Episode 49: How To Get the Most Out of Medicare, with Patricia Barry

Good afternoon everyone, my name is Lynn S. Evans, and I am the host of Power Of The Purse podcast. There was a time in my life not too long ago, when I believed three things about money. One, women are not supposed to talk about, or be included in any conversations about money. Two, women don’t have the natural ability to understand anything about money. And three, men know best how to manage money. And those truths I made up about money guided me for years, until I realized, money was not a foreign language or some other obscure academic exercise and, it was something I could not only understand, but teach to other women.

Too many times I’ve heard stories from women who ought to know better but didn’t, until they were forced to because of divorce, widowhood, job loss, or the approach of retirement. This podcast will add another chapter to an ongoing informative conversation about financial topics women should be more knowledgeable about. My mission is to help women have a healthy, positive relationship with money.

With that in mind, my guest today is Patricia Barry. She is a journalist who is a sought-after expert on Medicare. She is the author of Medicare for Dummies, the third edition of which will be published in early October. Her formal education started with a degree in history and she was trained as a journalist for three years in Sheffield, England. She’s done many different columns and writings throughout much of England in smaller, regional newspapers and ended up working as an investigative reporter for The Sunday Times in London on topics relative to the laws affecting women. She then came to this country with her husband and children, and was working with AARP for 18 years, writing about Medicare. She continues now as a resource for people who have questions about Medicare and she’s answered over 14,000 of them. Welcome, Patricia.

Thank you Lynn, it’s good of you to have me.

Let’s just jump right in. Let’s talk about all of the things that we want to know about Medicare. This is such an incredibly big topic. I hope we can get all this in, but I think what we want to do is talk about some of the highlights, some of the most common themes you’ve noticed and the questions that people have asked. Let’s start with the first most obvious one: why is it so hard to understand Medicare?

Well, people who find it confusing shouldn’t be ashamed or anything. Everybody’s baffled by Medicare, I call it equal opportunity confusion. It affects people who’ve got triple degrees and people who tell me that their law degree, they thought, was the hardest thing they ever did until they came to sign up for Medicare.

Everybody's baffled by Medicare...it's equal opportunity confusion. Click To Tweet

Why is it so confusing? Well, there are three real reasons. One of them is that Medicare has different rules for different people in different circumstances. So, if you’re following somebody else you might be getting it wrong. The second reason is that Medicare has a lot of choices. It offers a lot of choices and you have to make decisions between those choices. Thirdly, there’s an enormous amount of misinformation about Medicare. People tend to turn to their friends, their families, their doctors, their HR departments and they get an enormous amount of information that’s wrong from those people. I regret to say that sometimes even Social Security officials and Medicare officials who are supposed to help people enroll and answer their questions, sometimes also give them misleading information. That’s why Medicare is confusing. I’m here to try and help point out what you should do in certain circumstances.

Medicare has different rules for different people in different circumstances. Click To Tweet

Well thankfully, you’ve written that third edition book, Medicare for Dummies, because I think most of us would consider ourselves dummies in that regard. I know when I went through the process last year, I felt the same way. I was just overwhelmed by the amount of information and what seemed to be the complexity of the choices that we have. That’s another question I think people have pondered. Why are there so many choices? Why do we go from A down to, what is it, N? With the number of different choices…

A, B, C and D basically.

Okay. Why do we need to have all that?

Well, Medicare started in 1966, having been passed into law in 1965. It was quite a simple program in those days. You had what we now call traditional Medicare and usually people were 65, they signed up for it, they signed up for Social Security at the same time. It was all fairly straightforward. But since then, and not only have a lot of different coverages been added to Medicare, but also, they brought in new ways of receiving Medicare benefits. That’s a program called Medicare Advantage. It has gone by various names over the years, but now it’s Medicare Advantage. These are mainly HMO plans, PPO plans, the kind people are probably familiar with if they’ve had insurance through their employers. Also, Part D prescription drug coverage…this didn’t come in…there was no prescription drug coverage with Medicare until 2006, forty years after Medicare had started. That’s a very complicated program, too.

