RJS 12-27-25

Episode Transcript

Speaker 1 (00:00):
Good morning to all. Craig Shillig here and this is
Safe Money. I'm here every Saturday to talk with our
listeners about financial strategies we use to manage and protect
assets safely. I've been an insurance agent for over twenty
five years. During that time, I've learned a few insurance strategies,
like using annuities as safe money harbors or using cash

(00:23):
value life insurance to supplement your retirement income. Just a reminder,
you can call our office at five six three three
three two two two zero zero if you'd like to
schedule an appointment to discuss your individual situation, or you
can email me at Craig at Craigshillig dot com and
that's my name, c r Ai G Hat cr Ai

(00:48):
G S c h I L l I G dot com.
Today I want to discuss SAR termination letters Service area
reduction letters from United Healthcare which end on December thirty first,
and we'll talk about the upcoming OEP open enrollment period

(01:12):
for Medicare that runs the first quarter of the year
January one to March thirty first for Medicare beneficiaries. Now, yes,
you can make changes to your plan during first quarter
during OEP the open enrollment period for those of you
that have currently on a Medicare Advantage plan, but also

(01:35):
for those of you who have received a star letter
SAAR service Area reduction letter from UHC. The letter will
note that the plan terminates in a couple of days,
on December thirty first. That letter means that if you
do not take any action, you will not have any

(01:57):
coverage in January. If you come in make a switch
after December thirty first, you won't have your new coverage
effective until February first, twenty twenty six, meaning you have
no coverage in the month of January. So keep that
in mind. Now, all this doom and gloom isn't all bad.

(02:17):
This also does present an opportunity for those that are
receiving a service Area Reduction letter. If you get a
SAR letter, you can move to a guaranteed issue Medicare
supplement plan. So keep that in mind and keep your letter,
don't throw that away. And if you don't understand what
I just mentioned, call me in we'll discuss it. Let's

(02:40):
talk about the options that you have for the next
couple minutes. You basically have three choices. If you receive
a SAR letter. You can choose to do nothing and
then you won't have any coverage in twenty twenty six.
You can choose to go back to original Medicare and
pick a Medicare supplement plan and a standalone drug plan,

(03:04):
or you can decide just to pick another Medicare advantage plan.
So let's break down these three options. Do nothing and
have no coverage in twenty twenty six. I wouldn't do that,
but that choice is up to you. Your Red, White
and Blue Medicare card only covers eighty percent of Medicare
covered services. That means you're on the hook for the

(03:26):
other twenty percent of the bill. Plus, the Red, White
and Blue Medicare card only covers Parts A and B
of Medicare. It has nothing to do with Part das
and drug Medicare. And remember, you must have a drug
plan when you are eligible for Medicare, regardless of if

(03:47):
you take any current medications or not. You must have
a drug plan. Option two, the Service Area Reduction letter,
gives you the option to go back to original Medicare,
get a medic gap plan otherwise known as a Medicare
supplement plan, and a standalone Part D prescription drug plan.

(04:09):
There'd be no medical underwriting required due to having that
service area reduction letter, and all you have to do
is write a check and pay your monthly plan premium
every month. You'll have three items to pay for monthly,
your Part B premium for twenty twenty six, which for

(04:29):
most people is going to be two two ninety monthly premium,
and this does get taken off your Social Security check
as long as you're drawing Social Security at that time.
If not, they'll bill you quarterly. You'll have a monthly
supplement plan premium and then a monthly standalone drug plan premium.

(04:51):
You'll carry three cards in your purse or your wallet.
Under this option two. Option three, you could just pick
another Medica Care parts see Medicare Advantage plan that is
offered in your area. EDNA has some very competitive plans
on both sides of the river for twenty twenty six.
I've talked about a few of those in the past shows.

