What’s up, simple passive casual listeners. Now, this is I believe, a second of this series of what do you do for your healthcare once you’ve left your W2 job. We’re gonna be sticking to this podcast and some notes as well as some of the medi-share topics that we talked about at simple passive cash flow.com/health for you guys to review in case you’re one of these lucky people who.
Saved a bunch of money, invested in it the right way, ran your taxes the right way, maybe did a little bit infinite banking too, and have found yourself in this fi, financially independent paradigm where now you don’t have to trade time for your money, and your money just keeps growing and growing.
You can spend it and maybe spend time on finding your icky guy, your divine genius, whatever you wanna call it. . But one of the things that keeps holding you guys all back is like, what do I want? I gotta stay at my job because I got a pension. I guess people don’t have a pension these days, so that’s null and void, they pay for my health coverage.
The truth of it is I’ve started to look at it for myself or, and employees. Is it just, it really doesn’t cost too much. Of course, if you’ve got underlying conditions and stuff like that, it’s gonna cost more. It’s really not that much that you guys shouldn’t be able to save and invest and over more than pay for.
I think for a normal family, anywhere from a thousand to couple thousand dollars a month, which seems like a lot, but. If you just put what is that, what is that? 20 grand a year? And if you have a hundred thousand or a couple hundred thousand dollars making 10%, there you go.
The PEP fund would be a great option, especially whether it’s secured in pre-equity positions that pays 12% a year or 1% every single month. And it’s starting to, gonna start to flow out this month. Like that’s how you build your retirement. In small increments, right?
Like it’s this paradigm of, what do I want? Do I wanna go on a $10,000 vacation every year? Then just get 1,000 thousand dollars and just make 10% off of it. And then now your vacation pays for a year and you can have it again and again every single year. And that’s how you think you need to start building your lifestyle that way.
But he, again, here is the show. It’s not too late to sign up for the retreat. Go to simplepassivecashflow.com/2023 retreat if it’s too late. We’ll see you guys next year. Check out the event pages for future retreats at Simple passive cash flow.com/events. Remember, we only let you guys come to one of those events to check us what we’re all about.
If not, the family office people get upset with . Those are inner circle people. If you guys are net worth above a couple million dollars, or are going to invest at least a quarter million dollars of your family’s wealth into syndications and private placements, I think joining the family office group is a no-brainer.
After all, it’s kind of insurance in a way, investing with the wrong per person. And when you invest in real estate, you don’t really have to worry about the counterparty risks that you have with crypto and all these other things that are happening out there. It’s, you’re investing in real hard assets.
All you got to worry about is investing with the wrong, dishonest people. And I think that’s why a lot of people like working with us cuz we’re transparent, they can meet who we are. We’re just not just. Random Facebook ads or they can do their due diligence on our community. For more of that check out simplepassivecashflow.com/club. Get to know myself and the community. And here is the show.
Hey, simple, passive casual flow listeners. Today, we are gonna be talking about Medicare. If you got older parents or are over older, the age of 65, you’re gonna wanna listen to today’s podcast, but make sure you guys sign up for the who do pipeline club simplepassivecashflow.com/club. And join our Facebook group.
It’s a great way to build relationships there and join our mastermind where we talk about a lot of these sorts of personal types of issues. Every situation is different and especially when you start to wonder what mom and dad are gonna do after they turn the age of 65. And unfortunately, a lot of you guys are what I call the sandwich generation.
You gotta take care of the older generation and the younger generation who can’t do their own stuff. Wanna introduce our guest Daniel Roberts. What’s it gonna do now? It’s going great. How are you today? Lean. Good. Good. So we are talking about Medicare and woo. I think a lot of, we’ve been doing this series on healthcare Medi-Share Medi-Share I’ll put all the show notes here and all the questions, what we’re answering here at simple along with the other goodies I’ve learned about healthcare and in other insurance programs, but, just to kick us off why is Medicare so confusing to millions of folks needing it these days? A lot of people don’t think about Medicare until the time they reach their sixties. So all your life you’re either.
Getting insurance from an employer where the HR department picks the plans and tells you here’s choice A and choice B, which one do you want? And the employer pays for some or all of the cost of that insurance, or if you’re self-employed you go on the healthcare.gov website and you purchase the policy.
Those are things that people are pretty used to. Deductibles work and they get a little bit of learning on the job. But when you turn 65 and you join Medicare, it’s a whole new animal. It’s a national health insurance system. You have four parts, 10 supplements, and literally hundreds and hundreds of drug plan and advantage plan options.
And so people have to learn this from the ground up when they’re new to Medicare and often. Really are overwhelmed by all the terminology, because they’ve never had this many choices before. So they’re choosing all these different parts of Medicare and they’re not even sure what that means. And so I think that’s what makes it so confusing and really it’s something that can cause a lot of anxiety, which is why so many people new to Medicare rely on their adult children to help them with these choices. I know you got to go on the computer and like research this stuff, right? That’s the truth figure.