Again, it’s private plans that you have to choose between. Mostly there are at least 20 or 22 plans to choose between and they all have different costs and benefits. I will, later on I think, Lynn, if that’s all right with you, come back to how you choose among those options.

Sure.

I’d like first to talk about enrolling in Medicare because this is what confuses people probably more than anything.

Mm-hmm.

The fact is that there are traps, that if you don’t get it right, you can be penalized financially for the rest of your time in Medicare, that is, the rest of your life. The question that people ask me more than anything and probably is of most interest to your listeners is, ‘I’m continuing to work after 65, should I sign up for Medicare? If I don’t, will I be penalized?’ This is a very important question. If you have got employer insurance, either from your own employer, active employer, or your spouse’s active employer, then you can delay Medicare enrollment until you retire or until you want to sign up. You get a special enrollment period to do that so that you don’t get any financial penalties. If you haven’t got that kind of insurance, and you’re on the basis that you’re actively working for the employer who gives it to you, then you need to sign up when you’re 65 in your initial enrollment period. That runs for seven months, of which the fourth month is usually the one in which you turn 65. These are very specific times when you can sign up.

The consequences of not enrolling at the right time for you, either during your initial enrollment period or during a special enrollment period, are quite steep. You can get late penalties, which are added to your premiums for all future years. But also, you can sign up only during a general enrollment period, which runs from January 1st to March 31st every year and your coverage will not begin until July 1st.

Wow.

There are big consequences in not getting it right. Quite a lot of people fall into a trap where they’re working, they’re perhaps 68, 70, and they decide to retire and their employer offers them Cobra, which is an extension of their employer insurance coverage. Very often, the employer does not tell them that this doesn’t count, as far as Medicare’s concerned, as proper insurance coverage. If you’re offered Cobra for 11 months and you take it, and by that time your special enrollment period has run out, but you go along to sign up and they say, ‘Oh sorry, you can’t,’ you’ll have to sign up in a general enrollment period because coverage doesn’t count.

And nor do retiree benefits. if you have retiree benefits as well, either you sign up within your initial enrollment period when you’re 65 or when you have the special enrollment period when you retire, or when your spouse retires. You really must sign up then because if you don’t then when you eventually want to, then you will face these consequences that I’ve just talked about.

Can we go back…

It’s a really important decision to make at the time of which you’re 65, or at the time of which you retire or your spouse retires from a job that gives you insurance coverage.

Can we back to that thing you mentioned about the initial enrollment period?

Yeah.

…which starts three months before your 65th birthday?

Yes, I’ll explain more on that if you’d like.

I would.

Yeah, it’s a seven-month period. The first three months, if you sign up during that time, then your coverage starts on the first day of the fourth month, which is usually the one in which you turn 65. If you sign up later than that, you still get a delay in coverage a bit. It could be anywhere from one to three months, depending on when you sign up. Let me go back one second too, because there is a different kind of enrollment and that’s automatic enrollment. That happens if you’re already receiving Social Security benefits at the time you apply for Medicare. Then you are…at the time you’re 65, I’m sorry. Then you will automatically be enrolled by Social Security. But if you’re not receiving those benefits, either retirement benefits or disability benefits, then you would need to actively apply. The enrollment periods I’m talking about are the ones in which you would actively have to apply. Most people these days, I think, you can start taking Social Security at 62, but you don’t get as many benefits as you would if you enrolled later. You can enroll right up to age 70 and every year you get much more money in your retirement benefits the longer you leave it, but only until 70. After that it stabilizes.

Okay. Let’s use an example.

Say your 65th birthday is in June. Your initial enrollment period would begin March 1st, and it would go right through to September the 30th.

Okay.

If you’re going to sign up during this period, then it’s best to do so in those first three months because then your coverage starts immediately. There is one exception here, there’s always exceptions in Medicare.

Mm-hmm.

That is, if your 65th birthday happens to fall on the first day of the month. In that case, the whole initial enrollment period would come forward a month. That example I gave before, if you turn 65 on June 1st, then your enrollment period would begin February 1st and go through to August 31st.

Okay, you get a bonus month.

It’s just a little bit of a twist on that.

