Podcast Episode - Highlights From: Suze School: Medicare & Medicare Advantage

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Suze gives us a lesson about the differences between Medicare and Medicare Advantage and why it’s vital we know the difference.

Podcast Transcript:

00:00:34

Robert: September 29^th, 2022. Hi everybody, this is Robert, Suze and KT's podcast producer. Now while Suze and KT are absolutely safe and sound, unfortunately Hurricane Ian has wreaked havoc on their satellite system. So they couldn't get me the Ask Suze and KT Anything episode that they were gonna drop today. So. But since we're about two weeks away from open enrollment for Medicare and Medicare Advantage,

00:01:02

Suze: Suze

00:01:03

Robert: wanted you to hear highlights from an episode that we put out two years ago where Suze gives us a lesson about the differences between Medicare and Medicare Advantage and why it's vital that you know the difference. Enjoy.

00:01:16

Suze: I'm aggravated and so aggravated. And let me tell you why. Have you been watching television

00:01:23

Suze: and you’re watching television, and every few seconds an ad comes on the screen all about Medicare and Medicare Advantage and how if you want vision and this and that just call this number and somebody will help you.

00:01:39

Suze: And it's not just normal everyday people that are giving you this information. There are all these celebrities that put their name, they sit there and they tell you why this is such a great deal for all of you to do. And I'm not gonna mention their names, but it's just, really? Like what do you know about Medicare? What are they paying you to say that?

00:02:04

Suze: You don't even need Medicare, really. Look how much money all of you have. What do you know about what it's like not to have money or when you don't have money and you need medical attention and you're getting older and everything, you know, what should you have that really meets your needs? And you're telling everybody they should get in and look at Medicare Advantage? And don't all of you find it just a little bit strange

 00:02:30

Suze: that all these private companies that are offering you Medicare advantage, and I'll talk about this in a second, but they're offering you this,

00:02:39

Suze: that they're spending millions and millions of dollars in advertising to get you to do something? And you really think that means that they're doing it so you save money, or because they make money. So today's podcast is all about,

00:02:58

Suze: you know how you should decide if Medicare advantage is right for. You know, there might be people out there listening and they're like, what is Suze talking about? Medicare, I'm young. I don't need it. Just pay attention, I have a history lesson here for a second because you're gonna need to know this. You know, it was, I think here I'm going to show my age because I can't quite remember for sure. But I think it was July 30th in 1965.

00:03:25

Suze: When President Johnson, he signed a law that led to what we know as Medicare. And this was a plan that would pay for your hospital insurance as you got older, which was known as part A and medical insurance, which was known as part B. And everybody looked forward to getting to be 65 years of age and everything so that they could have Medicare. And it was just part of the system.

00:03:53

Suze: And then in 1997, President Clinton signed a bill and it was called back then Medicare Plus Choice. And he signed this into law. And the goal of this Medicare Plus Choice, was really to reduce costs. To improve your choices, to enhance the quality of the insurance that you were getting via Medicare. And in 2003,

00:04:21

Suze: what Clinton signed into law was officially changed to be called Medicare Advantage or Medicare C. Okay. And it really, since that time, it has undergone some significant changes to say the least. And I have to say that these changes in my opinion, I have to tell you have not always aligned with the original objectives of what Clinton signed into law back in 1997.

00:04:51

Suze: So the reason why you keep seeing ads everywhere on TV right now, is that we are in what's called open enrollment. And between now and December 7th, if you have a Medicare plan, if you're covered by Medicare,

00:05:10

Suze: the enrollment is open so that you can actually go in and change your plan. And the goal of all the advertisements is to get you to change from Medicare, that probably many of you have, to Medicare Advantage. The goal of who? The goal of the private companies that are offering this. So I want to tell you today,

00:05:37

Suze: and just give you a little bit of my thoughts on how do you decide. You have all this advertising coming at you, how do you decide if Medicare advantage is right for you? Right. So now. I've told you that we're in the midst of open enrollment for Medicare beneficiaries when anybody can make changes to their coverage.

00:06:00

Suze: But I want to make sure that those of you who are considering changing, right. You're considering changing from Original Medicare to a Medicare Advantage plan, you better do so with really, really thoughtful consideration and analysis and know exactly what you are getting into.