So we’ve been talking about Medi-Share religious medical sharing programs. This is another government entitlement program for those 65 years and older, just to reiterate that for the folks.
Yes. And, we like to Create our own self-directed IRA accounts, self-directed health savings accounts. But if something’s entitled to us, you’re sure gonna optimize the heck out of it. And if you have an HSA account, you’ve been saving up money in that, which is one of my favorite investment vehicles for saving up for your future healthcare retirement expenses.
You can use money in that HSA to pay your Medicare premiums, deductibles, copays, and co-insurance once you turn 65 and get into Medicare too. Those two go together very nicely. Yeah. So if a person turns 65 and orders they’re eligible for these these expenses what exactly does Medicare cover? So Medicare has two main parts part a and part B one is your inpatient hospital coverage and the other is your outpatient medical coverage.
So Medicare will cover just about anything that is medically necessary. All the things that you have come to expect in your regular healthcare preventative exams and vaccines. Things are covered under Medicare and then Medicare also covers doctor’s visits and lab work and surgeries. If you have an MRI that you need to have, if you have cancer and you need chemotherapy.
So any medically necessary treatment is typically covered by Medicare. Some of the things that Medicare doesn’t cover would be elective procedures, cosmetic procedures dental, vision, and hearing are a big one. Those are. Fall outside of Medicare and Medicare also doesn’t cover long term care expenses.
So it doesn’t cover assisted living or nursing home stays, but it does cover all of your medical needs in retirement. So just like you would go to the doctor today under 65 and present your healthcare card, you would do exactly the same thing once you’re 65 and you’d be presenting your Medicare card and what’s like Medicaid.
Cause that’s something different too, right? Yeah. Good point. So Medicaid. Health insurance that is made available for people that have low incomes. So you can qualify for Medicaid at any age. Medicare is for people 65 and older and certain people with disabilities that are younger. So technically you could qualify for both.
And if you did have Medicare and you were also low income and qualified for Medicaid, Medicaid would step in to help pay some of the deductibles and things that Medicare doesn’t cover. And so those two can work together with Medicare primary and Medicaid secondary. So I also caught in there that, Medicare does not pay for assisted living or that kind of end of stage care.
At what point, what happens. Yeah. A lot of people don’t realize that and sometimes it’s too late. So if you’re aware of it early enough, you can purchase things like long-term care insurance. That’s a policy that I’ve gotten from my parents and they pay a premium every month that goes toward their future.
Future eventual needs. For long term care. A lot of people don’t know about that though. And maybe by the time they find out about it, they have health conditions that prevent them from qualifying for long term care insurance. And so then you become in a private pay situation. So you typically will need to spend down the assets that you do have in any type of savings accounts or IRAs.
And then once you’ve spent those assets down to a certain level, you can qualify for Medicaid through the state that will come in and pick. That long term care piece. Now that’s not the best of situations because you may not be able to choose the facility where you go for your long term care. You also have to share a room with another person that you probably won’t know going in.
And so that’s not the best way to do it, but if you don’t have any other funds to pay for it, then Medicaid will step in at that point. Yeah. They’ll have to go and work for like Ben Stiller, and happy they could do something like that. So a lot of our listeners are like the financial hacker types.
Yeah. So what’s the best strategic way of gaming the system here. Are they supposed to spend down their parents’ assets and you know what’s what are the strategies that work here? In terms of long term care, right? Is there, do you have to show low income to get Medicare or is that even a part of it for well, so for Medicare itself you don’t have to have low income.
You just qualify at age 65 and there are premiums that you pay for the insurance. You also have FICA attacks during your working years. That you use to pay for some of those premiums for Medicare, but when it comes to Medicaid and the long term care piece, yes, you are going to, they’re gonna be looking at your tax returns.
They’re gonna look at your bank accounts. And so typically if you plan with an estate planning attorney prior to the need for long term care, then that attorney can help you. Hanging onto those assets in the best and most legal ways so that you can achieve the spend down without probably having to bankrupt everyone involved, but you would need to be getting ahead of that and doing that, as a long term care plan before that is needed.
And I think what we’ll do is we’ll put the, some of the notes for that in our tax section. So we’ll pass a cash flow.com/tax on how to do that. But, let’s get back to the subject, which is Medicare, right? Cuz the Medicaid is, sounds like that’s income or net or assets specific, but Medicare is the one when I’m gaining
that’s the reason why this country is going bankrupt. Cause we, we hate these entitlements. Yes. Both social security and Medicare are a huge drain on the national budget, but of course they’re very necessary programs before they came into existence. We had people, that would work into their eighties trying to maintain healthcare and put food on the table.