Yeah.

Otherwise, the enrollment period is fairly straightforward and you would call Social Security or go online to SocialSecurity.gov where you can, if you’re signing up at 65, you can usually sign up for Medicare online. Otherwise, you call Social Security, which is 1-800-772-1213 and then you can enroll right on the phone or at a local Social Security office. In certain circumstances you should do it at your Social Security office, if you’re foreign-born for example. If you need to produce green cards, or foreign birth and marriage certificates, which you can’t really replace very easily, then you should take them down to the Social Security office.

Also, if you’re signing up in a special enrollment period when you delay because you’ve been working or your spouse has been working, then you need to get a form signed by your employer and previous employers saying that you have received health insurance from active work, current employment since you turned 65.

These are the sort of basic things you have to go through, but the important thing is to enroll at the right time for you.

Who tells us when it’s time to do that?

While I’m on the subject, may I say that anyone who’s in a same-sex marriage these days, they have the same rights totally as enrollment, as people who are in opposite-sex marriages. It’s important for people to know that. However, if you’re in a domestic partnership, then that’s a little bit more complicated.

Same-sex marriage offer the same rights for Medicare enrollment as opposite-sex marriages. Click To Tweet

Who tells us when it’s time to enroll? Most people know that when they turn 65 they have to apply for Medicare, but they may be under the false impression that since they are working full-time and covered under an employee benefit package, they don’t need to do this, they don’t need to do any enrollment.

They don’t need to sign up at 65 if they’re having this insurance from an employer, their own or their spouse’s, if they don’t want to.

Well, the thing is, who tells you that this is something you don’t have to worry about?

That’s really important. Nobody tells you.

Yeah, exactly.

Unless you’re already receiving Social Security benefits.

Right.

Then you get a letter from Social Security with your Medicare card about three months before your 65th birthday. Nobody tells you. In fact, the Medicare Rights Center and various other consumer organizations have been trying for a long time to bring in laws that would require a government agency, either Medicare or Social Security, to inform everybody when they become 65 of their rights and information on when they should enroll or when they should delay enrollment. That was legislation that was introduced in the last Congress, last year. But, of course, it died with the end of that Congress. It wasn’t passed and it still hasn’t been passed. I’m afraid that until that act is passed, if it ever is, then we’re on our own and we have to know about these things without being told.

Yeah. Then I think about recently, it was something in my world as a financial advisor, where the penalties were extremely high if you didn’t take a required minimum distribution from your qualified plans like your IRAs and 401ks. If you didn’t take it, the penalty was 50 percent of the amount you should have taken.

Yeah.

Very steep penalty. But then, what happened was, all of the institutions that have custody of these funds were then required to let people know that they had a certain date and time by which they had to withdraw the funds, or these are the penalties. I just think it’s ridiculous that if the federal government is the one that issues our Social Security numbers, they know when we were born, why can they not let us know? Everybody should know that at certain dates and times, you need to either enroll in Medicare, or let somebody know that you have an option to continue with your employer’s benefits or your spouse’s.

Yeah, I agree with you but we’re not there yet, I’m afraid.

Wow.

Therefore, people do fall into extraordinary traps.

Wow, that’s just amazing.

…for the rest of their lives sometimes. It’s really not fair, but I’m afraid that’s the way the system works.

Well, the federal government never said it was going to be fair. We know that.

You know, it means also… I mean, I have some sympathy particularly with Social Security officials who don’t get the funding to give sufficient information to everybody. Even when people call, the fact is that people are turning 65 at a rate of 10,000 a day at the moment.

People are turning 65 at a rate of 10,000 a day at the moment. Click To Tweet

Yeah.

But, Social Security hasn’t had its funds bumped up in consequence. When I hear, as I frequently do, that somebody’s been given wrong information by a Social Security official, I think it’s a great pity, but the fact is that there’s an enormous amount that they have to know, even to be trained in everything. I’ve been working on this for 18 years, and I still find things that I don’t know.

Mm-hmm.

You know, I do have some sympathy with them.

Let’s go back…

It does mean that consumers have to be on the mark about this and that’s what I try to do all the time, to tell them what they should be doing.