(05:15):
For those of you that have received a star letter
from United Healthcare, understand that the seven or eight page
letter gives you some guidance, The letters a little legal ease,
and the only important pages or pages one through four
that tell you at the bottom of each letter in

(05:36):
a box that says this will allow you to go
back to original Medicare. So let me read what a
star letter is for my United Healthcare customers that are
on Plan one or Plan four on both sides of
the river. Dear member, AARP Medicare Advantage from United Healthcare

(05:59):
won't offer your Medicare plan in twenty twenty six. This
means your coverage through the AARP Medicare Advantage plan from
United Healthcare will end December twenty December thirty first, twenty
twenty five, you need to make some decisions about your
Medicare coverage. What happens if you don't join another Medicare plan.

(06:25):
If you don't take action before December thirty first, you
will lose your prescription drug coverage and only be covered
by original Medicare starting on January one, twenty twenty six.
Even if Medicare places you in original Medicare, you still
have other opportunities to join a Medicare health or a

(06:45):
drug plan. Because your plan will no longer be available
to you, and to provide you additional time to evaluate
your options, you have a special opportunity to join a
new plan anytime until February twenty eight eight, twenty twenty six.
If you join a new Medicare plan after December thirty, first,

(07:08):
please note your coverage and the new plan won't start
until the month following the month you've joined. If you
don't join a plan with a prescription drug coverage or
a standalone prescription drug plan with original Medicare by February
twenty eight, twenty twenty six, you won't have prescription drug

(07:28):
coverage in twenty twenty six, and you may have to
pay a lifetime part de late enrollment penalty if you
join a Medicare prescription drug plan later in life. What
do you need to do? You need to choose how
you want to get your Medicare health and prescription drug coverage.

(07:48):
Review your options for Medicare coverage, and decide which plan
is best for you. Option one. You can join another
Medicare health plan. A Medicare health plan is offered by
private insurance companies that contracts with Medicare to provide benefits.
Medicare health plans cover all services that original Medicare covers,

(08:10):
and may offer extra coverage such as vision, hearing, or dental.
Most Medicare health plans offer prescription drug coverage. If you
join a Medicare plan without drug coverage, you may want
to join a separate Medicare prescription drug plan to get
prescription drug coverage. If you don't join a separate Medicare

(08:34):
prescription drug plan, you may have to pay a lifetime
party late enrollment penalty. If you choose to join one
later option two, you can change to Original Medicare. Original
Medicare is fee for service coverage managed by the federal government.

(08:54):
If you choose Original Medicare, you need to join a
separate Medicare prescription drug plan to get prescription drug plan coverage.
You also may want to buy a Medicare supplement plans
sometimes known as a medicgap policy, to fill in the
gaps in the original Medicare coverage. If you currently pay

(09:16):
a reduced Part B premium based on your current plans benefit,
you will lose access to this benefit effect of January one,
and you will have the full Part B premium deducted
from your monthly solid security check unless you join another
plan that offers this benefit special right to buy a

(09:37):
metagap policy because your plan is ended. This letter is
your proof that you have a special right to buy
a MEDIGAP policy. You'll have this special right for sixty
three days after your coverage with AARP Medicare advantage from
United Healthcare ends. See the enclosed medigap fact sheet for
more information on your metagap rights. Likely need to join

(10:01):
a separate Medicare prescription drug plan if you want Medicare
drug coverage. If you have an employer or union group
health plan, VA benefits, or Trycare for Life, please contact
your insure or benefits administrator ask how joining another plan

(10:23):
or returning to original Medicare affects your current coverage. Note
Medicare isn't part of the health insurance marketplace. Following the
instructions in this letter will ensure you're reviewing Medicare plans
and not marketplace options. Keep this letter. It's proof that
you have a special right to buy a Medicapp policy

(10:46):
or join a Medicare health plan. So that's a copy
of the letter that a lot of my United Healthcare
clients are getting now. Yes, you could make changes to
your plan during first quarter twenty during OEP for those
of you that currently have Medicare advantage plans, but for
those of you are receiving a star letter. Please note

(11:11):
that the termination date is twelve thirty one. Now that
means you want to have coverage in January. If you're
come in make a switch on say January second, your
new coverage will not begin until February first. You'll have
no coverage the month of January. So please remember that

(11:31):
now all this human glooming is all bad. This also
presents an opportunity for those that are receiving this star letter.
And one more time, keep your letter, don't throw it away.
And if you don't know if you've got a Star
letter or not, call me and we can talk more
about it. So let's see for twenty twenty six. I

(11:57):
might have mentioned this once, but I'll reiterate. The Part
B premium for most of you guys is going to
be two two ninety and the annual deductible for Part
B in twenty twenty six will be two hundred and
eighty three dollars. That's two hundred and eighty three dollars,
up from two point fifty seven in twenty twenty five.

