How to Transition from Private Insurance to Medicare After Age 65

GUEST Ray Martin Martin and Associates Insurance Ray@WeRetireSmart.com

The Transcript

Art Wiederman, CPA: Hello everyone and welcome to another edition of The Art of Dental Finance and Management with Art Wiederman, CPA. I'm your host. My name is Art Wiederman and for my first time listeners of which we have a lot of them every single episode, I am a dental division director for the CPA firm of Eide Bailly. I'm located in our offices in Tustin, California. I work out of my house in South Orange County, in Laguna Beach, and I've been a dental specific CPA for 38 years, and I have a special episode for you today.

I always say that I have a special I guest maybe one day I'll say, Yeah, this episode is really crappy. Don't listen to it. I don't think I'll ever do that. But today I have one of my long term professional friends. His name is Ray Martin, and Ray is a specialist in helping individuals with transitioning from private insurance to Medicare. Now, for those of you who are 30 and 40 and 50 years old listening to this podcast, don't turn it off because you may have a mom or a dad or an aunt or an uncle or brother or sister who don't really know what to do regarding Medicare. You may be on your spouse's policy and you may not know what to do. So this really covers everybody. It's a big decision transitioning over. So Ray is my go to guy.

When a client has to decide what they want to do for Medicare and insurance once they reach the age of 65. So we'll get to Ray in a moment. I want to tell you about our wonderful, wonderful partners, Decisions in Dentistry magazine. Decisions in Dentistry magazine is the premier clinical dental magazine in the world. If you want great continuing education, they have 140 CE courses teed up for you at a very, very reasonable price. They have a great website. Go to www.DecisionsinDentistry.com.

And also, if you're looking for a dental specific CPA, we're here at Eide Bailly. We work with over a thousand dentists, mostly in the western United States, and we're always taking new clients. There is one requirement you have to be nice. We like nice people. And that's the great thing about working with dentists. Folks have been doing it for like say 38 years and my clients are just the nicest people. They care. I've had occasion to refer some of my friends to some of our clients, and it's just amazing to see them go into dentist mode and to see how they take care of people. So, you know, my phone number is 657.279.3243. My email is awiederman@EideBailly.com.

And I also have my brethren, which is the Academy of Dental CPAs, 25 CPA firms across the United States that represent over 10,000 dentists. So before we get to Ray, I just got back and we're here at the end of September of 2022. And this past weekend I just got back my wife Lynne, and I got back from a six day trip to Italy and Ray and I were talking. He's apparently has a lot of experience in dealing in going to Italy and stuff, and we ended up going to Cinque Terra is gorgeous. Five towns, if you ever get a chance to do it. There's hiking, there's boat rides, beautiful beaches. It was really wonderful. And then we did a day of planes, trains and automobiles, three trains, an airplane and a cab to get to Brindisi in the Julia region spelled Puglia. And then we embarked on a nine day, eight night bicycling trip. Now the one thing I learned is a I will probably never ride anything other than an e-bike again, and B, I will not be joining the Tour de France any time soon. But I did cycle 170 miles and six days, which permitted me to eat pizza and pasta and drink wine, which is why I did it. So if you have ever not if you've never been to Italy, go. It's gorgeous. It's gorgeous. And that is sponsored by the Italy Travel Foundation or whatever that is.

But anyway, so let's get to our topic today and our guest, Ray Martin. Ray is the founder and president of Martin and Associates Insurance. And Ray has devoted his career to helping individuals with their insurance needs. He's also a registered investment advisor, and he has written a bestselling book called The Nuts and Bolts of Original Medicare, Medicare Supplement Insurance and Medicare Advantage.

Now I am getting close. I was going to count the number of days. I am 63 years old in one month, so I'm about 23 months away from Medicare and I've already started talking to Ray about Medicare. And, you know, what do I do and how do I do it? There's a lot of ins and outs and planning. And this is a great episode, folks, that, again, if you're getting close, listen to it a couple of times. If you have a family member or a brother, you know, brother or sister, like I was saying, send it over to them. Let them listen to it, because Ray is going to kind of walk you through the whole gamut. So, Ray Martin. Welcome to the Art of Dental Finance and Management.

Ray Martin: Good morning, Art. Yeah, thank you for inviting me on the podcast. I appreciate it. And yes, and I'm here. Hopefully what we'll share today will enlighten a lot of your listeners, and I think it'll be worth their time to take a few minutes to listen to this, because everyone has to cross, eventually, cross the bridge of Medicare.

Art Wiederman, CPA: Well, first, let's talk about Italy. You said you've been to Italy five times.

Ray Martin: Yes. Yeah. Back in the early eighties, I was director of a nonprofit which sponsored academic events. So and every year and they would hold those events in Rome. So I actually had trips to Rome every summer. I traveled around Rome. I'll tell you real quick and just an interesting story. I was the travel coordinator in those days. In the early eighties, you had to they were paper tickets. And so you had to go for especially for people who flew internationally. You had to reconfirm every single ticket. So one morning I just decided the travel agency near the hotel was about two miles away. I had a stack of 200 physical airline tickets that each participant gave me their ticket. I walked the two miles, got there at about 12:05, and learned that the Italians take a siesta at 12 noon and don't reopen their stores until three or 4 p.m. in the afternoon.

