Medicare Explained Simply
KRIS FLAMMANG
Hilarie, you have kind of an interesting history on how you got to be where you are today. Take us through that.
HILARIE SEHORN
My degree is actually in audiology. I worked clinically for about 15 years, and then as life would have it, things changed. When my husband was doing post-doctorate work, his boss wanted me to help manage the research lab, which deals with cancer, DNA repair, leukemia and lymphoma. I took it as a challenge, and did it for a while at Clemson, and really enjoyed it, but I found that I really missed the clinical interaction I had with people, being an advocate and helping them in that regard. However, I needed something with a little more flexibility than you get in an audiological or other medical profession, which can be 24/7.
Then a friend said they needed some help at their insurance company and asked if I would consider that. I decided that since I had worked on the other side of the medical field, where you're dealing with the billing and the CPT codes and all that kind of guck that goes into insurance, that might be an insight I could bring in and maybe help educate and advocate for the people I see here. I’ve now been doing this since 2017 and it's been really fulfilling.
KRIS FLAMMANG
You definitely took a roundabout path, and I love your use of the word guck. So, knowing what you know now, if you could go back a few years and give some advice to your younger self when you got started in 2017, what might that be?
HILARIE SEHORN
The most important thing is education. I just dove in with both feet, and I would encourage anybody who's starting off in this arena to do the same thing, not be afraid to get down to the nitty gritty. Everybody has to pass an exam by the state and a federal exam, if you're doing Affordable Care Act stuff. But I like to go a little beyond that and find out all of the reasons why the system is the way it is, because especially with Medicare, things have changed in the last few years.
KRIS FLAMMANG
They certainly have, and that is a good segue into my next question. I’m hoping you can demystify this for everybody. Can you explain, in simple terms, what Medicare Part A and Part B are?
HILARIE SEHORN
Traditional Medicare, or original Medicare as it's often called, has two parts. Part A is your hospital stays and skilled nursing facility coverage. Part B is doctor visits, medical testing, and certain types of drugs, such as chemotherapy drugs. Those are the two parts of traditional standard Medicare.
Usually, people enroll into Medicare at age 65. However, if you have a chronic condition, such as end stage kidney disease, or some other disabling condition and you're on disability for two years, then you automatically become eligible for Medicare. So, there are cases where people become eligible for Medicare much prior to 65.
KRIS FLAMMANG
Talk a little about the cost.
HILARIE SEHORN
Most people get Part A at no cost. They’ve earned it through working and paying Medicare taxes. With Part B, there is a monthly premium.
With Part A, there's a deductible anytime you go into the hospital for the first four days, and there are deductibles that stagger depending how long you're in the hospital. There’s also a deductible for Part B, and there’s a 20% copay or coinsurance.
In addition, Medicare determines the benefit period differently than it is for standard health insurance. With standard health insurance, for anyone under 65, for the most part you have an annual deductible. Say that's $2,000. Once you hit that deductible, your coverage will change. However, with original Medicare it's per benefit period. That would mean, for example with the hospital, if you're in the hospital for four days, currently (in 2021) that deductible is $1,484. If you go back into the hospital six months from now, that's a new benefit period. So, if you're someone who is in the hospital often, or you have a lot of doctor's bills, or you have an unforeseen illness, all those copays and deductibles can really stack up. The supplements, or Medigap as they're sometimes called, are designed to fill in some of those holes or gaps and take care of either part of, or the majority of, those out-of-pocket co-pays and co-insurance.
KRIS FLAMMANG
Like most things with the government, it’s not easy. It has to be complicated. How many supplementals are there? It’s like an alphabet soup, isn’t it?
HILARIE SEHORN
There is an alphabet soup. It goes all the way from C to N. Not all of those letters are available in every state, which is something to take in mind, and they all cover different situations and different copays. There are also plans that are out there, like the plan F, which would cover all of those copays and deductibles. A lot of people say, "Well, why wouldn't you just get that?" Well, that aged out in 2020, so if you've become eligible for Medicare since then, you can't get that supplement. But there are other ones that come into play. For example, G is a very popular one. It pays all your part A deductible and coinsurance. The only thing it does not pay is the Part B deductible, which this year (2021) is $203. It covers the other 20% and everything else.
KRIS FLAMMANG
So which plan right now would be the most comprehensive, available to anyone?
HILARIE SEHORN
The most comprehensive one would be part G. That’s what we see the most of.
KRIS FLAMMANG
Sometimes I meet with clients and they complain, “I got this cost-of-living increase in Social Security, but they took it away when they raised Medicare.” What are they complaining about there?
HILARIE SEHORN
The premium for Part B changes every year, and what they’re complaining about is that it goes up every year. The deductibles also change every year, and they don’t go down either.
I would like to add that this is one thing a lot of people overlook when they retire. They don’t have any frame of reference. Not that they're not educated, they haven't been educated about Medicare enough.
