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?