Art Wiederman, CPA: Oh, my God. Yeah, I saw that when I was in Italy. We were talking about this before we started recording. Is that yeah, they shut down 12, 1:00 and they don't open up until, you know, 4:30, 5, 5:30.

Ray Martin: Right. Right. It's an interest different way of business than in the United States. I was quite shocked. I mean, I couldn't imagine American stores closing at 12:00.

Art Wiederman, CPA: Well, I will tell you, the Italian people are very, very happy people. You can see it on all their faces. And I had a wonderful time. It's one of my favorite places on the planet. But while we would love to talk about Italy for the next hour, we are going to talk about Medicare. But first, Ray, tell us a little bit about your professional journey and kind of how you got to where you are today.

Ray Martin: Sure. Thank you. Well, I've been in the in the insurance industry for 30 years, actually, 32 years. I started with a company called Prudential, learned all about life insurance, disability insurance group, medical insurance. And then in 1990, I branched out on my own, started my own agency. And soon after that, really began to discover the issues that well, at that time my parents had to deal with, which was Medicare and long term care and issues like that. And the more I learned about it, the more I felt it was a very rewarding career to help people who are transitioning to Medicare. So I started my own agency in 1992. I've been growing it ever since.

Now my two sons, Elliot Martin and Mohan Martin, are now full time working with me in my business. I'm so happy that they're here and helping our company grow. And we're growing probably by about 10% a year. I'm also a registered investment advisor. I have a series 65 securities license, but I've written several books. Of course, you mentioned it at the beginning, the Nuts and Bolts of Original Medicare and Medicare Supplement Insurance. I've also written a book called Stress Free Retirement. So that's kind of my specialty. And we have probably over 2000 clients that are on Medicare and growing every year by a couple of hundred clients.

Art Wiederman, CPA: Well, let's get right into the topic, Ray, because there's a lot to know about Medicare and insurance is so important and you don't want to screw this thing up. So let's start off now. You know, I think there's a lot of people out there, a lot of our listeners who just say, well, I turned 65. I have to go on Medicare. Is that true?

Ray Martin: Well, no, not necessarily. So let me explain something. So when someone reaches age 65, they have a seven month window to enroll in Medicare. They have a three month window prior to their 65th birthday. They have the month of their 65th birthday and they have three months after they're 65th birthday. So it's actually a seven month window to enroll in Medicare. However, they don't necessarily have to enroll in Medicare if they're currently employed and covered under employer group insurance. And I want to be very specific. They need to be active employees. It can't be just something that they retired and left their company and kept it. So if they're an active employee and have employer group insurance, they could continue on that insurance if they want to.

Art Wiederman, CPA: But, okay, so this is important. So if I have somebody who's an employee and then they leave and we know under the COBRA rules, they can continue to pay for their own insurance for I believe it's 18 months. Right. You're saying that that doesn't work, right, they have to be an active employee.

Ray Martin: Okay. So here's the rules right now. Under CMS, which is CMS is the government agency which rules which basically runs Medicare. Meets CMS, if someone is on COBRA, CMS only recognizes as that as group coverage for eight months. If they stay on that COBRA and they're past age 65, if they stay on it past eight months, they're going to have a penalty from Medicare.

Art Wiederman, CPA: What is the penalty if you're supposed to go on Medicare and you don't?.

Ray Martin: So the penalty is a 10% penalty on their part B premium. Whatever the Part B premium is at the time. And right now, it's about $170 a month. That would be a $17 penalty, and that goes on forever.

Art Wiederman, CPA: But was that $17 per year?

Ray Martin: Oh per month, sorry, $17 per month. That's a 10% penalty on the $170 monthly Part B premium. So that's $17 and that's every month and it goes on for the rest of their life. So they don't want to stay. The point I'm trying to make Art, is if they leave their employer and go on Cobra, don't stay on Cobra, contact someone to help them transition to Medicare.

Art Wiederman, CPA: Okay. So let's do a little bit of the math here. Okay. And so for our and this is I want to get into this and then we're going to get the gist of what we're talking about is what the different things that are covered in supplementals. And that's where you're going to tell us all of the rules and stuff. But so you got somebody most of my dentists are in a group and their group is, you know, the notwithstanding the large national dental companies, which is a different animal, but a private practice dentist has anywhere between maybe three and, I don't know, 20, 25 employees. So my experience is that most of my dentists who are covering themselves were between the ages of 55 and 65. And I hit that when I was in my own practice. They're paying $2,000, $2500 a month for private insurance, and there's really no way to get around it, right?

Ray Martin: Mm hmm. Well, you're right. And especially in a dental practice, probably the dentist is the oldest member of the practice and probably has younger of the employees are probably a lot younger. So the premium for the dentist is probably going to be the highest cost of their group insurance.

