High Deductable Health plans and IRMA

The opinions expressed are those of the show's host and not the staff or management of Port St. Lucie Broadcasters. Any reproduction without written consent of WSTU and WPSL is strictly prohibited. Now it's time for Quality-of-Life Radio Show. Here are your hosts Gary Owen and Tom Bouvier.

Our goal is to share knowledge and present unbiased information about insurance planning, different solutions, and all the pitfalls to avoid. We bring straight. Transparency, we call it the no plop zone in other words, straight talk all about information insurance planning to help improve your quality of life because it is the mission of Owen Insurance Group to simplify insurance planning so that you can enjoy the stress-free life that you deserve.

The decisions you make today can last a lifetime. So it's important that you get it right the first time. There was some news article out this morning about the feuding Republicans and Democrats.

It's interesting to see, the divisiveness that's going on in our country, in our politics today. But there's some information that came out of today's press release about the high deductible health plans and it says that the GOP is pushing to get more Americans into high deductible health plans, and that is dividing Democrats.

We're not here to talk about politics we're here to break it down to the ridiculous, so you can make an informed decision about what's best for your health care. So today we'll be talking about the high deductible health plans. And second to go along with that we're going to talk about IRMAA – the Income Related Monthly Adjustment Amount (related to Medicare beneficiaries with higher incomes).

There are some 2023 changes to IRMAA that so many are not familiar with, but you may, if you're part of the 8% who get to enjoy writing that extra check for your Part B premium and your Part D premium this is for you, stay tune in. But before we do, Tom. Let's talk about the quote of the day, about how life knocks down so many people and we get right back up again.

Absolutely. And the quote is this, “Life has knocked me down a few times. Quite a few times. It showed me things I never wanted to see. I've experienced sadness and failure, but one thing for sure. I always get up”. Always gotta get up. Keep on keeping on. The only time I'm going to lay down and stay down is when I breathe my last breath.

Absolutely. I love it. All right. Let's get on with today's show. And again, we really appreciate you being with us today. And I'm sure you'll find value in what we do and the information that we provide.  

Let's get right into how the Republicans and the Democrats are divided about high deductible health plans. Just to be fair, the article really is pertaining mostly towards under 65 consumers, those who are on Obamacare, or ACA individual health plans, but it says bipartisan legislation aims to get more Americans into high deductible insurance.

The article mentioned, “perils would remain”. I'm not sure what perils would remain when it comes to the Medicare side, Tom. I don't believe that that would be true on a high deductible Medicare supplement plan. Maybe on Medicare Advantage. We'll get to that, though. Certainly, there could be some issues with high deductible individual health plans that we see today that are going up.

Well, on the marketplace, the max for 2023 is around $9,100. There you go. And for the majority of Americans who may be on it, a (financial) hit of $9,100 would occur with a catastrophic medical event in their life. That would be a big hit and most likely that type of sickness would keep most people out of work.

No doubt. If they were the income breadwinner, that would put a hurt on them. And a lot of people are working paycheck to paycheck and reported on the news recently, people are tapping in their 401K’s and IRAs. It's just horrible for their retirement. These high deductible health plans can be very harmful if people don't have the money. But there are other plan enhancers, accident plans, and GAP plans that can help people with deductibles. And you and I have used those, Tom.

We certainly have. And I had a client purchase one of those plans who told me that she used it last year. I didn't know about it. And it absolutely saved her life. She had a high deductible plan of $15,000, was in a hospital and had this huge bill, well over $15,000. I had educated her on a “GAP” plan, and she enrolled in it.

She even said afterwards, I didn't really know if I wanted it, for an extra $26 a month. Well guess what, a $17,500 check was stroked to her. That's huge. It's called an accident and sickness GAP plan. She was actually able to pay her deductible and pocket $2,500.

Of course, she had other expenses, but I tell you what, I'm the hero in their family. Pennies on the dollar. Pennies on the dollar, and... really, I mean, think about it, to stroke a check for $26 a month, to get $17,500 in a lump sum reimbursement is huge.

Come on! Believe me, she's telling all of her friends as well. And so, if she's listening, Tina, thank you. Thank you, Tom, for bringing that up, because that's a good point that we can use for those of you that are out there, because listen, we don't know what we don't know. And nobody wants to take time to learn insurance.

That's what we're here for. We're here as a resource and help you to provide you information, unbiased information in education so you can make the right decisions. The problem is... You haven't picked up the phone and called us yet. How do they call us, Tom? Pick up that phone and dial 772-210-1020. So, if you have an individual ACA health plan and you have a high deductible of $5000, $9000, or whatever that number is, call us to get more info and a free quote!