Well, thankfully you’re there so people can call you and ask these questions. We’ll talk about that in a minute but I want to go back to something that you said earlier, Patricia. You talked about traditional Medicare versus Medicare Advantage plans.

Yeah.

Can you tell us what is the difference between the two?

Well, the main difference is that in the traditional program, which is also called original Medicare, it’s a fee-for-service system. What that means is that the government pays for a contribution towards every Medicare-covered service that you receive and you can go to any doctor, any provider, any hospital, that accepts Medicare patients anywhere in the United States. You don’t have to go through any kind of gatekeepers or anything like that.

Mm-hmm.

In Medicare Advantage, it’s different. These are, you know, in the HMO system, the health maintenance organizations, which I think a lot of us are familiar with. Usually you have to stay within the provider network and the geographical limitations, the service area of the plan you’re enrolled in. With PPOs (that’s preferred provider organizations), they also have limited geographical service areas and network providers, but if you want to go outside then you can, but you pay a higher copay. That’s broadly the main differences between them.

Traditional Medicare consists of Part A and Part B. Part A is mainly coverage for hospital stays, home health services, hospice care. Part B covers all doctor services including those in the hospital, outpatient care and medical equipment. Whether you’re enrolled in traditional Medicare or Medicare Advantage, you get those benefits. You get Part A and Part B benefits. If you need to add prescription drug coverage, if you’re in the traditional program then you have to join what’s called a standalone drug plan under Part D that just provides drug coverage. You pay an extra premium for that. In Medicare Advantage, most Medicare Advantage plans include Part D coverage in their basic benefits package for no extra cost. Some Medicare Advantage plans charge their own premiums in addition to the Part B premium that people pay and in some areas where there’s large competition sometimes they don’t charge their own.

These are the main things. The fact is that in some cases Medicare Advantage plans can offer lower costs, lower copays. Not always, they were supposed to. Also, they have the option of providing more services than Medicare covers. For example, there’s big glaring gaps in Medicare. Traditional Medicare coverage is coverage for routine vision care, dental care and hearing care. If you have something really problematic with your eyes or your ears or your jaw, yes, you get coverage then. But for routine things like hearing aids, checkups, dentures, those kinds of things, then you don’t get coverage in traditional Medicare. Some Medicare Advantage plans do give coverage for those things to a degree.

Okay.

You may get a few more benefits in Medicare Advantage than you do in the traditional program.

Did you say… I want to be clear on this. Did you say that the Medicare Advantage plans are usually private plans or insurance companies?

They’re all private.

Okay.

They’re all run by private insurance companies.

Mm-hmm.

You know, all the big names you can think of and some more.

But Medicare is run by the federal government?

It certainly is, but the fact is that every provider you go to is private.

Yeah.

They’re all private doctors, they’re all private hospitals in this country.

Mm-hmm.

You know, it is a government-run program but also the government overlooks Medicare Advantage plans. They have to conform to certain rules.

Okay.

They’re not completely off on their own, but yes, they are private.

Let’s talk about Part D for a minute, the drug coverage. That is not a requirement, correct?

Well, I should have said that nothing in Medicare is a requirement. Nobody forces you to sign up for anything.

But if you don’t, you have penalties.

Yeah, yeah. That’s a quid pro quo. There are good reasons for these things even if they sound terribly unfair. The reason there are penalties in delayed coverage is because Medicare wants you to sign up as soon as you can, as soon as you’re able to. Medicare covers employers’ standard insurance principles. That is that you need, in health anyway, you need younger and healthier people in the system so that it can function.

Mm-hmm.

If everybody was allowed to sign up when they wanted medical care, the system couldn’t function. Or, if it did, it would be so expensive that hardly anybody could afford it.

Yes.

That’s the point. Mass coverage is the point. You need to have people who are younger and healthier in there to fill contributing premiums, even if they don’t have any healthcare. It’s the same way as auto insurance or homeowner’s insurance, you know we buy it…

Or life insurance.