Art Wiederman, CPA: So go ahead. Yeah.

Ray Martin: So getting around to the point. So the question is, the question I would ask is for dentists to take a look at what are they paying individually for their group health insurance and compare that to what if they're aged 65 or older, what would be the comparable cost if they went on original Medicare with a Medicare supplement and a standalone prescription drug plan, which is really like a PPO. It would give them freedom to go to any doctor, any hospital, any specialist.

Art Wiederman, CPA: Yeah, and that's going to be my experience a lot less. And we're going to we're going to get kind of get into that. We'll get into the numbers. I think we're getting the numbers, though, later. I want to get into you know, let's start talking about the different parts of, you know, let's break Medicare down and get into the weeds. We've got four parts. We've got part A, part B, part C, part D, we've got supplemental, you know, and all this kind of stuff. Right. Yeah. So let's start with party. I mean, you, you taught me something yesterday is part A, if you go on to Medicare and you don't if you don't go into Medicare, you can still get part A and it's free, right? Isn't that what you told me?

Ray Martin: Yeah.

Art Wiederman, CPA: So I'll start with what you know, the traditional is the part B, but let's start talking about part. What is part A?

Ray Martin: Okay. Yeah. So, so when someone turns age 65, even though they're covered under a group insurance, they can still enroll in Medicare Part A, which is I would recommend it. And the reason for that is that every month we're paying for Medicare through our taxes. So part of Medicare is already paid for. If someone has worked at least for 40 months, I'm sorry, 40 quarters or a quarter, which is ten years, then someone's part a Medicare is essentially paid up, which means that when they go on part A, they don't pay any premium for it. So why not? Why not? At least when someone turns off a dentist is turning age 65, why not at least enroll in Part A since there's no charge for it, and then they can wait if they'd like their group insurance and their premiums are relatively low, which I probably not very often.

Art Wiederman, CPA: Unless they're covered under a spouse's plan. Maybe one spouse is the dentist and the other spouse works for Microsoft, Apple, big, big company that's got great insurance, that's inexpensive. I mean, we see that a lot, too, right?

Ray Martin: Oh, yeah, absolutely. And we've run across that as well. And that's why when we talk with clients who give our office a call, we always ask these questions. You know, how is what is your current coverage? How much are you paying for it? And we get into those details because we don't want to get we want to give people the best advice possible and to save their money to make sure they have the best coverage possible. And as and two, as most as economically as possible. But getting back to your question about part A. Part A is hospitalization, that is the hospital portion of Medicare. So and when you're on Medicare, any time you go into a hospital, you're being covered under part A of Medicare does not include the doctor who might come in from outside and perform a surgery. He's going to be covered or she will be covered under Part B of Medicare. But any charges while someone's in the hospital that are directly from the hospital are covered under Part A of Medicare, Part D also covers skilled nursing care and a limited amount of home health care. Medicare does not and I'll emphasize this Medicare part or part B does not cover long term care. So that is a completely separate issue. But part A is hospitalization.

Art Wiederman, CPA: So let's say that I'm someone who, again, maybe my spouse works for a large company and I'm not going to go on Medicare. Do I need to go down to the Social Security Administration to apply for part A, how does that work?

Ray Martin: Yeah, good question. So there are several ways of applying for Medicare now because of the pandemic, COVID pandemic, Medicare is transitioning a lot to allowing people to enroll online so someone can go to the Social Security website, which is www.ssa.gov. And you'll see there's a little button if you scroll down it says Medicare and then if you click on that button, you scroll down further, you'll eventually see there's a button that says Apply for Medicare Only. So someone can apply online or they can call the Social Security Administration. And I'll give that phone number, if that's okay.

Art Wiederman, CPA: Oh, absolutely.

Ray Martin: Yeah. So the phone number for the Social Security Administration, if you want to enroll in Medicare over the phone, is 800.772.1213. And if you call that number, here's my recommendation. Don't call Monday morning or Friday morning. This social security administration is backed up. They're overworked, overloaded. They have don't have enough employees to handle. Because in the United States, there's ten the baby boomers right now, 10,000 people a day are turning 65 in the United States. So you can imagine the phones are going crazy at the Social Security Administration.

Art Wiederman, CPA: And then in covid, all the government agencies, IRS, SBA, HHS. I mean, everything. I mean, they're just like way behind in all the work they had to do because they were shut down for months and months and months.

Ray Martin: Right. That's exactly right. Now, you can also, when you call that number, 800.772.1213, you can request to have an appointment at your local Social Security office and enroll in Medicare that way as well.

Art Wiederman, CPA: Okay, that's great information. All right. So now let's go to Part B, which is the traditional Medicare, the big deal in Medicare. So tell us what Part B is and how does it work? How much does it cost? And let's talk about that.