Let’s segway to the high deductible Medicare supplement plans. I don't want to spend more than five minutes about Medicare Advantage on this segment of the show. Medicare Advantage plans, Tom, have a maximum amount of pocket.

There's probably about 49% of Americans this year on Medicare Advantage versus 51% or so on Original Medicare with a Medicare Supplement Plan. Medicare Advantage Plans are gaining great momentum this year and we see that particularly happen back in 2008 and 2009 when the economy took a dump then.

And we're seeing that again now with the high inflation and what's going on today in America. So. Even though you may have a low or $0 premium on your MAPD or your Medicare Advantage plan, it doesn't mean that you're not going to have a zero cost. So unfortunately, the TV commercials are misleading.

They give you all this great information that you're going to get this and this and that for free and this is great and that and maybe a give-back and of your social security and blah, blah, blah.  

Yeah. You do have a deductible and you have a maximum out of pocket on some PPO plans that can go up to $10,000. So take $10,000 divided by 12. You're over what, $800 a month? Yeah. So that $0 premium just now cost you $800 a month. I'm just saying. So be informed, ask questions and make sure that you do your due diligence because when you're close to turning 65, you are going to get bombarded.

I mean bombarded by phone calls, emails, mail, you name it, it's going to get crazy. So hang on. But the great thing is you know of an awesome insurance agency that's located in Stuart, Florida. They can be your guide. We're here to support you and help you out. Let's now talk about Medicare supplements.

High Deductible Medicare Supplement plans are for folks who don't have a huge budget or maybe they have plenty of money, and maybe they're making so much money. They're part of the 8% getting charged RMAA. We'll get to that in just a second which is higher premiums paid for your Part B and Part D.

Would it make sense, Tom, to you to talk to those clients about a high-deductible Medicare Supplement plan, or any client for that matter? Absolutely. Gary, one of the unique features and the pros of a Medicare Supplement is that you keep Original Medicare as your insurance. Full straight Medicare is accepted by the majority of providers and hospitals and the best of the best doctors out there, because many of them do not take Medicare Advantage Plans for various reasons, but you keep your Medicare as your insurance.

The supplement will actually help cover the costs that Medicare does not. It's also called a Medigap policy. And with a high deductible Medicare supplement, you have a very low premium compared to a traditional supplement. So I'm just throwing out some numbers. Instead of paying say $200 a month, you might pay $55 a month (for the high-deductible Supplement plan).

Or if you're a little bit older and a male, you might pay $75 a month instead of $250 or even $300 a month. You can have a much lower monthly premium because you're fairly healthy and rarely go to the doctor, and then you just pay whatever co-insurance you would normally pay on Original Medicare.

For example, if you go to see a doctor, you will have a small deductible each year, $226 (for 2023), then pay 20% co-insurance – this is for Part B. And then if you went to the hospital, you would have a higher deductible, which is $1,600. So, with a HDG – “High Deductible G” Plan, you would have nothing else to pay once you reach the $2,700 deductible (or I call it the Maximum Out of Pocket - MOOP).

Now, somebody coming off a Marketplace plan or Obamacare, they already have a $9,100 deductible, or up to a $10,000 MOOP with Medicare Advantage Plan. With the HDG Plan, they now only have a $2,700 deductible or MOOP, and it's not necessarily first dollar out of pocket either. You're only going to pay out of pocket $2,700 with deductibles and co-insurance before Medicare and your supplement pays 100% of everything beyond that.

I think I see some people on the other side, their eyes are glassing over just a little bit. I'm sure they are. I'm going to break it down a little simpler because it is a little complicated to explain. It can be complicated, but you know, we're going to make it simple.

Let's say that you're on a plan G with brand X and that premium is $200 a month for plan G. to keep it simple. I did well in college English, but not math. $200 per month for your plan G times 12 months is how much, Tom? $2400!!!

Boom $2,400!!! So you're paying $2,400 a year for your supplement plan G and you're healthy and you rarely go to the doctor. Now, you could consider the high deductible plan G and it's a misnomer, right? They call it a high deductible, but the government got it wrong here on this one, because it's not really a high deductible.

When you think of high deductibles, we're thinking of $9k or $10k, not $2,700. And that is exactly what the high deductible plan G is for 2023. $2,700. You pay $600 per year for that premium, $50 per month, let's say on average, depending on where you are in the state of Florida. Outside the state of Florida, the high deductible plan costs as little as $30 per month, in many places throughout the country.