(12:19):
Some network contracts are also changing. Two remember back in
October I mentioned a letter from United Healthcare that was
released around the first week of October about them not
renewing their contract with Mayo in Rochester. Mayo is saying

(12:40):
they won't accept any Medicare advantage plans in twenty twenty six. Now.
Contract disputes like this come up from time to time.
Understand that this could change with the stroke of a pen,
but for now, the only way to go to Mayo
as an in network patient in twenty twenty six to
be only with a supplement plan, not a Medicare advantage plan.

(13:06):
Keep that in mind. Because of this our letter, this
may be an opportunity for those of you that have
received one. You could go back to original Medicare and
get a Medicare supplement and a standalone drug plan so
you wouldn't have to worry about doctor hospital networks, or

(13:28):
if you're a current patient at Mayo, so you can
continue being a patient there. Let's talk about supplement plans
for a minute. How do I pick a Medicare supplement plan.
Medicare supplements are letter coded. They're alphabetized as an apple
all the way through and is an NANC. There's Plan F,

(13:50):
plan G, there's high deductible G, and there's a plan
and is an NANC. Now, what do all these letters
codes mean? Each plan letter code depicts an amount of
coverage and services that a certain plan covers. These plan
letter codes are the same across all insurance companies, So

(14:13):
a Plan Phison Frank at United Healthcare has the same
benefits and coverage as a Plan Ephicon Frank at Wellmark
or ATNA, or a Blue crossby Shield of Illinois. The
differences between the insurance companies are one, what that plan
wants to charge per person or per class of insurance

(14:37):
on a monthly basis, but more importantly to you, number two,
what the insurance company's track record is for historical premium increases.
Plan premium increases every year as you age, and they

(14:58):
can get expensive as we get older in life. Most
premiums then level off about age eighty five eighty eighty five,
depending on the company, but in some cases those premium
increases can be substantial. So let's review some of these
supplement plans. So Plan F is in franc that's the

(15:19):
most comprehensive plan you can purchase if you're old enough.
In order to qualify for a Plan F as in Frank,
you must have turned sixty five by January of twenty twenty,
so if you're younger than that, then you'd have to
go to Plan G. The plan A F covers one
hundred percent of all basic Medicare services, basic benefits, hospitalization,

(15:46):
medical expenses, and hospice care, skilled nursing facility, the Part
A deductible, the Part B deductible, Part B excess charge,
and most plans even have a foreign travel emergency provision
for care received outside the United States, but again this

(16:07):
is only available for those that were eligible for Part
A Medicare prior to January one to twenty twenty for
everybody else, Plan G is the most comprehensive plan you
could purchase. It has broad coverage, it usually comes with
a household discount. It covers one hundred percent of what

(16:29):
the plan covers outside of your Part B deductible, so
you must pay your Part B deductible first, which is
two hundred and eighty three dollars. Then the plan will
pick up the rest one hundred percent hospitalization, medical expenses,
hospice care, skilled nursing, Part A Medicare deductible, Part B

(16:52):
excess charges, and most of them again will have a
foreign travel Emergency benefit. Plan G high deductible. Under Plan
G High deductible, you must pay the Part B deductible
of two eighty three and your high deductible amount is

(17:12):
twenty nine to fifty. Now, once you reach your twenty
nine to fifty deductible, the plan will cover hospitalization, medical expenses,
hospice care, skilled nursing, Part A hospital deductible, and Part
B excess charges. And please note that preventative is also
built into that plan. Plan And is a nancy. This

(17:37):
plan also has broad coverage with a few copays under
Plan and is a Nancy. And please understand Plan G
is going to have the highest monthly premium out there
outside of Plan FIS and Frank. Plan G High deductible