…because if we total our car, or our house burns down or something, we’re covered against those probabilities. Not even probabilities, possibilities. It’s the same with Medicare. You can’t just go along when you need it. Although, people very often realize that Part D in particular, the drug benefit, you don’t have to join it, it’s optional. And there are penalties later on. I get a lot of mail from people who say, ‘I’m Medicare, but I don’t take any drugs, why on earth would I pay a premium every month to get that coverage?’

Right.

This is what I tell them. Well, you do it for homeowner’s or renter’s insurance or auto insurance and it’s the same thing and it’s for the same reasons.

Because if you need it, then you have it. Is that the premise?

Yeah, but you know people don’t quite often. And I’ve had rather heartbreaking cases from people who’ve written to say they didn’t join Part D because they were fine, they were healthy, and then they were struck by some horrible disease, like cancer, out of the blue, needed really expensive drugs and couldn’t afford it because this had happened to them in, say, March and they weren’t able to sign up until open enrollment at the end of the year with coverage starting in January.

Yeah.

They say, what can I do? And I said, you can’t do anything, I’m afraid. This is very important. When people write, and indeed in the book, when people say, ‘Why should I need this coverage?’ Well that’s the reason you need it, because you never know. You haven’t got a crystal ball. You don’t know what’s coming down the pike in terms of your health or not. Just even genetic diseases that you wouldn’t suspect. Or an injury that you have that you didn’t foresee of course. None of us foresees these things, but that’s why you have insurance and Medicare isn’t any different.

I should get back to say one thing about the original program, the traditional program. That is that, as I’ve said already, if you’re in this program then you would need to add prescription drug coverage under Part D by joining a Part D plan. Also, you have the option there to join what’s called a Medigap, to buy Medigap insurance. This is supplemental insurance. In traditional Medicare under Part B, that’s doctor services and outpatient care and medical equipment, your copay is 20 percent of the cost, which can be quite high. You can avoid that by buying extra insurance, another premium, which is called Medigap insurance. There are 10 different Medigap plans, each with a different set of benefits. Again, these are supplied by private insurance companies and you can choose which one you like and then you’re covered. If you have reasonable Medigap insurance as well as Medicare, then you’re basically not paying anything, hardly, for your coverage, depending on which Medigap policy you buy, of course. On the whole you can avoid those costs.

Now in Medicare Advantage, you can’t have Medigap as well. You will have out-of-pocket costs, but they can’t be covered by insurance. The copays may be lower in Medicare Advantage plans but you still have copays.

Do you think that Medicare is ever going to run out of funds?

No, it doesn’t have to. Every year the trustees’ report comes out for Medicare and every year it says that it’s going to run out of funds in sort of 10 years or 5 years or 20 years. It varies tremendously every year because the projections are always different. It hasn’t so far, although it’s been projected to have run out by now. Let me just say that “running out” is a sort of misnomer. When they say that Medicare Part A can fulfill its obligations until let’s say… I don’t know what it is at the moment, I can’t remember, but let’s say it’s 2030. Then what that means is that in the year 2030, it will not be able to completely cover the benefits that it does now, but that doesn’t mean that people are not going to get any coverage at all.

There may be some part of it that may be covered?

Eventually the government always has the possibility to change that so that people could… At the moment, payroll taxes pay for Part A benefits basically. They pay for premiums rather, not for benefits. If you’ve paid in at least 40, you’ve earned 40 work credits, that’s about 10 years of work, then you will be able to get Part A benefits, hospital benefits, without paying premiums for them. Part B you don’t need work credits, you pay premiums. Part D you don’t need work credits, you pay premiums. The way that it’s structured is the government can’t run out of Part B funds because basically unless they totally change the structure, at the moment, all the premiums we pay for Part B, which is currently for most people $134 dollars a month or more if your income is higher… Our premiums count for 25 percent of the cost of the program, and the federal government pays the other 75 percent as a subsidy for us. Part B can’t run out because they’d just put up the premiums to cover the expected shortfall. With Part A, they could always increase the payroll tax if they wanted to. These are political issues now of course.

Yeah.

