#11- Solution – Luck -Emma’s Success Story

Emma was turning 65 in March and was going to continue to work.

She called us concerned about all the Medicare penalty discussions that she was warned about by her friends and co-workers. Even her HR team at her employer warned her that she had to sign up for Medicare or incur a penalty.

During our meeting, we laid to rest all the gossip about penalties she had heard. We provided facts about Medicare and confirmed some details about her employer. Her employer plan had more than 20 employees and the medical plan was deemed“creditable coverage” by their group insurance carrier, so Emma could continue to work, keep her health plan at work, and defer Medicare A and B. She was pleased to know she would not have to worry about any penalty when she finally separated from her employer’s health plan years later and would enroll in Medicare then. 

Proof in the Math

Having resolved her enrollment concerns, I encouraged her to compare her current benefits to Medicare. “Why?” she asked. I explained that sometimes the comparison math identifies an opportunity to transition to Medicare while still working. Surprised Emma remarked, Really? You mean some people give up their employer plan for Medicare? Oh, but we have a great health plan at work and it only cost me $150 a month”, she replied confidently.” “ Well, we do a bit of comparison math, and If it math makes sense and the benefits Medicare provides meet their needs, people transition while working all the time!” I replied. “Now I am curious! What information do you need to compare plans? I brought my plan documents with me.” Emma asked eagerly.

We reviewed the group plan deductible, co-pays, and the out-of-pocket maximum. The plan she was enrolled in had a $2,000 a year deductible and a $6,500 out-of-pocket maximum. In addition, there was a $25 per doctor visit co-pay and a $75 per specialist doctor co-pay. There was also a 20% co-pay at the hospital until she reached the $6,500 out-of-pocket maximum. So, she had to pay the first $2,000 a year before her employer plan would pay for anything, in addition to the $150 a month premium. 12 x $150 premium = $1,800 + $2,000 deductible = $3,800.

On the Medicare side, if she registered for Medicare A and B and paid the Part B premium at $148.50 a month, she could choose a Medicare Advantage Plan that had a zero monthly premium and no deductible. The out-of-pocket maximum was also only $3,200 for the year, which was half of what her employer plan would cost in the event of a serious medical event or ‘worse case scenario’. Additionally, her doctor and neighborhood hospital were on several plans available to her. Also, there was no co-pay to see her primary doctor and only a $30 co-pay to see any specialist.

But there was still more!

The Medicare Advantage Plan she was considering had less expensive co-pays on her medications too. So the basic plan math= 12 x $135.50 part B premium= $1,626, $0 deductible so plan costs= $1,626.

Erma’s reaction to the results of the comparison was, “Why on earth would I keep my employer plan when this plan has less cost? Do you realize how much money I’m going to save? It’s over $2,000 a year!”  Emma decided to let her employer plan go and sign up for Medicare when she turned 65. The comparison math worked for her particular situation.

It’s helpful to have experts to talk to before turning 65. Let our Certified Medicare Planners® give your employees confidence in their Medicare decisions like we did for Emma. 

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– Lora