00:06:19

Suze: Because a lot of times what they're doing, is they're saying to you. You know, we're gonna give you free vision, and hearing, and dental and and transportation and all kinds of things. We're gonna pay for you to join a health club. That isn't why you have this kind of insurance.

00:06:35

Suze: It isn't so that you can join a health club, you have it for when you get sick. So I want you to listen to me and by the way for those of you who have parents or grandparents or friends who are Medicare eligible,

00:06:51

Suze: I hope you tell them to listen to this podcast because you want to help those who are near and dear to you to make really informed choices. All right now, what you need to know is that over the years, right? About a third of the people who enrolled in Medicare are now in Medicare Advantage plans. So Medicare Advantage plans can work well everybody.

00:07:19

Suze: You know. The real appeal to you is that they tend to lower your premiums every single month and they give you broader coverage than original Medicare. That is absolutely true.

00:07:33

Suze: And so therefore like I just said a second ago, the Medicare advantage plan will typically pay and include for vision and dental and things like that. And Original Medicare does not.

00:07:45

Suze: Also Medicare advantage can be really appealing to you because it's easier to navigate. Many Medicare advantage plans roll all of your care into one package. They roll hospitalization, your doctor care, your prescription drugs and everything else under one plan. With Original Medicare, prescription drug coverage which is known as Medicare part D,

00:08:11

Suze: is a separate plan that you must opt into to just purchase it. And when you're in Original Medicare, it is also so important to enroll in a Medigap policy that fills the gap of what Medicare doesn't pay for. So Original Medicare requires that you pay 20% of your bills for the doctors and tests.

00:08:37

Suze: A Medigap policy typically covers the majority, if not all, of those out-of-pocket costs. So we understand how Medicare kind of works? You pay 20% for your bills out of your own pocket for doctors and tests and things like that, but if you have a Medigap policy, it fills the gap of Medicare,

00:08:59

Suze: it will typically cover the majority if not all of those out-of-pocket costs. So I get it. So right off the bat, Medicare advantage just seems like it's just so much easier to deal with, it's so much cheaper, I’m just going to go that route. But I want you now to make sure you understand how it works when you actually need it.

00:09:24

Suze: Again I know I know, I said I want to talk about this but I'm just gonna take that back. I needed, I'm on Medicare. I really needed Medicare this year. I had a serious surgery, I was in the hospital for quite a while, I had many MRI's, I had all of this stuff that I needed. And I have to tell you it wouldn't have worked the same way

00:09:50

Suze: if I had been on Medicare Advantage. The Medicare that I was on paid for everything just so you know. And I got to see any doctor I wanted to. And if I wasn't able to see the specialist that I saw, I have to tell you I'm not so sure things would have turned out the way that they did.

00:10:16

Suze: So I want you to understand that when it comes to Medicare Advantage, most not all,

00:10:23

Suze: a Medicare advantage plan will restrict you to their network of doctors. So I get that when you're younger and you first do this, and younger is 65, that's kind of strange that I think younger 65. Alright but I get when you're healthy,

00:10:43

Suze: and you sign up for Medicare Advantage, that you think a closed network a small network of doctors that you're allowed to see doesn't seem like a big deal when I was 65. I didn't need a doctor like I needed one this year and it would have made a tremendous difference to me.

00:11:07

Suze: So I want you to really just think about what would happen if you developed an illness that required specialized care. With Original Medicare, any specialist who accepts Medicare, and most do, will be covered by the plan. Your plan

00:11:28

Suze: with Medicare advantage. Your coverage is limited to the specialist in the network. I just want you to understand in most cases, you don't have the freedom to choose the care that you want.

00:11:43

Suze: Now you've always heard me say people first then money then things. And I know a lot of you go, it doesn't matter. I can save $200, I can save a little, I just I'm just gonna go get it and I'm covered it will be okay.

00:11:57

Suze: Are you sure, are you sure that if you were to get ill, if your mother was to get ill or your father or your grandmother, that you wouldn't want them to be able to go and see the absolute specialist in that area? Are you positive about that?

