All About Medicare

have and they are here to provide those answers. Again, all I got to just pick up pone gives call six h eight three two one thirteen ten. That's six oh eight three two one thirteen ten. Speaking of learning more about the folks at Coss Financial, their website, it's a fantastic resource. Cossfinancial dot com. That's Coss Klaas Financial dot com. Not only can you learn about Coss Financial their separate divisions, you get to know the team there. You can also sign up for the weekly market Paul's

newsletter that available to you at Cossfinancial dot com. Speak of other things available to you as well, they're telephone number six oh eight four four two five six three seven. Don't forget that first appointment at cost Financial. It is complimentary. It will be free to you again. The telephone number four the office six O eight four four two five six three seven. And joining us this morning are our retirement planning professionals CJ. Closs and Eric Schwartz. CJ. How you doing today?

So we'll get to that in just a moment. But before we get to this week's topic and conversation, as well as your call, let's actually take a look back at last week's program. Of course, the class quiz question a week, we do one each and every week. This week will be no exception. We'll have your chance to win a twenty five dollars gift card to Texas Roadhouse provided by our friends at Coloss Financial. Little tip listen close to the program. Just about every show, the question

and answer comes up during the program. And speaking of taking a look back at last week's claus Quiz question of the Week, Eric, let's get the question and answer there as well.

That's six eight three two one thirteen ten, Get you on the air with Aeric and CJ from Class Financial. And today we're going to be talking about Medicare. And I've got to admit and I hear a lot about Medicare over the years, but the political folks often are talking about it, and of course not quite yet sixty five and haven't paid a ton of attention, what do what do folks need to know? Then, CJ when it comes to Medicare.

large unfunded liability of the US federal government. And certainly, while these conversations are interesting, and we all probably have our own opinions about the US federal government getting involved in providing citizens with healthcare solutions. We are going to avoid that part of the more political political discussion for today. So well, we understand that a lot of people have strong opinions about that. That's not the point of our

discussion today. Instead, we're going to focus the remainder of our show on explaining to how Medicare works and why it's so important for US citizens to understand the program as they approach sixty five. So I don't mean to be disrespectful, but do your best to set your opinion aside, because as it stands today, Medicare is the law of the land, and so you're going to have to deal with it whether you like it, whether you love it, or whether you hate it. Now quick disclaimers, we start

talking about Medicare today. While many of our advisors at Class Financial are insurance licensed, we do not currently sell insurance products to our clients, and therefore, the good news is because many of us are licensed, like I am, I can speak to this from a position of authority and understanding while avoiding the conflict of interest of thinking about selling any of this stuff. Okay, let's get started with some of the basics. You know, beginning with What

is the definition of Medicare? According to medicare dot gov, Medicare is a federal health insurance program in the United States for people sixty five or older. Simple as that, you may be eligible to get Medicare if you have a disability and stage renal disease or als, even if you're not yet sixty five. Some people get Medicare automatically, while others have to actively sign up, and it depends on if you start getting retirement or disability benefits from

Social Security before you turn sixty five. Of course, many people want to know what Social Security has to do with Medicare, and I'll be frank with you, this can be an area of confusion since Medicare typically becomes available at sixty five, while Social Security can be drawn as early as sixty two and as late as seventy or somewhere in between. Those is your full retirement age between

sixty six and sixty seven. So we often run into people saying, O, wait, wait, wait, what are you talking about. What does me signing up for Medicare have to do with Social Security? How to intertwined? And the reality is they're both kind of like government managed programs that have interactions between one another, so that's what we're referencing here. They are different ages, but they have interactions. So let's

talk about those interactions. According to Medicare dot gov, if you apply to start receiving retirement benefits from Social Security at least four months before you turn sixty five, you will automatically get Part A and Part B of Medicare

when you turn sixty five. So hear that again. If you've already signed up to receive your soci Security retirement benefits four months before you turn sixty five, then the good news is it's automatic when you turn sixty five that you're going to get Medicare Part A and Part B. Now, notably, you will still need to make important decisions about how you get your coverage, including adding drug coverage and supplements or what are known as metagap programs that will time

talk about later. But the good news is that if you've started Social Security, then there's an automatic feature unless you opt out, which we're going to talk about that in a moment. We get yeah, go ahead, you'll.