Ray Martin: Okay. So part B of Medicare is basically covering everything else that Part A didn't cover. So part is covering hospitalization, part B is covering everything else. That means doctors, specialists. That means all kinds of radiological services, MRIs, PET scans, CAT scans, surgeons, physical therapy. It also covers Part B, covers things like cancer treatment, because most cancer chemotherapy is by intravenous, it's through IV and it has to be performed in a doctor's office. There is a basically in Part B covers any illness or injury which is medically necessary. Okay. So if it is medically necessary, if it is ordered by a doctor, then Medicare is going to cover it.

Now, Medicare and this is really important, Art. Medicare is a, Original Medicare is a fee for service insurance system. I call it the Cadillac of health care, because really it's better than a PPO, because literally you can go to any doctor in the United States who is contracted with Medicare, no questions asked. You don't have to call an insurance company to get approval. You don't have to go get a referral. You just simply find a doctor that you want to see. You call them up and you make an appointment. I mean, that is an incredible medical system. It was created in 1965. It works the same way today. So and there are also are a large number of preventative services provided under Part B of Medicare. So there's cancer screening, there's mammograms and wellness checkups for women. There's all kinds of diabetes prevention services. We have actually a list that we send out to our clients. Overall, it's a long list, like a page long of all the different preventative services that they can take advantage of with Medicare. So that is essentially Part B. Okay. Go ahead. Talk about the numbers.

Art Wiederman, CPA: Well, yeah, let's talk about the number. So it's not free. Part A is free, but Part B is not free.

Ray Martin: Correct. So the standard premium for Part B in the United States as of 2022 is $172 a month. Okay. That was a pretty big jump because the previous year, 2021, it was $143 a month. So it jumped pretty big. Now there are also five tiers. So there are tiers for higher income earners and it can go up to as high as about 500. And I think it's about $580 a month for the highest income earners. Those are individuals who are earning over $700,000 a year. But if you're earning if a husband and wife and they're earning under $190,000 a year, they're going to pay the standard Part B premium, which is $170 a month.

Art Wiederman, CPA: So let's and again, I am required by law to talk about numbers on this podcast because I'm a CPA and this is the Art of Dental Finance and Management, right? So I have a client who is they're covered through the spouse in a company that's got like 2500 employees. You and I talked about this yesterday. Okay. And it's a client of mine, right. And so this particular client is still working at the age of 65 and they're making the maximum. So they're going to pay the what'd you say, 580 a month. And then we're going to get into talking about the supplemental here in a minute and to jump a little bit ahead. You said the supplemental policies run a couple hundred bucks, 200, 250 a month. Right.

Ray Martin: Just turning age 65 over here in I live in Orange County, California. So someone turning age 65 here in Orange County, the monthly premium, starting monthly premium's about $170 a month.

Art Wiederman, CPA: Okay. So we're looking at about $700 for someone who's on the maximum is $750 a month. So then when we were talking to this client, this client was paying $550 a month because they're part of a big group. Yeah. So it's 750 versus 550. But if they go with the full Medicare, they don't have any out-of-pocket. Right. If you do, Ray, if you do the full Medicare Part B and the supplemental, do you have any out-of-pocket for anything for the most part?

Ray Martin: Yeah, that's a great question. So here's how it works. So if someone has original Medicare A and B and they purchase a Medicare what's called a medigap policy or Medicare supplement insurance, which right now the top of the line Medicare supplement plan is a Plan G, as in George. If they have those three things in place, then they all they pay annually is a small part be deductible of $230. Okay. When they met that deductible, everything else that they have, every other medical cost they have throughout the year is covered 100%.

Art Wiederman, CPA: So doctors here's the math problem. Right? So if I'm if I go on Medicare. Yeah. And, you know, if you're paying $2500 a month for your health insurance, it's a no brainer. Right? Right. I mean, we're going to go from $2500 a month to maybe seven, 800 a month. Sure. But if you're covered under a spouse's policy or something else. Mm hmm. Where you know, you're paying, you know, five, 600 a month, then you have to look at how much out-of-pocket you're paying. So this client had a you know, they have, you know, $20, $20 co-pays for everything they do, plus $1,000 deductible, plus a what's called a stop loss. And I have to tell you, a stop loss is. So in most insurances, folks, the way it works is you pay your co-pay, you have a thousand deductible. So the first thousand dollars is on you. Then the policy usually covers 60% or 65% of everything up to. In this case, this client was $7500, so they had to pay up to potentially another 7500. So in that case, they might have to pay 7500 plus the deductible of eight of a thousand. 8500 plus. Yeah. So then it gets to the point of you got to compare apples and oranges, right. And you do that with your clients a lot, right?

Ray Martin: Yeah. Oh, absolutely. Yeah. We go through these numbers with everybody because it really does as you said, it boils down to the numbers. The numbers have to make sense. And there's some other kind of more subtle questions or subtle issues, which is how is the person's health? So they might have those co-payments and deductibles and then co-insurance up to, you know, the max. But it might be like you, a person who's in great health, a bicyclist or a runner, and they only see the doctor once a year. Well, then they might want to stay on the group insurance. But on the other hand, let's say someone who has some underlying co-morbidities, some heart disease, high blood pressure, diabetes, things like that, and they're going to the doctor a lot. They're getting a lot of medical treatment. Then the numbers start really, they start evening out and then actually Medicare starts looking a lot better.

