicare generally does not coordinate with VA benefits. You can have both Medicare and VA benefits, and many people choose to use both benefits in order to have access to more providers and services.
However, with few exceptions, Medicare and VA benefits do not work together. Medicare generally does not pay for care that you receive at a VA facility.
In order for Medicare to cover your care, you usually will have to receive care at a Medicare Certified Facility that works with your Medicare coverage. In order for your VA coverage to cover your care, you must generally receive health care services at a VA facility. Exceptions can be made, such as
if you receive prior authorization from the VA to receive VA-covered services at a Medicare-approved facility. If an emergency occurs that requires you to receive such care, the VA may cover some of those costs until you can be moved to a VA facility for continued care.
If you are Medicare eligible, you may want to enroll in Medicare Part B ($134 monthly premium), even if you have VA coverage. Part B may cover services you receive from Medicare-certified providers and provide you with medical coverage outside the VA health system. Without Part B, you will not have Medicare coverage for physician, outpatient, and ambulance services. In addition, if you don’t enroll into Part B when you are first eligible to do so, but later decide to enroll in Part B, you will likely face a late enrollment penalty for Part B for each 12-month period you were without Medicare Part B coverage.
Drug coverage offered by the VA is considered, “credible”. This means that it is as good as or better than Medicare Part D prescription drug coverage, and as long as you remain enrolled in drug coverage through the VA, you can delay enrolling in Medicare Part D without a late enrollment penalty, or just keep your VA drug coverage indefinitely.
The recent wildfires in Orange county were tragic. But as the saying goes, “Every dark cloud has a silver lining.”
In this case, for those that didn’t change their current Medicare Advantage plan or Medicare Prescription Drug plan during the annual open enrollment window (October 15th -December 7th), they now have an opportunity to do so up until March 31st.
The Centers for Medicare & Medicaid Services (CMS) announced a special enrollment period (SEP) for those living in counties where FEMA (Federal Emergency Management Agency) has declared a weather-related state of emergency or major disaster such as the recent fires. This special enrollment period ends on March 31st, 2018.
In addition, the SEP is available to those individuals who don’t live in the affected areas but rely on friends or family members who live in the affected areas for making their healthcare decisions. You don’t need to live in the specific area where the fires happened, you just need to live in one for the following Southern CA counties: Orange, Los Angeles, Riverside and San Diego. There are other counties in Northern and Central CA as well.
This SEP (special enrollment period) is only available for Medicare beneficiaries who DID NOT enroll in a 2018 MAPD or PDP plan during the regular Annual Election Period (AEP). Individuals who made an election during the AEP cannot use this SEP to make a second AEP election. Residents have until March 31, 2018 to make changes to their Medicare health and prescription drug plans.
I’ve helped many people already benefit for this unexpected opportunity, if you have any questions about if you qualify, please don’t hesitate to call.
With Open Enrollment behind us, many Medicare beneficiaries that are on a Medicare Advantage plan are unaware of the annual Medicare Advantage Disenrollment Period.
From January 1st to February 14th beneficiaries who wish to dis-enroll from their Medicare Advantage plan and go back to Original Medicare are allowed to. They can purchase a Medicare prescription drug plan and a Medicare supplemental plan to round out their Medicare coverage and fully protect themselves. Adding the Medicare prescription drug plan is a guaranteed right, but enrollment in a Medicare supplemental plan is not guaranteed unless certain criteria is met. If an individual does not meet the guaranteed issue criteria, then underwriting is involved. Sometimes someone doesn’t qualify right away for a Medicare Supplemental plan, and they may need to wait to add it until they do. Once someone is on Original Medicare, a supplemental plan can be added anytime in the year.
The second important enrollment period is the Medicare General Enrollment Period and it occurs annually between January 1st and March 31st, with coverage starting July 1st.
This is an important window of time for those that didn’t activate their Part B portion of Medicare during their Initial Enrollment Period, or had Part B activated but then lost it for some reason. The first of the two scenarios is happening more frequently as the age requirement for receiving Social Security increases. Many people are still under the impression that they are automatically enrolled in Medicare Parts A and B when they turn 65. But that only happens if they started taking Social Security at age 62. (Enrollment in Part A still happens automatically at 65 and has no premium for the majority of our population) The second scenario; dropping Part B during the year, generally happens because someone forgets to pay their premium for Part B (if they’re not yet taking Social Security, they get billed for it)
In most cases, if you don’t sign up for Part B when you’re first eligible, you’ll have to pay a late enrollment penalty for the rest of you life (there are exemptions for some low-income cases) The LEP for Part B may go up to 10% more than the standard premium ($134 a month) for each full 12-month period that you could have had Part B, but didn’t sign up for it.