KRIS FLAMMANG
You don't know what you don't know.
HILARIE SEHORN
Until you're in the middle of it and you realize this is not the Medicare your parents or grandparents had.
KRIS FLAMMANG
I’ve often said you almost need a college degree or a certification in order to decipher all that stuff, all the things people get in the mail leading up to their 65th birthday. Talk about the advantages of using a trusted advisor who's knowledgeable in this area.
HILARIE SEHORN
I always like to say the reason you would come to me and not somebody else or try to do it on your own is that this is what I live and breathe, this is what I do every day. When someone comes into my office, they’re like family. My job is to help educate you and to be an advocate. I would love it if I could also help you find what you need. But if not, that's okay too. My main goal is to make sure people understand what they're getting into with Medicare. A lot of people feel right before they turn 65, they’re more popular than they’ve ever been in their life, because like you said, they get all the mailings and the phone calls. All of a sudden, everybody wants to talk to them.
There's a whole lot of information shoved at them, and it’s not always 100% honest or it's phrased in a way that's a bit confusing. If you could come in and see me or somebody like me, we can say, "Okay, let's just break this down into little bite-sized nuggets so that you can make the best and most-informed decision." One that gets you the best coverage possible, that you can afford.
KRIS FLAMMANG
First education, then understanding, then you can make an informed decision that is in alignment with your budget and your lifestyle.
HILARIE SEHORN
Yes, within your budget, but also within your needs. For example, if you’re somebody who takes a lot of prescriptions, you’re going to want to make sure you get a plan that's going to cover all your medications.
KRIS FLAMMANG
Do you have to enroll in these by a certain age or face a penalty?
HILARIE SEHORN
Say you have original Medicare and a supplement. Those are great, but there's no pharmaceutical coverage in that. You need to get Part D, which is your prescription coverage only. You do have to enroll in that when you first enroll in Medicare. The only exception would be if you are delaying your Part B because you work at an office that provides you with healthcare coverage. And you can do that, that's great. But you need to make sure that your pharmaceutical coverage is what is called creditable. That means that the drug coverage part of that insurance is going to cover at least what Medicare says is necessary for the minimum level of coverage. If it doesn't, and I've seen this happen to people who come in and say, "Okay, we delayed our Part B and we're going to get signed up for Medicare and the supplement and the Part D," all of a sudden Medicare comes back and says they didn’t have creditable coverage, so they have to penalty every month, for every month they didn't have part D coverage on top of the premium. Nobody wants that to happen.
KRIS FLAMMANG
We certainly don’t. Is there something you especially like about your business right now, or that you most enjoy?
HILARIE SEHORN
I really enjoy the fact that I am able to do more outreach. With COVID, we lost that for a little bit. One of the things I’m glad to see coming back is I am able to get out and do more educational seminars where I meet with people. There’s no obligation, we just do the ins and outs of Medicare 101, and it gives people a chance to ask questions in an environment where they don't feel like something's riding on it. It’s relaxed, we're not in a rush, and they can get their answers. I also think the nice thing about having a group of people is there's always somebody who has a different perspective, who may ask a question that matters to you but you haven't even thought of it. At the very least, you can see you’re not alone in your confusion.
KRIS FLAMMANG
Strength in numbers, we can all be confused together. Speaking of confusion, what do you think is the biggest misconception people have about Medicare?
HILARIE SEHORN
I’m sure you’ve seen all the ads that are on TV or in the newspapers where they say, "You can get Medicare for $0." The big takeaway is, “Wow, and if do this, I can get extra benefits, like hearing aid coverage.” That’s partially true, because there are Medicare advantage plans, which are different from original Medicare, where a private insurance company manages your Medicare, not the federal government. However, you still pay that Part B premium we talked about. Then you may or may not have a premium for the Medicare Advantage, the Part C plan. However, you're going to have co-pays, you'll have deductibles and you'll have co-insurance. So, it's not an entirely cost-free plan.
KRIS FLAMMANG
You may not have a premium, but you still have expenses.
HILARIE SEHORN
The premium might be zero, and that might sound really attractive. The other thing is, those are all managed care plans. Those are private insurers. So, it's going to be either preferred provider organization, or it's going to be an HMO plan, which is a little more restrictive, versus if you have just Medicare and the Medigap plan, you can go to anybody who accepts Medicare. Also, the advantage plans are a little more geographically restrictive.
KRIS FLAMMANG
More like a traditional health insurance plan. I'm curious if you have an example of a satisfying experience you had with a client recently, obviously not sharing any information that might be confidential. But if someone came to you with certain needs, how you were able to help them.