Art Wiederman, CPA: So what we want to do, folks, is if you're in that situation again, if you're on your dental practice group insurance paying 2000, 2200 a month, there's no decision. You go on Medicare and get ready to get you all the supplemental stuff you need and you're covered. But if you're not, then you got to run the numbers and see how that works. So let's get into this and you know, we'll get into C and D and some other things. But let's get into the Medicare supplements or the Medigap. So we get part B, which covers and I'm just reading this off your website, unnecessary doctor services, preventative care, durable medical equipment, hospital outpatient services. I think you get pizza in Italy too from it, right? I think you do. I have to check you have to check the fine print. Yeah.

Ray Martin: There's foreign travel, emergency coverage as well.

Art Wiederman, CPA: Well, to me, emergency travel is if I can't find a real good piece of pizza where I am in Italy, but you know, lab too. I mean, so it covers all that. So let's get into the supplements. What does part B not cover?

Ray Martin: Yeah, okay. That's a great question. Before I answer that, I mean, just address one other issue which you brought up and that is what I found over the years, is that that individuals who have been on employer group insurance when they become Medicare eligible, you know, it's like it's just kind of us as human beings, we're comfortable with what we've had and we're afraid of change. And so that's what I found a lot of about individuals who've been on employer group insurance for a long time because, you know, change is kind of scary. But when we sit down and we help our clients can navigate through Medicare and look at these numbers and when they do make the transition. So many times they come back to us and say, boy, Ray, I wish I had done this years ago. But it is kind of a scary thing at first to make that move from group insurance to Medicare. But I want to just assure your listeners that they should really consider it, because Medicare is a great health care system.

Art Wiederman, CPA: It is. And so before we get into the supplement in the Medigap, what I'd like to do, folks, is again and for those of you who've listen to my podcast, we're coming up on four years, I believe, four years we've been doing this podcast. I mean, we have thousands of listeners. You know, our podcast is provides, you know, great information, world class people who are experts in their field. So I'm going to let Ray I'm going to let you give out your information. And so let's say I got somebody, you know, and again, it could be for them. It could be for their spouse, it could be for their friend, cousin, an uncle, brother, sister. So how would someone work with you? How do you work? And let's give out and give out your phone number and website and email and, you know, whatever, whatever you want to give out.

Ray Martin: Sure. Yeah. And thank you for the opportunity, Art. And let me just let everyone know right upfront. There is never a cost or charge for our services. I repeat that there's never a cost or charge for our services. So we're licensed, licensed in almost 30 states. We have clients all around the country. We are a family run business. I said in the beginning, my sons Elliot and Mohan work in our company. We have three other agents that have worked with me for over ten years, so we have a lot of specialists here and there's not a charge for anyone to call. And you don't have to worry about calling us. If you just have an offhand question you're not sure about, call our office or you can send an email and I'll get my email address out. It's Ray@weretiresmart.com. So you should be able to remember that we retire smart dot com. We have a toll free number nationwide which is 800.464.4941. And then you can go to our Web site. We have a lot of educational videos there, Art, so your listeners can go to our Web site. It's called it's www.MartinMedicare.com. And you'll see my son, Elliot, he loves to make videos and educate clients. So we have a lot of great videos that Elliot has done on our website and all of our contact information is there as well. There also is a link, if you would like and I'm going to make an offer Art the first ten people that contact us, either send me an email or go to our Web site. We will mail them a complimentary copy free of charge of my book The Nuts and Bolts of Original Medicare and Medicare Supplement Insurance.

Art Wiederman, CPA: That's very generous. So one more time, give out the phone number and the email. So, guys, if you want a copy of his book and I have his book and it's very thorough and comprehensive, it's not huge. It's not war and peace, but it's got all the information and it can give it out one more time.

Ray Martin: Yeah, it's a very easy book to read. It's only about 65 pages long and it'll have a lot of the information that we've covered today as well. And again, you can send me an email at Ray@weretiresmart.com. Just send me an email. Provide me your mailing address, your name, your mailing address and your phone number. And we will mail you out a copy of my book. It'll be in your mailbox within about four or five days.

Art Wiederman, CPA: Perfect. Okay. Let's get back into the Medicare supplement. Medicare gap. So what we talked about, the fact that Part B does not cover everything. Let's talk about what it doesn't cover. And then we get the Medigap and what does that cover?

Ray Martin: Yeah. So here's the rule. So if Medicare pays, the Medicare supplement is going to pay. That's the rule. So you're not going to find a situation where Medicare won't pay something and the Medigap insurance will. If Medicare let's say you go to it and you have to say someone has to have a back surgery, which is an $80,000 surgery right in the hospital. So they go to the hospital. The hospital part is covered under part A, so that means their room, their board, their food, their medicines while they're in the hospital, x rays laboratory, all that is covered under part A, but then there their orthopedic doctor comes in to perform the back surgery. Well, that doctor is going to charge $80,000 for that back surgery. Medicare Part B in this case is only going to cover 80% of that doctor's charges.