00:12:16

Suze: You know some Medicare Advantages truthfully they do also offer PPO Coverage preferred provider options where you can choose from a network of preferred doctors. So if that is more appealing, you might want to compare the Medicare

00:12:35

Suze: Advantage PPO to your current Original Medicare plan. Got that? Just don't go looking at this Medicare Advantage and because some celebrity has told you how great it is and so therefore you should call that you just go ahead and you change. You actually do the comparison now. It's important that you understand your potential out-of-pocket costs. And the great thing about this being a podcast,

00:13:05

Suze: is that you can go back and play this over and over and over again until you really get it. And the reason that I am really dedicating an entire podcast to this, is because the number one and I'm so thrilled about it, is that the majority of you that listen to the Women & Money podcast as well as the men smart enough to listen, really are over 50, 60, 70 years of age and I love that so much I can't even tell you.

00:13:35

Suze: So that's why this is so important. So back to what I was telling you about, with Original Medicare, listen closely, there is no limit to annual out of pocket costs. But that is why it's crucial to have a complimentary Medigap policy.

00:13:54

Suze: It's because the Medigap policy and a Medigap policy just so you know, is sold by a private insurer that covers those out-of-pocket costs. 00:14:07

Suze: Now if you are considering a Medicare Advantage plan, you may be responsible for some copays. So you need to make sure you understand what copays you may have to pay. And make sure you understand the annual out of pocket limit that you may be responsible for. In 2020, this year,

00:14:34

Suze: people who enrolled in a Medicare Advantage plan typically had an out-of-pocket cost limit of about $5,000. So you may very well be responsible up to $5,000 out of your own pocket. Just something for you to think about.

00:14:55

Suze: Also. With Medicare Advantage plans, you will need in most cases, pre-approval for most tests and therapies. Because beyond basic preventative care, Medicare Advantage plans require you or your medical caregiver to get approval for procedures and medications.

00:15:21

Suze: When I was diagnosed on July 20th, I did not have time to get pre-approval. I did not have time to say, will you pay for this, will you not? I was on a plane within a matter of hours, I was in the operating room, really within a matter of hours. And I did not have time. Are you sure you're going to have time?

00:15:47

Suze: Again, Medicare allowed me to pick the best person in the world in my opinion to do the operation. I did not have to get permission beforehand. I just was able to go and take care of myself. Imagine if you had to get beyond basic preventative care, to get approval for procedures as well as the medications that they were going to pay for?

00:16:14

Suze: Now, let's just say you did this, you have Medicare Advantage, and you were denied preapproval for care. Or you were denied reimbursement of a payment.

00:16:28

Suze: So if that happened to you, you need to know, it is very important to stick to your guns and appeal the decision.

00:16:36

Suze: You know, a report was found this year that when Medicare advantage enrollees, or their care providers, because some of you have care providers, you know, appealed a denial or a care of payment, that 75% of the time they were successful. So a lot of you that have Medicare advantage, if you do want to get payment and they deny you, you need to appeal it. Do you hear me?

00:17:05

Suze: But really the problem is, you don't do that. Only 1% of you whose claims were denied, only 1% of you appealed it. You accept what happens to you. No. You pay for something, you have something, it's there to protect you. And if it's not protecting you, you best appeal it Now I just want you to think about this. Okay.

00:17:34

Suze: Which is one of the reasons I have to tell you, and I talk about this by the way in my book, The Ultimate Retirement Guide for 50+. Have you read that book? Are you looking at that book? If you want to get that book by the way, just go to SuzeOrman.com slash/womenandmoney, you can pick up a hardback edition. In fact we will mail it to you for $10 and that includes mainly but these are things that you have to know.

00:18:03

Suze: So anyway, back to this. So I just want you to think about that. One of the reasons that I do say in my book, I don't really love Medicare Advantage programs is this. I want you to think about this. If Medicare Advantage is overturning 75% of the denials, if you have something denied, let me take this slowly for you. You put in a claim,

00:18:31

Suze: you're denied. If you appeal it, 75% of all the people who appealed it, the denial is overturned and they will pay for it. So if they are overturning 75% of the denials, doesn't that kind of smack you as a business strategy? Deny coverage and see if you can get away with it.

00:18:59

Suze: That's how that strikes me.

00:19:01

Suze: That's just how it strikes me. I want you to think about that.

00:19:05

Suze: And they do get away with it, because why? Only 1% of the people of you who are denied coverage, or payment, ever appeal. So in 99% of the denials, the Medicare Advantage provider got away with spending less. When if they were challenged, it was highly likely that 75% of them would grant the coverage payment. Just thought I would tell you that.