For Florida, let's call it $50, that's $600 a year. Now, it doesn't take much of a mathematician to know when you take $600 away from $2,400 (for a Plan G premium), that leaves you with $1,800, okay? So, by going on a high deductible Plan G, you're saving $1,800 a year. Not to mention, Tom, the fact that you're going to have annual increases on that $200 a month Plan G premium.

Every year, probably, depending on the carrier, you could have exponential premium increases. Whereas this one plan that we know of with this one carrier that we know of and that we love, hasn't had a rate increase on the high deductible G plan for many years. In fact, they've had rate decreases because there's not a lot of utilization on the high deductible plan.

Gee, there's skin in the game. Guess what? You save $1,800 a year or more. Now, I like to use this analogy because even then, people say, well $1,800, is not that much savings. So, I like to say, you go to Best Buy, and you buy a nice 65” smart TV set for $2,700, which is representative of the high deductible Plan G premium.

All right? So you're buying a $2700 TV set at Best Buy. You're all excited. You love what it's going to do for you. You go up to the front desk clerk who's checking you out and asks if you’d like to buy a 1-year extended warranty on your $2,700 TV set? And Tom, you say, it depends.

It depends how much does it costs, right? So, it's going to cost you $1,800. That's the premium savings that you're going to have by going with the HDG Plan versus the Plan G from Brand X. So, that clerk tells you, it's going to cost you $1,800 each year to offset a risk of only $2,700 - your new TV!

A 1-year warranty costing you $1,800 for your $2,700 TV set. Would you do it, Tom? I would say I was born at night, but not last night. I don't think so. I hope that I have somewhat clarified just a little bit about how important it is to consider having a high deductible Medicare supplement plan. It’s very inexpensive.

And comprehensive, of course, because like Tom said earlier, you are still with Original Medicare. You have a supplement attached to your Original Medicare. You have no networks to be concerned about. You have no pre-authorizations to be concerned about. You have no claims that are going to get denied to be concerned about. If Medicare approves the claim, the Medigap plan will also cover the claim.

So again, having an Original Medicare with a high deductible Medicare supplement plan makes a lot of sense. And saves a lot of dollars. So, that's something to be thinking about if you have questions. Or need more information on how a high deductible Medicare supplement plan could work for you. All you need to do is pick up the phone and dial 772-210-1020.

You can also go to our website at oweninsurancegroup.com or stop by and visit us. We're just about a half a mile north of the Roosevelt Bridge on US 1, right behind Key West Diner. Now, to be fair... The max amount of pocket can go up. Does it go up every year? Not necessarily. It takes an act of Congress to vote to raise the high deductible plan for the Medicare supplement. If Congress votes to raise the high deductible plan, it can only increase as high as the CPI, which historically has been 2% to 3%. So again, with the high inflation that we see this year, we don't know if Congress will vote to raise that deductible for 2024 and what that will look like, but it could potentially go up, so I just wanted to make sure I put that out there for everybody to understand.

We only have five minutes left. Time flies when we're having fun. All right let’s address IRMAA. Not Hurricane Irma, but IRMAA - the income related monthly adjustment amount for 2023. IRMAA affects about 8% of the population of high-income earners.

For 2023, $164.90 per month is the standard Part B premium, if you're married (filing jointly) and your annual household income is less than $194,000 and for an individual with $97,000 or less annual income. By the way Tom, they go back two years to determine your premium. So, whatever your MAGI - modified adjusted gross income was for 2021, that’s what Social Security is going to base your Part B and Part D premiums on for 2023.

There are 5 additional IRMAA tier levels beyond the standard Premium. And by the way, IRMAA, as I said, does affect premiums for both Part B and Part D. For married couples filing jointly with annual incomes between $194,000 - $246, 000 or a single tax return with $97,000 - $123,000 annual income, what are they going to pay Tom?

The Part B premium would be $230.80 per month. and Part D IRMAA would be $12.20 per month – on top of your Part D premium. And then if you're at the highest income, over $750,000 for a married couple or $500,000 for individual, then you're paying the highest IRMAA of $560.50 per month for your Part B and $76.40 per month for Part D. What if they were working and making a lot of money in 2021, but they've retired and making less money now for 2023?

Doesn't seem fair. There is a form that you can complete, which is SSA-44. It's a change of life form, kind of like an appeal, to try to reduce your IRMAA.

Again, if you have questions, call Owen Insurance Group at 772-210-1020. And listen we've got close to 500 agents across the state of FL, GA, TX, VA and SC. We're licensed in 45 states, and we can help you. We can help. If nothing else, we can be a valuable resource for you. We do not charge for our services. Hopefully you got some great information about high deductible health plans for Medicare supplement, as well as IRMAA and how that could affect you and your pocketbook.