Art Wiederman, CPA: I see.

Ray Martin: So that means there's 20% left of that 80,000 under on. That's not paid for, right? That's $16,000. Well, if someone has a Medicare supplement plan G, that Plan G is going to pay that $16,000. So what was the cost of going into the hospital and having an $80,000 back surgery.

Art Wiederman, CPA: $230, which is the out-of-pocket so and so is the bottom line. So the bottom line is, folks, if you go into if you apply for Medicare and you don't use someone like Ray and you just get your Medicare, you could be costing yourself tens of thousands of dollars. Right, if you don't get the supplemental.

Ray Martin: Yeah, well, and I think that's true. And, and it's really important that people should be aware that they shouldn't. Then when they go on Medicare, you don't want to just go on Medicare only. There are a lot. And although Medicare pays for almost everything it does and covers almost everything, it doesn't pay for everything. And that's where the Medicare supplement insurance comes in to pick up those parts of Medicare. So, for example, if someone's in the hospital after 60 days, there's a daily co-payment of almost $300 per day, and that goes up to $700 per day if they. God forbid. But they had to be in the hospital more than 90 days. If they have a Medicare supplement, those additional days are all going to be covered and paid for. So you can go and get you can go to in here in Southern California, the best hospitals are like Keck Hospital at USC, Hoag Hospital, Cedars Sinai, Saint Joseph's. And you can go to any one of those UCLA. I mean, people love to go to UCLA and it's about it's known as the best hospital in California. If they have a UCLA, it does not take HMOs. So if someone really wants the best medical care, then you'd want to stay on original Medicare with a Medicare supplement.

Art Wiederman, CPA: So there's basically I mean, and there's no maximum on these rates. I mean, if, God forbid, someone ends up in the hospital for six months, there's I mean, with a private insurance, there's a million or $2 million maximum with this. There is none, right?

Ray Martin: Well, there's not a dollar maximum, but there a day maximum. So but the day maximum with Medicare is about 130 days in a hospital. And then the supplement gives another 300 days. Who's going to be in the hospital that long?

Art Wiederman, CPA: Right. So you're looking at over a year. Wow. Yeah.

Ray Martin: I mean, they're going to be sent to a skilled nursing facility. And then you're talking about long term care, which is a different issue. Medicare will cover 100 days in a skilled nursing facility as well. And if you have a Medicare supplement, that Medicare supplement pays the gaps in Medicare. So Medicare has a lot of gaps, even though it's great coverage. It has those gaps and those gaps are covered by the supplement.

Art Wiederman, CPA: Does it cover home health care? And in other words, if we have an elderly parent there in their eighties and God forbid, they need someone to come in and take care of them in the house, does they does that cover that, too?

Ray Martin: No. Medicare does not pay. That's considered what is called custodial care, helping with bathing, dressing, feeding, you know, toileting, transferring. Medicare does not cover that. Now, Medicare has a very limited home care benefit, mostly for a physical therapist to come. Let's say someone's recovering from a knee surgery or a hip surgery. Medicare will have someone come to the home to perform some physical therapy. But that's we're talking about someone who's coming and being there for an hour and then they leave.

Art Wiederman, CPA: Okay. All right. So we get to other parts of Medicare that we need to talk about and then we can put a bow on this. And this could be a little confusing. So we now have Medicare Part C, which is called Medicare Advantage. It says it's the part of the Medicare policy that allows private health insurance companies to provide Medicare benefit. How does that work? Well, how does that work in all of this?

Ray Martin: Yeah. So you're right. This can be very confusing, confusing for people when they start looking at Medicare, C, D, what's the difference of all these things? Okay, so let's break it down. There's basically you have two options. Option one is you stay on original Medicare A and B, which we just spent 10 minutes describing. And you combine that with a Medicare supplement policy and then you purchase a standalone Part D, the drug coverage, which is part D as in David. But if you have original Medicare, A, B and D with a Medicare supplement, you're complete. Okay, that's option one. Option two is you assign over your Medicare benefits to a Medicare Advantage company. That's called Part C of Medicare. So now what you're doing is you're assigning your A, B and part D benefits over to a Medicare Advantage company. That Medicare Advantage company is now responsible to provide your A, B and D benefits. But now you're under a different system. You're not under a fee for service system. You're under an HMO system which can be fine. I'm not saying that it's bad. I'm just saying it's a different system. So now.

Art Wiederman, CPA: When would somebody want to do that? What are the pros and cons.