HILARIE SEHORN
One thing I’ve often found is spouses will have very different needs. For example, with one couple I dealt with, the husband has been blessed with great physical health. He goes to the doctor maybe once a year for an annual checkup and doesn’t take any medications. He knows he needs some coverage, but his main concern is his wife. She had a history of cancer. She goes to the cancer center in Houston a couple times a year and they monitor her. It’s really important that she's able to do that. He was very concerned that she was not going to be able to stay with the same doctors that have been treating her, or that she might not have the coverage for medications she needed.
So that's a situation where they had wildly varying needs. In the end, he wound up with a Medicare Advantage plan, the private plan, which he was very happy with. He spent a little less money and got the coverage he needed. For the wife, we did original Medicare with a Medigap, and we found a robust Part D that would cover all her medications. She knew that she could still see the doctors who had saved her life and were trying to make sure she had the best quality of life. It was really gratifying to be able to help them, because they were very concerned when they walked in the door, and overwhelmed, because not only had they seeing all these ads, they had family members sharing their opinions, and they just weren't sure where to turn.
One other important thing to mention is that you can change your plans so you’re not stuck with your first choice forever. Every year you have the opportunity to do that.
KRIS FLAMMANG
Let’s shift gears a bit. I'm curious about your first memory of money. What’s the first thing you remember?
HILARIE SEHORN
I was about four. My great-grandfather had gone to Scotland, and he brought me back a neat little purse that looked like a tam o' shanter, and he filled it with silver dollars. It was a big deal to have my own money. But a few days later, I peeked in it and the coins were gone. It turned out that my two-year-old brother had swallowed them. Eventually they came back. I still remember those silver coins, and think about that little person who thought having them was the neatest thing in the world.
KRIS FLAMMANG
That is neat. What do you think is probably your biggest life accomplishment, either personally or professionally, or both?
HILARIE SEHORN
Looking back on it, I think it's the fact that I've been able to adapt to things. I've come across challenges that are hard, things that require more of me, but there's never been anything which I’ve said was too much or not worth it.
KRIS FLAMMANG
So, your adaptability and your ability to take on new challenges. In your business, what do you see when you look ahead, the next year, or three years or five years, what do you see as your biggest business opportunity?
HILARIE SEHORN
I think my biggest opportunity is what I've been doing with the outreach. It’s so important to be there for people and not have that choice overwhelm them. Often, they don’t fully realize they are making a major healthcare decision. I enjoy being an advocate for people and helping to educate them, because I don't see Medicare getting any simpler. I also see opportunities growing there because we're an aging population, and there are only going to be more people partaking in this.
KRIS FLAMMANG
The flip side of that is what you see as your biggest obstacle. What do you see as the thing that you have to overcome?
HILARIE SEHORN
The biggest obstacle is the predatory stuff that just becomes a part of it. Anyone can get a list for everyone who's turning 65, and legally, you can send them your ad, as long as you send it to everyone in that demographic in that area. Unfortunately, I think it winds up doing more of a disservice. I'm not saying people's motivations are not great, but I think it gets overwhelming, and it confuses something that doesn't have to be difficult.
KRIS FLAMMANG
You and I probably both see this a lot. The more information people have, the more inability to make a decision. They’re on information overload and they can’t do anything, or they do something at the last minute and it may not be the right decision.
HILARIE SEHORN
Just to shut somebody up. I worry about that. It’s really weird because on one hand, it’s too much information, but on the other hand, it’s not enough of the right information. That’s what makes it difficult.
KRIS FLAMMANG
How do you keep up with changes to the Medicare system and what's going on? You said the deductibles change, the copays change, the supplemental part changes. How do you keep up with all that?
HILARIE SEHORN
I keep up with the Center for Medicare Services, which does a really good job of making sure we are abreast of everything that's happening. In fact, there's an annual education about Medicare that we have to complete, and there’s a test we have to pass in order to work with all the insurance companies. We usually do that from the end of June through the end of September, gearing up for that next open enrollment year. Open enrollment for Medicare is October 15th to December 7th, every year.
KRIS FLAMMANG
You mentioned earlier that people can change plans. Is that enrollment period the only time when people can do that?
HILARIE SEHORN
The only other time you can change plans is if you have a special enrollment period. Say you're in one of these managed plans and you move to a different zip code, or if you've had a death or a marriage, things like that. Also, something that’s rare but does happen, a plan can go belly-up, so there’s a special enrollment period.
KRIS FLAMMANG
So, basically there has to be a qualifying event, otherwise you’re in that October to December range. Even if you made what you thought was a good choice but it turned out to be a bad one, you have to wait till the open enrollment people to make a change.
HILARIE SEHORN
Not just that you’ve made a bad choice. Maybe your needs have just changed. I always tell people, especially with the drug coverage, get it evaluated annually because the formularies for what medications are covered and what the tiers are can change. So even if you're happy with a plan, it may not be the best plan for you going forward, as you need it to change with you.
KRIS FLAMMANG
Again, you don't know what you don't know. Thank you for sharing this valuable information. It will benefit many people, and you’ve enlightened me as well.