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Dear Everyone!
This will be a bit shorter than my previous newsletters (OK, stop all that cheering!) because of two factors. First, today (Dec. 1) is my birthday. I won't tell you how old I am, but if I were a lizard I'd be a belt by now! Actually I don't have a problem with it... I'm 60... and I'm just fine with it. I mean... consider the alternative!
Second reason is that the last month of the year is "crazy-time" for agents who work in the healthcare area because not only do so many companies hold their group open enrollments in December, new companies wanting to get group start looking for it in the fourth quarter.
Add to the mix that Nov. 15 to Dec. 31 is Medicare Annual Enrollment Period for people wanting to move from basic Medicare to Medicare Advantage programs (a good deal for many) as well as those wanting to change their Part-D (drug) carrier. Thus, this is a busy time, as is the first quarter when there is another Medicare enrollment period for people wanting to make certain changes.
Anyway, I want to welcome some nice people I met at the Fair Oaks Christmas in the Village event. It's always fun and this year the weather was terrific... cold, brisk, and holiday-like.
-Al
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| Medicare "D" Stands for "Deception?" |
There are maybe two people out of a hundred who understand how the Part-D (drug) coverage works. Everyone thinks it is different than how it really "is." Follow this and YOU will be way, way, way more informed than most agents... and even most of those who WORK at the SSA!
Part-D has three parts. It looks like this:
|0---> $2510 | big gap |$4050 ---> |
The first part is somewhat easy. You get coverage for the amount that is actually paid for the drugs that you use. This coverage continues until you hit $2510. I want you to keep a mental image of a ledger or column where we add up all the total costs. Let's use a prescription for something that cost $100. Let's say you have a co-pay which is $20. Guess who pays the other $80? Right. The insurance company. So, $20+$80=$100. After that payment, $100 is added to your 'usage' column.
A week later you need a drug that cost $200. You pay $20, company pays $180. We put this amount in the column and now the total is $300. This goes on until you hit $2510. Note that we are adding up NOT what YOU pay... but what the total cost of the item is.
OK, now you are in the 'big gap.' However WHAT YOU DON'T KNOW IS THAT THE ACCOUNTING RULES HAVE CHANGED ON YOU. That's right. You are getting deceived by the system. Why? How?
Your coverage does not get picked up again until you have paid $4050. What do you think that means? No, it does not mean what you and everyone thinks it means. Read it again... and again. Do you see the words "until you have paid." Read it again and emphasize the word Y-O-U.
Up to now how much have YOU paid? In our example by the time you reach the TOTAL paid (you + company) of $2510 you (yourself... alone) might have paid maybe $700. It will vary. But lets use that figure. You are $700 out of pocket and the insurance company is the rest (good deal for you!)
What did I say above? I said that coverage does not begin again until YOU have paid $4050. NO, I DON'T MEAN YOU AND THE INSURANCE COMPANY... I MEAN YOU. Just you. You. No one else.
In this example YOU have paid $700 out of your wallet.
So what has to happen before the policy starts picking up the tab? YOU have to pay $4050 - $700 or $3350.
Everyone thinks it is $4050 - $2510 or $1540. WRONG, WRONG, WRONG.
The $4050 figure is what the government calls the T.R.O.O.P or True Out Of Pocket expense.
You see the difference? In the first stage they count the total paid for the drug. That figure is going to climb rapidly. In the "gap" stage they are only counting what YOU paid... and use that as a starting point (or roll-back) until you hit $4050.
Are there any supplements or plans that will cover you in this gap? Not that I know of.
However, you can take a bit of comfort knowing that around 80% of Medicare Part-D recipients did NOT reach the $2510 level and have to enter the the gap.
Part-D is not a bad deal, but it is not the grand freebie that everyone thinks it is. On some plans you will pay a deductible and after that, a co-pay. No matter what plan you take, if you need a lot of drugs you are going to have to pay over $4000 of your own money. There is no free lunch here.
If you are considering a Part-D plan... either stand-alone or bundled within a Medicare Advantage plan, make sure you get it from an agent who knows the above... and good luck finding one!
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| An "Easy" Life
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I harp on life insurance because unlike the Greatest Generation, the Next-To-Greatest Generation is way under-insured.
I look on life insurance as "family welfare." You've heard all the sob-stories so I won't go into great detail. But think about it. Let's say one of the bread winners assumes room temperature and there is no insurance on them. What happens to their survivors? Do they get to keep their house? Do they have to start drawing down from savings... perhaps funds earmarked to BUY a house or send a child to college or to provide for retirement?
Life insurance is so simple. It is easy to get for most people and its purpose is easy to understand... to provide an INSTANT legacy (insurance-speak for inheritance) for the other family members.
Rates have come down such that it is really cheap protection... assuming you care enough about your family to provide it!
The big trend today is what is called "simple issue" life insurance. Traditionally you have to have a paramed where they take blood and urine and vitals, send them to the lab, obtain medical records, and after six weeks or so you get accepted or rejected.
However a number of companies have come out with plans that don't require med records or a blood/urine sample... and the policies are issued in about six days. They ask a few simple questions (For example "Have you had a heart attack?" They then check the MIB (used to be called the Medical Information Bureau... now just MIB) as well as one of the "script" databases where all prescriptions are logged and if they don't find anything bad about you, you are accepted. (In other words, if you say you are 100% healthy and they hit the drug database and see you take Vitorin, they are going to ask a lot of questions.)
The best company out there doing these plans is Fidelity Life. Yes, the premiums are a bit higher... maybe $20 a month... because the company is taking on more risk since they are not doing paramed or med-rec check. But the extra cost is worth the convenience to most people. It works great for those under 55 who are healthy. The rates are no so terrific after that age... but they are not terrible either.
I can't tell you how many people I meet (most in their early 50s) who tell me "I really need some life insurance just in case something should happen. I wish I had bought it earlier when rates were lower."
If you have a family (or a huge mortgage,) after health and disability, life insurance is about the best peace of mind you can buy... and one of the cheapest.
You can debate all day and all night about term life vs. universal life. They both have their place and a good agent can help you decide. I find that for most people term life with a plan to invest the difference is a better deal than whole/universal life... but again, not for everyone.
One last point. I know it sounds mercenary, but I never heard of a surviving spouse who said they thought their partner had too much life insurance.
Nothing is going to erase the pain of loss, but when an agent delivers a check for a quarter of a million dollars (life benefits are always tax free) and the surviving parent knows they can keep the house and pay tuition... that agent knows that life insurance is a really good thing to have and they don't feel they're doing a disservice trying to get people to be aware of it.
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Well, that's a wrap for this issue. I hope you've found some of the info above useful and interesting. If you have questions about life or health coverage, safe-money annuities, or employer group benefits just give me a call or send email.
Sincerely,
Alan N Canton
InsuranceSolutions123 Agency
InsuranceSolutions123.com
916-962-9296
CA License # 0F31110
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Al Canton, Owner
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I'm Al Canton, owner of the Insurance Solutions Agency.
Everyone promises the best service, etc. So I won't bore you with that message.
Bottom line, I know health insurance, work-supplements, medicare, life, and annuities.
Most importantly, I'm honest. I will not put you in a product just for the money. I've been here 25 years and I've built my business reputation on integrity and honor.
It's that simple.
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