you've depreciated out a bunch of your original purchase. It's called depreciated basis, and then you don't want to necessarily sell that and realize it's called a depreciation recapture plus any capital gain on top of that, because there's a lot of taxes associated, So you do a ten thirty one exchange to a like property. That's what Randy is asking about. What I'd say, Randy is, I don't know. This is not the nuances of does it qualify for a like to like exchange? And I think this has

to be done within like ninety days. There's a time limit on it and there so to answer your question, I don't know you would want to talk to your CPA or accountant to see if it qualifies. But let me pause, Eric, do you have any opinion on this?

the numbers and some of the ages. You know, kind of have that basic understanding as well of what Medicare is and what age people are typically eligible. Let's talk about some kind of a better understanding of some of those core components of Medicare, and it'll put that to.

that affordable health insurance. The other way you can qualify is by being disabled and receiving Social Security Disability insurance payments. And then the final two ways that CJ also mentioned earlier are if you have end stage renal disease or if you have als. So, in addition to the list of kind of how you become eligible for Medicare, you must also generally be a US citizen or a lawfully admitted permanent resident who's lived in the US for at

least five years. And then beyond that, if you ander your spouse have worked and paid Medicare taxes for a certain amount of time, usually ten years, you'll likely qualify for a premium free Medicare Part A, which is which is your hospital insurance?

for the future. Because your question as well, given that I'm self employed, I'm paying you know, quarterly taxes on this, and why would I want to take after tax money and put it into a retirement account and then pull it out later and pay taxes. Am I summarizing that accurately?

refund of your quarterly estimates. Because basically what's happening is they're saying you shouldn't have paid as much tax because say you are. I'm going to use big numbers. I earn one hundred thousand dollars, I put you know, eight thousand dollars into an IRA if I'm paying quarterly estimates based on one hundred thousand. That's actually wrong. I should have paid quarterly estimates based on the ninety two thousands,

so they'll refund me the taxes that were overpaid. Therefore, it's the equivalent of a pre tax contribution retirement account. Now to your original point, you're still going to have to pay taxes in the future when you pull that out, right, So it's not you're not avoiding taxes. You're just pushing out the taxes into the future. And the reason you might do that is because when you're retired and no

longer self employed, your tax bracket might be lower. Now, am I suggesting this, No, I'm just telling you how it works and explaining to you the way that you know you'll actually get a deduction, YadA, YadA. But what my advice would be on what you should do is really more of a nuanced conversation. So I might suggest you talk to an advisor at some point and see if that's even a good.

tach Loss Financial. It will be complementary to you again. Their number six oh eight four four two five six three seven. We're going to continue our conversation with CJ and Eric. We've also still got time if you've got a question, love to have you join us this morning six oh eight three two one thirteen ten. That's six oh eight three two one thirteen ten. We'll continue our conversation with Eric and CJ and take your call next as Money in Motion with Coss Financial continues right here

on thirteen ten. Wiba Boking this morning with our retirement planning professionals CJ. Closs and Eric Schwartz. Of course they come to us from Class Financial. The website Class financial dot com. That's Class k l aa S Financial dot com. Great website or telephone number six oh eight four four two five six three seven. No charge for that initial get to know you appointment at Coss Financial. It will

be complementary to you again. Their number six oh eight four four two, five, six three seven talking this week about Medicare, and as we kind of we're getting we've got some great groundwork late, got some great details as well. Are there any other things we need to know about how Medicare works?

of it. So it's covering inpatient care and hospitals, skilled nursing, facility care, hospice care, and maybe some level of home healthcare. And as we mentioned earlier, this is typically at no cost if you and or your spouse have paid Medicare taxes for at least ten years. So when I say it's no cost, I mean you've paid it.