And. Social security and Medicare were created. We eliminated a lot of the poverty that existed for people that were over 65. And so they’re very beloved programs for those reasons yet they are dealing with healthcare costs, which inflate on the Medicare side. And so there is concern that, within a few years, the trust funds for these will no longer be solvent.
And then there’s some decisions that we made on a national level. The politicians need to quit kicking the can. We need to deal with the fact that we have baby boomers aging in an alarming rate, and this is gonna. Drains on the cost of the system. And so we’ll either have to raise the eligibility age or change some of the benefits to make sure that as a nation, we can continue to afford them.
I mean that I’m not a politician or anything. I’m just trying to get by here. Yeah. , that’s another topic for so when somebody turns 65, they go into I’m assuming is like a website and is it determined by how much money they have is how much premiums they pay or. Totally based on their health status.
A little of both. So when you turn 65, you’re eligible for Medicare, as long as you have lived continuously in the us for five years. So you can sign up for Medicare parts, a and B. Now 99% of all people that sign up for Medicare at age 65, don’t pay anything for part a, which is their hospital coverage.
And that’s because during their working years. As long as they paid FICA taxes for 10 years during their lifetime, or are married to someone who did, then they can qualify for the part a and there’s no cost to them at all. So if they go in the hospital, they’re not paying a premium to have that hospital coverage.
The part B outpatient coverage though, does have a premium. And for most people, that premium is $135 and 50 cents a month. So not a lot, not a huge amount of money compared to what you might spend on insurance younger than 65. However, if you are one of the 5% of people who are in the higher income bracket, like a lot of your listeners here, you can pay more for part.
If you are earning more than 85,000 as an individual filer or 170,000 as a married or joint filer. And so depending on where you fall in that income bracket, you could pay considerably more. I think the highest levels for people earning over 500,000 as an individual or seven 50 as a married couple, and those people will pay approximately $460 a month for the part.
Yeah. And they can afford it. Don’t worry about them. , I’m sure they love that answer. yeah. But so this is something I’m looking at this Medicare stuff, like back then everybody had, or a lot of people, worked at a company for 10, 20, 30 years plus, and they got healthcare for life. Yes.
So a lot of this Medicare. A lot of people aren’t even using it. Cause you’re just using their ex employers when, if they’re still in business, it used to be that way, but more and more of those companies are no longer offering that kind of retiree coverage. And some of them changed that, midstream.
So people might have worked for many years expecting retiree coverage. And then that was either taken away or reduced. So of a. Number of people today that age into Medicare do not have retiree coverage and have to make their own decisions about Medicare. And they have to be aware that Medicare, even though you’re paying premiums for that coverage, it works similar to other insurance that you’ve had.
When you’re younger, as you use the benefits, you have things that you pay for called cost sharing. So if you go in the hospital, you’re going to have a deductible, Medicare, outpatient coverage only cover. 80% of your outpatient needs. So if you have an outpatient surgery or you need dialysis, you need an MRI, any type of outpatient service, Medicare only covers 80% and you have to pay the other 20%.
So this is considerably different than, 20 years ago, when a lot of our retirees were. Set with retiree coverage for life. A lot of people going into it today don’t have that security. And so they do need to learn ahead of time. What Medicare is all about, what it costs, what it covers, what it doesn’t, and then make a plan for affording that coverage.
Deciding what type of supplemental coverage they may need so that they don’t have to pay that 20% out of pocket and being prepared to go the distance with some decisions that they’re gonna make on their own about this coverage. Yeah. So a lot of my listeners they’re they likely will not have a.
Employee sponsor plan into retirement age. Yeah. And some of what I’m suggesting a lot of ’em do is take a look at a meta share or medical share plan, or even like the government standard. Again, more information at that simple passive cash flow.com/health healthcare. So how do these program like that and Medicare, how do they Close up all the gaps there.
Sure. So when you enroll in Medicare and you set up your original Medicare parts, a and B, you have a couple of choices to how to fill in those gaps. One would be, if you’re still working, your employer coverage can coordinate with Medicare beyond age 65. A lot of people work well past 65 today, especially entrepreneurs do many.
Yeah. Some of them enjoy working. And so they continue to have business ventures past then. And then on the flip side of that, you have some that, work because they have to they don’t have enough put away for retirement. And it’s important then, especially for those individuals who set up Medicare as their primary coverage, when they retire, they have to make a transition over to Medicare as primary.
And now we set up a supplement of some sort and there’s really two main routes. You can go with that. You can purchase a traditional Medicare supplement, which does exactly what it sounds like. It’s going to supplement what Medicare pays and fill in some of those gaps. It’s gonna pay for your deductibles, the copays and co-insurance and cost sharing that you would normally pay out of pocket.