You know, who knows what’s going to happen. There’s all sorts of you know, proposals and Speaker of the House and other people who want to basically make Medicare into a totally private system for people who are… Well, if they do that then it wouldn’t affect people who are 55 and older at the time the law changes. It would affect people overall in the end, because although those people can stay in traditional Medicare then, their premiums are likely to go up because fewer and fewer people were in the system.

This is all a political tradeoff. I think that you know, that’s something that’s sort of out of our hands. What I try to do is to help people understand Medicare as it is now under current law. As laws change, of course, I change what I write.

Patricia, if someone was approaching age 65 and knew that they were in that initial enrollment period or it’s coming up, where would you suggest that they go to try to get some impartial advice on what types of plans they should consider?

Well, there’s a wonderful system actually called the State Health Insurance Assistance Programs. They’re called SHIPs for short. These are staffed mainly by volunteers who have been trained in Medicare and Medicaid questions. If you go to them, you can talk to a counselor personally and they can give you personal help to guide you through the process, reviewing your options in Medicare. If you decide you want to have your Part D plan, they can work out which is the best kind of plan that meets your needs and your preferences, and the same with Medicare Advantage plans. And they are extremely good.

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The problem always is that when you turn 65, even afterwards, you are inundated with mailings from all these private insurance companies…

Oh yeah.

…Medicare Advantage plans, and Part D plans. And you have no way of knowing which of those plans is best for you.

Let me just take Part D, the drug plan.

Okay.

You want a standalone drug plan. People choose those plans for all sorts of bad reasons. They join a particular plan because their spouse is in that plan, or their best friend is in that plan. Or they join a plan because they know the name of the insurance company, or their doctor has suggested it. The thing is that when you’re wanting to have a Part D plan, which just gives prescription drugs, the only good way of finding the best plan for you is to select it according to the drugs that you currently take.

The Medicare website, Medicare.gov, has a plan finder program on it. You can go in and you can plug in your zip code first of all, and the specific names of the drugs you take plus their dosages, how often you take them, and the program will do the math for you and work out which plan or plans in your area will give you the best deal, will cover your drugs at the least out-of-pocket cost. When I say least out-of-pocket cost, I’m including their premiums and copays and the coverage gap and all of that, that’s in the Part D structure. This can be arduous for some people. They’re the ones who should go to the SHIPs because the SHIPs can also do that. They’re very experienced with looking up these plans and finding out which is best for you. I’ll give you a reason for doing that because it seems arduous. My God, do we have to do this every year? Well, ideally yes.

Yeah.

The reason is, every year for the last several years I have done an analysis of Part D plans for the following year. This has always been published in November. What I’ve done is to take certain drugs, a collection, four or five drugs and I’ve looked at various states, because Part D plans are all operated in different states. As I found, that for the same drug in the same state, you can pay a difference of between maybe $20 dollars a month to $500 dollars a month for a 30-day supply of the same drug.

Wow.

Now this doesn’t happen always, but it does a lot, and it’s happening increasingly because with drugs, particularly drugs that are expensive and some drugs are very, very expensive these days. The plans will charge you not a flat dollar copay like they used to, although some still do. Some plans will charge you a percentage of the cost.  So you know, if you’ve got a drug that costs $3,000 dollars a month, which isn’t actually terribly expensive these days compared to some of them. When I say costs, that’s what it costs the plan to buy from the manufacturers. They charge you a 50 percent copay, you know, you’re paying $1,500 dollars a month.

Yeah.

Whereas, another plan which doesn’t charge you 50 percent or 30 percent or 40 percent or what have you, but charges you a 90-dollar-a-month copay, you can see the difference.

Yep.

It’s huge. The first time I found this I was quite amazed by it. I thought, I can’t be right but I checked it and I was. I did it every year and I found the same thing every year.

Where is this publication that you talk about doing in November? Where can people find that?

I used to do it for the AARP bulletin, but I don’t work for AARP anymore, I’ve retired.

Okay.

I don’t know if anyone’s doing that now.

Okay.

The one prompt this year was published last November.

Okay. That’s too bad. You should do this personally.

Well, I mean, in the book I…

People would pay for it!

…often when I’m writing to people because they’re asking about Part D, I always say that you should really ideally do this because it really can make a huge amount of difference in the cost.