involves a monthly premium and an annual deductible. So the standard monthly Part B premium for twenty twenty five is one hundred and eighty five dollars, and for folks who are on Social Security, this is generally just deducted from your monthly benefit payments, so a lot of people don't even notice this premium is coming out. You are able to pay it from your checking account or some other method if you are not yet on but Social Security

retirement benefits. Now that one hundred and eighty five dollars monthly premium, depending on what your income is, that can actually be higher, so it's a little bit confusing, but essentially the Medicare is going to look back two years that your income to determine if your monthly premium will be higher than one hundred and eighty five dollars. But

that is the base in twenty twenty five. Now, the annual deductible that I mentioned earlier for Medicare Part B, it's two hundred and fifty seven dollars, which means that you have to pay that amount before Medicare will begin paying its share of covered services. Now, I'm sure folks listening are who are not on Medicare may say, you know, two hundred and fifty seven dollars, that's pretty nice deductible on health insurance. But that is, you know, that is

part of why I mentioned earlier. Folks are generally pretty excited to get to sixty five for the for the health coverage. Lastly, related to Part B, you may have noticed that I mentioned after that two hundred and fifty seven dollars deductible Medicare will begin paying its share of covered services. So Medicare typically pays eighty percent of the approved amount for covered services. So this means that folks who are receiving Medicare are responded for the remaining twenty

percent of those costs. So this twenty percent that's known as coinsurance, and that's why people will often pick up Medicare supplements or a Medicare advantage plan. And we're going to talk about those more here here in a moment, but those are generally what are picking up those those extra costs no Medicare Part D that is your drug coverage, So that's going to help cover the cost of prescription drugs,

including many recommended shots or vaccines. One problem we often see with Medicare Part D is there's a lot of confusion caused by the various names people use when talking about it. So if you may hear Medicare Prescription Drug Benefit, you may hear Medicare RX or just RX plans. You may hear prescription drug plans, or Medicare Advantage prescription drug plans. Essentially, all these terms relate to Medicare programs that help cover

the cost of prescription drugs. So while part D is the standard term, you should not be surprised to hear some of these other terms as well. Now, if you join a Medicare Part D drug plan, you do that in addition to Medicare Parts A and B, or you can get it by joining a Medicare Advantage plan with drug coverage. So plans that offer Medicare drug coverage are run by private insurance companies that follow very strict rules set by Medicare, so they are all standardized plans, but

they are operated by private insurance companies. And finally, as you approach Medicare eligibility age, which for most people's age sixty five. As we mentioned earlier, you want to be careful not to get hit by something known as the

late enrollment penalty related to creditable coverage. Without going into too much detail here, you can essentially end up with a sizable Medicare Part D penalty if after your initial enrollment period you go sixty three or more consecutive days without either Medicare Parts decoverage or corret what's called the creditible Prescription Drug Coverage plan. So watch out for that as you are approaching Medicare.

Coming up. In the next segment, we'll talk a little bit more about Medicare. We'll also do the COSS Quiz question of the week as Money in Motion with Cost Financial continues next right here on thirteen ten, WIB talking with our retirement planning for professional CJ Closs and Eric Schwartz. Of course, they come to us from Class Financial the website colss financial dot com. That's Class K L A A S Financial dot com. They're telling for number six.

Soh eight four, four, two, five, six three seven talking this week about Medicare, and we've covered a lot of great CJ, is there anything else that we should know?

supplements and metagap plans. Well that's what we're going to talk about next. So Medicare supplements also known as metagap, is extra insurance you can buy from a private company that helps pay your share of costs and original Medicare.