Ray Martin: You know, there's different reasons. A lot of people here in Southern California, these companies, they advertise on television like you can't believe and they offer a zero monthly premium. So that $170 for a Medicare supplement, you wouldn't have to pay because now you're under their system. They give you kind of a premium free system, but now you have to have a primary doctor. And any time you need medical care, you have to go see that doctor first. You don't have the freedom that original Medicare gives you. Okay. And then if you need to see a specialist, you have to get a referral. And also every time you use one of the services, you're going to be paying something. So you're going to pay for it to see the doctor. You're going to pay for an MRI. You're going to be paying something. If you have to get chemotherapy, you're going to be paying something if you go to the hospital. Okay. So there's now it's a pay as you go kind of a system. And it's it has less options, less options in terms of physicians that you can go see.

Art Wiederman, CPA: So while what you're saying, Ray, is I might save the $170 a month in the Medigap supplemental coverage by going within these companies. But if I'm not careful and I use a doctor that's not in their network, I could end up paying a lot more than that, right?

Ray Martin: Well, not necessarily.

Art Wiederman, CPA: Okay.

Ray Martin: You know how you'll have there'll be less freedom of choice, less options, less options. A lot of people join these Medicare Advantage plans, and there are some good ones. I mean, we have clients. We also handle Medicare Advantage plans a lot. The big attractive factor is the zero monthly premium. And also sometimes especially because they're in group insurance, a lot of small groups are HMO groups, and so someone might be in an HMO group. Blue Shield or Blue Cross. And they have a doctor they've been seeing for years as part of their group, HMO. Then when they go on Medicare, they find out that their doctor that they've been under, that they've seen with their group, also is on a Medicare Advantage plan, then that can make sense to go to Medicare Advantage.

Art Wiederman, CPA: But that's the advantage of working with someone who lives and breathes this stuff every single day is you've got options and. Right. So, so under the under the part C, if you know who all your doctors are and they're all covered under this, then that might be an option. But again, obviously, we're not going to get into every single scenario. So Medicare Part B does not cover prescription drugs, correct?

Ray Martin: Yes.

Art Wiederman, CPA: So let's talk about Part D.

Ray Martin: Yeah. So part B as in boy does not cover just a real kind of reiteration does not cover routine dental or routine vision. It doesn't cover cosmetic surgeries and things like that. But original Medicare does cover illness. A lot of people ask, Well, what about dental and vision? Original Medicare doesn't pay for routine dental. It does. Okay. And also routine vision. But if you have cataracts or glaucoma that is covered under Medicare Part B, okay. Part D, Part D is the newest part of Medicare, which was created in 2006. I was actually under I think it was the Bush administration at that time, and Congress passed the prescription drug benefit under Medicare. There is a standalone Part D plans available in every state in the country. And in California, for example, there's over 25 Part D companies. And so this becomes a little bit more complicated. So what we do is when someone contacts us as part of our consulting process is we do inquire about what medications they're taking and we actually shop for their prescription drug plan. When you have 25 different Part D companies you can have, it's very important that the Part D plan you have is going to cover your medications. So we actually shop for a Part D plan for our clients and then find a company that's going to be the most cost efficient and is going to cover their drugs. So that is a standalone policy. So you have your Medicare supplement, which is a standalone policy, and then you'd have a part D right by beside it, which is also standalone.

Art Wiederman, CPA: How much does the Part D cost? It's not that expensive, if I remember correctly.

Ray Martin: No, they're not very expensive. I mean, the lowest premium Part D plan into 2023 is going to be $4.50. But they can go up, they can be 50, $60 a month, but they're fairly reasonable. And Congress, under this recent legislation they just passed, they're actually going to be enriching the Part D plan over the next five years. So the drug coverage under Medicare is going to be fabulous.

Art Wiederman, CPA: Coming up now on the Part D, generic versus brand names. Are you limited to that or how does that work?

Ray Martin: Yeah, so there are five tiers under Part D, so there's generic, then there's preferred brand and then brand name and then there's more expensive drugs maybe on the part D plans will cover your generic drugs like blood pressure drugs or blood thinner drugs and a zero co-pay. So there's a lot of them that you pay nothing to get your medication and then they kind of go up from there, depending on how expensive the drug is.

Art Wiederman, CPA: Now, let me go back to something we have at the beginning. You can apply for Medicare. And again, there's a penalty if the government wants you to have insurance so you can apply for Medicare once you are no longer working for a company. But, I mean, is there any time that you can be if you get over 70? Can you not apply? Can you apply for Medicare at any time? How does that work?

Ray Martin: Yeah. So someone's covered under employer group insurance, there is no penalty. So I want to repeat that if you stay on your employer group insurance, you do not have a penalty when you go on Medicare, whether it's age 68, age 70. Believe it or not, we've had we had a businessman who was under his employer group insurance until he was 99 and then came off at 90 and came off it and went on Medicare. And, of course, he paid no penalty because he was covered under the employer group insurance for that.