00:19:33

Suze: Also. Very important now. If you end up in the hospital for more than a few days, you will pay more. Enrollees, alright in original Medicare like I am, have a flat deductible they pay when they are hospitalized. So this year Medicare part A,

 00:19:57

Suze: the deductible is $1,408 each time you are hospitalized. So it doesn't matter if you're in the hospital for a day, or a month, or six months. You are responsible for $1,408 of hospital charges before Medicare takes over.

00:20:21

Suze: With Medicare Advantage,

00:20:25

Suze: listen closely, you typically are charged a daily copay. So if you're in the hospital for only one day, two days, alright. It's possible Medicare Advantage will be lower. But I have to tell you, that if you've ever been hospitalized for five days or more,

00:20:47

Suze: the odds are that Medicare Advantage copay will be more than if you had Original Medicare.

00:20:56

Suze: Now. Let's say you are switching to Medicare Advantage. And does that matter? Uh huh. Because once you switch to Medicare Advantage, it is basically irrevocable. Did you just hear what I said?

00:21:14

Suze: So if you're one of those out there who have been watching these commercials with all these celebrities and you make a call, and you decide you know what?

00:21:23

Suze: I'm going to switch from my Medicare plan that I have now, and my Medigap policy that I have. And I'm going to switch to Medicare Advantage, okay, but this is what you have to understand. If you choose a Medicare Advantage plan, it's true. You technically can switch back to the original Medicare during the annual open enrollment period which we're in right now.

00:21:52

Suze: But this is just such a misunderstood part of Medicare. While it's true that you can definitely always switch back to Original Medicare like I just said,

00:22:02

Suze: but Original Medicare only covers part A hospitalizations, part B doctor and treatment bills, and of course you'll be able to enroll in Medicare part D prescription drug coverage. But that's all you are guaranteed to be able to enroll in.

00:22:21

Suze: And you're probably thinking well what am I missing?

00:22:24

Suze: Did you hear me say anything about Medigap insurance? Did you not hear me say that if you have Original Medicare earlier on you have got to have Medigap? So remember how I explained how crucial it was to have a Medigap policy

00:22:41

Suze: when you have original Medicare? Why? Because a Medigap plan will cover the 20% copays that are part of Medicare part B.

00:22:53

Suze: Listen closely. Now if you are in Medicare and you switch to Medicare Advantage,

00:23:02

Suze: and now you want to return back to Medicare, you may not be able to purchase a Medigap policy if you have a preexisting condition. Now that is a big deal especially with Covid around.

00:23:21

Suze: So when anyone first becomes eligible for Medicare. If they choose Original Medicare and want to purchase a Medigap policy, the law states that they must be offered a Medigap coverage policy regardless of preexisting conditions. And the premium will not be based on any preexisting conditions. When you go from Medicare to Medicare Advantage,

00:23:50

Suze: or you just go to Medicare Advantage,

00:23:54

Suze: and now during open enrollment, you want to switch to Medicare,

00:24:00

Suze: if you have a preexisting condition, chances are you are not going to qualify for a Medigap policy.

00:24:11

Suze: So let me just be clear here, outside of your initial enrollment period for when you apply for Medicare, right. If you apply for a Medigap policy, the insurer is not allowed to deny you coverage based on preexisting conditions, or charge a premium that is higher because of your age and health.

00:24:38

Suze: If however, you switch from a Medicare Advantage policy back to Medicare,

00:24:46

Suze: that doesn't apply anymore. So it may make it financially impossible for you to switch back to Original Medicare if you want the freedom to choose your doctors, the facilities, and everything else. So that may be a reason why, seriously, you stick with Medicare or the original Medicare that you currently have.

00:25:12

Suze: So I hope you're not. If KT was sitting here, I have to tell you she'd be saying really Suze?

00:25:17

Suze: Really don't you think this was just a little bit over the top? It's not over the top. Because your major expense as you get older is going to be for your healthcare.

00:25:30

Suze: And it's the one thing that really can upset everything in your life if you can't choose the best doctor for you in your particular situation.

00:25:43

Suze: Obviously, Medicare Advantage is better than nothing.

00:25:49

Suze: But if it were me, and I had a choice, between Medicare and Medicare Advantage, oh you betcha, I would stick with Medicare.

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