(18:00):
will have the lowest monthly premium because you have a
deductible to meet first. Plan and as a Nancy is
kind of in the middle. It's kind of more of
a true Copey plan. Plan INN as an NC has
broad coverage, which with a much lower monthly premium than
Plan G. What Plan as an Answer requires is you

(18:26):
have to pay your Part B deductible first of to
eighty three. Every doctor office visit will be a twenty
dollars a cope. If you go to the er. There's
a fifty dollars a cope under Plan and as a
Nancy supplement. But Plan And as an Nancy will cover

(18:46):
the skilled nursing facility stays, hospitalization, medical expenses, hospice care,
the Part A deductible of sixteen seventy six. Under Part
A hospitalization. It will have a foreign travel emergency benefit.
But again, oh, it also covers let's see Part B

(19:12):
excess is not covered under Plan as the n NC,
so that is a difference. Part B excess doesn't come
up that much, but when it does, you'll know. But again,
to reiterate Plan and as an NC, you have a
two eighty three deductible twenty dollars office Copey per visit
and a fifty dollars er Copey per visit. But again,

(19:37):
if Plan G supplement is two hundred dollars a month
Plan N as an NC in the same age category,
it's probably going to be about sixty dollars a month
cheaper in premiums. So that's why I kind of call
it a true Copey plan. One of the benefits of

(20:00):
Plan And as a nancy or high deductible G is
because there are fewer of those contracts out there, and
because of claims paying ability, the premium increases on those
two letter classification codes is usually much lower than plan
effort G. So also keep that in mind. Remember at

(20:21):
age sixty five, you're an infant, you're a baby on
the Medicare system, meaning you're paying the lowest amount of
premiums based on your age to offset the costs for
the eighty five and ninety five year olds that are
using the goods and services of Medicare every day, and

(20:45):
they're driving the costs of those premiums via claims. A
couple other notes under supplements. Some supplement plans will allow
you to buy writer coverage for dental for dental coverage,
hearing and vision coverage, and some other supplements will offer discounts.

(21:08):
There's discounts for another person in the household, regardless of
the take a policy or not. There's also discounts if
husband and wife get a policy from the same company,
as well as discounts on fitness gym memberships, and some
of them will also cover fitness gym memberships. It just

(21:29):
depends on what supplement plan that is. Some will be
very generous in certain aspects of these additional plan coverages
and some others will not. But that state's specific and
it's garnered by the state and county that you reside

(21:49):
in as to what those benefits would be. Understand, benefits
in Iowa and Illinois are a little different based on
insurance state law, so not all that stuff is the
same state to state. During the holidays, I know you're
talking to other relatives and they will give you strong
opinions one way or the other about what plan is

(22:11):
better for you. But please note that in some states
their plans are completely different than what's offered where you live.
Minnesota and Wisconsin have different types of plans than Iowa
and Illinois, so please keep that in mind. Another thing
is based on population density. Major cities will have higher

(22:37):
premiums than more smaller rural state areas will, so Iowa
premiums are generally lower than Illinois just based on population density,
so keep that in mind too. Everyone will have an
opinion during the holidays about what plan is right for you,

(22:58):
but understand it's an individual situation and please keep that
in mind. A lot of the pricing is based on
your usage as well as, more importantly, the medications you
currently take. That will determine what you're out of pocket
costs for just overall medication purchases in a calendar year

(23:26):
will be, and how that would affect your overall household budget.
Next week, i'll talk more about the open Enrollment Period
known as OEP for first quarter of twenty twenty six.
That does be again on January first in the new

(23:46):
year of twenty twenty six, and we'll run through the
first quarter until the last day of March at twenty
twenty six. But again during first quarter, you can make
some changes if needed or warranted, regardless of having a
star letter or not. It is primarily for those that
have Medicare Advantage plans under Medicare Part C, but there

(24:09):
will be other situations in there that may or may
not fit your criteria. Don't forget. You can call our
office at five six three three three two two two
zero zero if you like to schedule an appointment to
discuss your individual situation, or you're welcome to email me

(24:32):
at Craig at Craigshilig dot com. And that's my name,
c R A I G at c R A I
G S c h I L l I G dot com.
This is Craig Shillig with safe money,