Art Wiederman, CPA: He was he was a ski instructor, right? Yeah. No, I'm just kidding. But yeah, I mean, but this is this is really important because it's thousands and thousands of dollars. And if you make a mistake. Right. And you try and doctors that this is you know, it's like everything else. If I tried to fix my own teeth and do my own crowns and bridges, I'd get in big trouble. You need to go to a specialist who understands all of this and who can. Give you what your options are. And obviously you want the maximum coverage because when we get to age 65, I mean, hey, I took on this bicycling trip that I took Ray. I took a fall, I took one and my knee still hurts because there's no give in gravel and concrete on the roads of Italy. And, you know my knee hurts and, you know, you get hurt and you get older and, you know, we get into all kinds of different things that are going on and you want to make sure it's covered and you don't get it covered. It can be really, really expensive. So I think we have we hit all the high points. Is there anything else you want to share with the audience before we call it a podcast?

Ray Martin: Well, you know, I yeah, we have really gone through it's been a probably everyone feels like they've been drinking from a firehose here. Yeah, but I want to encourage your listeners again. Just reach out to us. Yeah. At any time and we'd be glad to send you a complimentary copy of my book. Again, for the first ten people that respond, they're going to get a free copy of my book. Sure. We're here. You know, we're a family run business. We love hearing from our friends and people who want to help with Medicare. And by the way, there's no pressure, sales pressure. If people call us, we have people call us all the time. I just want to review is it smart for me to switch to Medicare and we'll tell you, hey, you know what? It makes more sense to stay on your group insurance. We often tell people that and we do that because it's the right thing to do art. And what we find is those same people come back to us three years later, five years later and say, hey, you know what? I'm now retiring, leaving my group insurance. I was so grateful for the help you gave me three years ago. Can you help me now with my Medicare supplement insurance?

Art Wiederman, CPA: One more time, Ray, give out your contact information.

Ray Martin: Sure. Again, let's start with the toll free number. It's nationwide. We're licensed in over 30 states and we're probably adding a new state every couple of months. Our toll free number is 800.464.4941. And when you call, simply ask for my son, Elliot or Mo. They're here in the office every day. I'm also available, but not as much as they are. They're right here every day. And then you can send an email to me at Ray@weretiresmart.com or go to our website which is www.MartinMedicare.com and you'll see there lots of educational videos all of our contact information and there's a link also to order my book.

Art Wiederman, CPA: Yeah and I would again folks, you know, if you get to this point and you're ready to look at Medicare, our podcasts are all on Eide Bailly websites. They are housed there. They're also on your podcast app with your Apple or not apple or orange or whatever you're using. Again, as I told you, I had I have adult children to teach me how to use computers and the Internet. So however you can get a hold of podcasts, they're all they're all my podcast going back to 2018. I think we started this thing are there. So you know when it's time just listen to it again. And you have just gotten a, you know, a master's level course on how it works if you're going to go on to Medicare.

So, Ray Martin, thank you so much. If you kind of hang with me as I take the show out and I would appreciate it. So, folks, I want to again encourage you to go to the website of our wonderful marketing partner, Decisions in Dentistry magazine www.DecisionsinDentistry.com. World class clinical content. The best dentists, instructors, professors, clinicians in the world are published in this magazine, and you can get access to over 140 continuing education courses with the touch of a button for a very reasonable price. Go to www.DecisionsinDentistry.com. If you are looking for a dental CPA consulting advice, if you want to know who's going to win the World Series, what can I tell you? I can probably help you with that too.

It looks like at this point, and I don't know when it'll be when we get published. The young man, I talk about him every once in a while the young man I coached in Little League, Shane Bieber, who won the Cy Young Award and is with the Cleveland Guardians. The Guardians have a six game lead with about 12 games to play. They're looking good. So, you know, maybe they'll make it. Maybe it'll be, you know, Aaron Judge in the Yankees. It'll be fun. So if you need any kind of advice like that or retirement, any of that stuff, my email address is awiederman@EideBailly.com. Shoot me an email. Or call me on my direct line, which is 657.279.3243. Ray Martin, thank you so much for your great, great knowledge and information. I love working with really nice people who are specialists like yourself. Really appreciate it.

Ray Martin: Thank you very much for the invitation to to speak to your audience. I really appreciate it. All the best.

Art Wiederman, CPA: And guys, if you if you need some help on this, I personally use Ray. I send Ray my clients. I don't bring anybody as a general rule on this podcast that I would not refer myself or my clients to. And with that said, folks, we will call it a podcast for today. So I want to thank you for the honor and privilege of your time, the thousands of people that listen to this every month to this podcast. I'm very proud of the work we've done. We're going to continue to do it.

I've got some really great guests lined up. Coming up, we have an episode on the nonfinancial aspects of retirement. You're going to find out what a 2 a.m. friend is. And we've got a wonderful consultant who's going to be talking to us about entrepreneurship. And then we have another episode coming up with our Eide Bailly director of tax controversies Ray Peeler is going to be on here in the next month or two, and we're going to talk about dealing with the IRS and what does it mean that they're bringing 80,000 new IRS employees? We'll find out all about that. So please continue to listen. Please tell your friends, please subscribe to the podcast. And with that, this is Art Wiederman for the Art of Dental Finance and Management with Art Wiederman, CPA. And we'll see you next time.