There’s also newer options called Medicare advantage plans. And these plans are where you can get your Medicare. Through a private insurance company, like an HMO or PPO that works very similar to group coverage that you’ve had when you were younger and where a lot of the younger audience really needs to pay attention.
On some of this has to do with the political environment surrounding Medicare and Medicare for all. Sometimes we hear politicians say that maybe we’ll transition into having Medicare advantage plans for all. And we encourage people who are younger to begin being familiar with some of these terms, because although you’ll be making these decisions for your own Medicare, eventually you may also have to vote on these types of things within just a few years.
And so understanding how it works and what you want to expect to get out of the program. When you turn 65 could be important for some of the voting decisions you make in the next few years as. what’s this like Medicare part D thing we keep hearing about in the news. Yeah. So for 50, almost 50 years, people on Medicare had no outpatient drug coverage in 2004, 2005, 2006, early 2006.
We had people spending 10,000 a year on their medications for diabetes because although Medicare paid for drugs in the hospital, it didn’t pay for drugs that you pick up at the pharmacy. Medicare part D was created to solve that problem. Legislation was passed in 2006, we rolled out part D and this is voluntary pharmacy coverage.
So you have a card that you show at the pharmacy. When you go in to pick up your prescription, you’ll pay a copay for that medicine instead of full price, the coverage is voluntary because some people may need it. They might have VA coverage and they get their drugs through the veterans administration.
They might have Indian tribal benefits. They get their medicines there. They may just not take a lot of medications and don’t see the need to enroll in part D. But we do encourage everyone to learn about that coverage because one of the caveats to the program is if you don’t enroll, when you’re first eligible and you don’t have other creditable drug coverage, like da coverage or employer coverage.
When you do enroll later on down the line, they’ll penalize you for enrolling late and you’ll pay more for part D there on out based on that, how long you waited. So although the coverage is voluntary and very necessary, it is something that you wanna pick up. And be aware that if you don’t have that coverage in place, you would be penalized later on for not having it.
And probably the bigger risk is you don’t wanna be caught in the middle of the year and be diagnosed with a serious health condition that requires expensive medications and have no drug coverage and not be able to get into that coverage until the next annual election period in the fall. When you can set up coverage to begin the following January 1st.
So your agency sells like a tag along on top of the Medicare. Can you explain like exactly what gaps does that fill? Yeah, so we sell the Medicare supplement advantage plans and drug plans that supplement Medicare. So if someone were to contact us and they’re 64, they’re getting ready to turn 65, they’re gonna access our website.
They’re gonna learn a lot about Medicare itself. We always encourage them to learn what Medicare their federal go. Benefits provide them first so that they can understand where the holes are. And then that’s where we come in. As a broker, we work with over 30 different insurance carriers and all of the states that we do business, which are 48 states here in the us.
And when we work with these products, someone might come to us and say I want a Medicare supplement. Plan that covers everything. So I don’t have anything out of pocket and I want a drug plan. That’s gonna cover these three medications. Then we run searches using the type of software that we have to find suitable plans that are the most cost effective for them that provide the benefits they’re looking for, that meets their needs and their budget.
And on the drug side, of course covers the medicines that they’re gonna need. So we basically shop among all the choices out there and help them find coverage. And that service is free. It doesn’t cost the consumer, anything we’re paid by the insurance companies, the same way an auto insurance or homeowner’s insurance broker would be.
And you guys have a lot of good information like courses and different web materials. What’s the that’s right? You all, you’re all you guys have for that. Or we can put it up on the show notes. Sure. You can go to boomer benefits.com/webinars, and you can sign up for a webinar that we offer once or twice a month where you can learn all the basics.
You can also just go to our homepage at boomerbenefits.com and on the homepage, there is a. That will let you sign up for a six day email course that delivers an email with a video with yours, truly teaching Medicare every day in your email inbox for six days, that helps you kinda learn the basics. And once you get through either the webinar or the video course, you’re gonna have a pretty good idea of what your federal benefits cover.
A pretty good idea of what some of your choices are on the back end. Now you’re ready for a conversation with one of my team that can help you look at specific plan options in your state and provide quotes and things like. And if you guys I’ll also have all the notes that we have here and some of the other before you get to Medicare options before you get to 65 at simplepassivecashflow.com/healthcare, that’s great.
Check out their Facebook group. And maybe if you guys are dealing with, your parents aging and moving in with you and what you’re gonna do for Medicare, maybe you put a little note on there. Maybe somebody else in our tribe is also doing the same. Of course, that’s personal and you pay for what you get in our free Facebook group, but if you’re always inclined to join our paid mastermind of over 50 people at this point, simplepasscashflow.com/journey to be part of the cool kids club there.
But thanks Danielle for joining us. You bet. Happy to be here, talking about it and wish everybody good luck with selecting your healthcare plan options out there.