Oh, yeah.

Now, if you’re only taking a few generic drugs or something then you’re not going to be in that position. But even so, one of the drugs I looked at was generic Lipitor in fact. It was cholesterol, which so many millions of people take. In one particular state there would be a variation of between zero copay to $20 dollars copay. Well, that doesn’t sound like a lot in the whole scheme of things, but actually why would you pay 20 if you can get away with zero?

Well then what were the premiums?

Well, then there’s the premiums of course. These are just the copays.

Yeah. That’s what I found when I was going through all this stuff. There were some for the medications that I take that was a huge discrepancy between one Part D plan and another. Then I looked also at the premiums and saw well, when you factor that in they all kind of come out to be the same. Now maybe I’m wrong on some of those kind of drugs…

No they don’t, no way.

…but it was a big difference.

Yeah.

I mean it wasn’t a big difference.

Yeah, yeah. It really depends. Not everyone’s going to find a huge variation but they don’t know unless they do the math.

Right.

Unless they compare plans carefully, according to the drugs they take. That’s the point.

I think the other question I…

You choose a plan and you don’t have to stay with it forever.

Right.

Every year, you can review the plan again according to the drugs you take. Perhaps you take different ones next year to what you took this year, or more, or fewer.

When is that time period that you can make the choice of the Part D?

Yeah. It’s open enrollment it’s called. This is for people who are already in the Medicare program. What happens is that in September, the plan is required by law to send you what is called an annual notice of change. In this letter they send, they have to tell you what’s going to change for next year, for the next calendar year, it’ll change as of January the 1st. Whether their premiums are going up, staying the same, going down (occasionally that happens)… What the copays are doing, whether they’re giving extra coverage for this, that, and the other or not. This is what they have to say. You can use that information during open enrollment to go and compare that plan with what else is available to you for next year. It is possible that you just want to stay with the plan. It’s easier. If you stay with your plan, you don’t have to do anything. Your coverage just rolls around.

However, always in January I get lots of emails saying I don’t understand this. You know, I was paying so much for my drugs a few weeks ago and now I’ve gone and it’s quadrupled. I said, well you should have looked at that letter because that would have told you.

Does that letter itemize each of the drugs and tell you what the costs are?

You will have that surprise on January the 1st if you don’t do this research. I know that it’s a bore, I really do, but it pays off, if you can do it.

Does that letter tell you exactly what drugs you’re taking and what that increase would be, or is it generic?

You know, I don’t know whether it does. That’s a very good question I don’t know. I haven’t been… I’ve only just joined Part D so I haven’t seen this myself yet. They are required to give you certain information. I think what they would do is simply to… You see, how drugs are priced for copays, individuals plans place them in their pricing tiers so it’ll be tier 1, tier 2, tier 3, tier 4. They all have different copays and/or percentages of the cost. What they will likely do is to send what those tiers are going to be, next year. They could be very different from this year. They will also, or should, send you a list of the drugs that they cover with information on which tiers those drugs are in so you can work out what it’s going to cost you.

All right.

Thanks to my guest Patricia Barry who is truly, as we’ve discovered, an expert on Medicare, and to all of you in my Power Of The Purse community. I hope today’s podcast was helpful in enriching your understanding of money and how it can help you achieve your goals. If you’d like to spend 15 minutes on a call with me and ask me questions about your personal finances, please go to my website powerofthepursepodcast.com, select the “Contact” tab, and find a time that works for you. Thanks again, Patricia Barry, for sharing your time and knowledge and let everybody know how they can reach you.

Yes. I have an email address that is specially so that I can personally answer questions on Medicare that are sent to me by consumers. That address is… I’m going to say it but then I’ll explain what it is. It’s yourmqs@gmail.com, that’s short for your Medicare questions at gmail.com. It’s yourmqs@gmail.com. And I’ll try my best to answer any questions you have.

Thank you very much and until the next time, thanks for listening and remember money is not the enemy, your ignorance of it is. Thanks for listening. Goodbye.

How to contact Patricia:

• Email: yourmqs@gmail.com

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