For those with a keen ear, you should have already known what is meant by your share since that was reference in eric section about kind of the co insurance, So your share refers to the twenty percent co insurance, which can really add up, especially if you require frequent or expensive medical services. This is the primary reason why most people consider supplemental coverage like Medicare supplements also known as Medicap plans. So just when you hear Medicare supplement

or metagap, those are the same thing. Notably, policies are standardized and in most states named by letters A through N. The most common metagap plan used to be Plan F, but it's no longer available to newly eligible Medicare beneficiaries

on or after January first of twenty twenty. Currently, as of twenty twenty five, the most common metagap or Medicare advantage or Medicare supplement plan offered by private insurance companies are Plans G and Plan N. Plan G is the most popular metigap plan since it offers comprehensive coverage covering most of the gaps in original Medicare. People tend to choose this metagap Part G plan for its extensive coverage

and relatively predictable out of pocket costs. Plan N, which is the second most popular metagap plan, offers a balance between coverage and cost. While it covers many of the same benefits as Plan G, it involves some co payments for certain office and er visits, which typically means the monthly premium for Plan N is lower than for Plan G. Which all of this leads us to the final kind of core component of Medicare for you to be aware of,

which is known as Medicare Part C or Medicare Advantage. Now, I just want to pause. I hope everybody is either taking notes or you say to yourself, I need to go listen to that podcast again, because there's a lot of details here. You're noticing each of these core components has like multiple names, and this is one of the biggest reasons why Medicare is so confusing. It's not because

the planets or the program itself is overly complex. It's because each one of the components has like nine names that people will use for well, I don't really have a fix for you as much as go back and listen to this again. So Medicare Part C, which is also known as Medicare advantage. Here's the concept to understand. When it comes to Medicare Parts C. Americans like choice and therefore, during open enrollment in the fall of every year or upon a qualifying event, you have two main

ways to access Medicare coverage. So this is the whole point of Medicare advantage. Like, what is this thing Medicare advantage. It's basically a secondary choice that takes you off of original Medicare. So option number one is known as original Medicare, which is everything we talked about previously, right, Parts A and B in a meticap plan and a typical Medicare Part D prescription plan. Option two is Medicare Part C,

which is also known as Medicare advantage. This is a Medicare approved plan from a private company that offers an alternative to original Medicare for your health and drug coverage. These are known as bundled plans since they include Part A, Part B, and usually Part D. In many cases, you can only use doctors who are in plans network, So the sounds more like private health insurance, doesn't it. It's like, oh, there's a network now. These plans often have different out

of pocket costs than original Medicare. But these plans also often after other benefits like dental and vision, and they may include separate premiums, but they're usually cheaper than Medicare Medicare supplements. So here's the point of all of this. We are not for or against any structure of this. We actually love the choice. We love that our older clients get to Medicare. We generally love the benefits that Medicare provides, and we love the choice that is available

to you. Unfortunately, there is so much complexity to Medicare and so many different names that are used and ways that these things can go wrong that we have to get quite involved in being watchdogs on behalf of our clients so Eric can attest. We unfortunately spend way too much time in our meetings asking about what do you want, what do you have, what are you paying? Why do you have that?

oh eight four four two five six three seven. Don't forget that first appointment. No charge will be complimentary to you again the telephone number six oh eight four four two five six three seven. Speaking of a telephone number, hold on to it because it's time now for the class quiz question of the week. It works like this. In just a moment, I'll ask you the class quiz

question the week. You will then have thirty minutes from the en today's program to call the Class Financial Office right here in Madison at six oh eight four four two five, six three seven. If you are the first car correct answer when this week's prize, which is a twenty five dollars gift card to Texas Roadhouse. This week's class quiz question the week is this. According to Medicare dot gov. Medicare is a federal health insurance program in

the United States for people what age or older? Multiple choice Here is it sixty two, sixty five or sixty seven? Telephone number six oh eight four four two five six three seven, first go out, correct ancel when this week's prize. Don't forget as well. That's Class Financials Office here in Madison. No charge for that initial gets to know your appointment Techlass Financial their number six oh eight four four two five six three seven. CJ Eric. It's always great chatting

with you. We'll do it all again in a week.