Most people think they understand Medicare — but a recent eHealth survey reveals a shocking knowledge gap that could cost you thousands of dollars. In this eye-opening conversation, Derrick Duke, CEO of eHealth, breaks down everything you need to know before turning 65, including the permanent 10% late enrollment penalty most people don’t discover until it’s too late, why skipping Part D prescription drug coverage is a costly mistake, and how Medicare plans change every year making an annual review essential.
Transcript:
Jeffrey Snyder, Broadcast Retirement Network
Well, Derrick, it’s so great to see you.
Thanks for joining us in the program this morning.
Derrick Duke, CEO, eHealth
Yeah, it’s great to be with you, Jeff.
Jeffrey Snyder, Broadcast Retirement Network
Yeah, it’s great to see you. And I, and I think it’s always great to talk Medicare, especially during enrollment time, I know you and the team at eHealth had done a lot of surveying around people’s understanding of the basics around Medicare. Are, are people confident in their Medicare overall knowledge of traditional Medicare?
Derrick Duke, CEO, eHealth
Well, you know, it’s interesting, Jeff, we, we do a lot of research at eHealth to try to make sure that we’re understanding the market and the consumer and, and trying to learn areas where we can engage with consumers to make sure we can help them be better informed. And what’s really interesting is within a recent survey that we did it was surprising to us that so many of the Medicare beneficiaries or the respondents replied that they were confident. They were very confident in understanding Medicare and what their options are.
But unfortunately the, the details say something different.
Jeffrey Snyder, Broadcast Retirement Network
So why that, are people just overconfident? They, you know, does ego get in the way? Do they just, maybe they’re not educated enough about the, the, the, the ins and outs of these, of the, of the process and, and, and what enrolling in Medicare means?
Derrick Duke, CEO, eHealth
Yeah, I think it really starts with just the basic fact that, that Medicare is complicated. It is a very complicated system. It’s a complicated process to enroll and there are lots of options.
And I think with, while options are really good for choice in making sure that, you know, beneficiaries get plans that meet their needs, but with choice comes, you know, complexity and more, more need to understand what those choices are. I also always say, Jeff, that I personally believe consumers are very emotional around two things, their money and their healthcare, because they’re emotional things that we have to decide and that we have to manage. And so I, I think sometimes with with our money and with our healthcare decisions, maybe generally we’re overconfident just as, as people.
Jeffrey Snyder, Broadcast Retirement Network
Yeah. I wonder if there’s like the ostrich effect where, Hey, if I don’t think about it or if I act confident, then everything’s going to be okay. And I guess maybe some people think that maybe some things are out of their control or I’ll figure it out when I get there.
But really, Derrick, you should know the options before you even get anywhere close to age 65, would you think?
Derrick Duke, CEO, eHealth
That’s correct because there’s some decisions that you, that you make or that you can make that can have permanent implications to the Medicare coverage that you have over the remaining, you know, the remainder of your lifetime. For example, we found that many folks in sort of the age group pre, pre Medicare. So call it 55 to 64 didn’t understand that for every year that they don’t enroll when they’re eligible to enroll, that they’ll incur a 10% penalty and that that penalty is permanent in terms of how much they actually pay for their Medicare coverage in original Medicare.
So so there are some really important decisions that we have to make as consumers around Medicare coverage to, to just ensure that we’re, uh, we’re making the most informed decision. And I think that’s really what’s important is for consumers to understand they need to be as informed as they possibly can be to, to try to ensure that they make the best choice for their circumstances, because not everyone’s circumstances are the same.
Jeffrey Snyder, Broadcast Retirement Network
No, uh, it’s a, we’re all unique and we all have unique needs. And some of us may work longer than others. Some of us may have greater savings than others, but I guess the key is you need to enroll.
There’s been a lot of change recently around the prescription drug benefit. How important when you enroll in that traditional Medicare, is it to also get the drug benefit given that I think the, uh, there’s been some negotiation on some of the more popular drugs to kind of bring those costs down. But is that a, is that something that people off people often overlook when they’re enrolling?
Derrick Duke, CEO, eHealth
Yes. Well, first of all, it’s very important because in original Medicare, which is part A and part B, uh, which the, the, those two combined cover inpatient hospital stay and outpatient and doctor, uh, visit sort of cost, uh, what they, what part A and part B do not cover is they don’t cover, uh, prescription medicine, prescription drugs. And so it’s, it’s really important that seniors, if they choose original Medicare, that they also enroll in a, in a part D plan to ensure that they have coverage for whatever medications they either have today or that they potentially might have in the future as their healthcare needs change.
And then beyond that, you’re right, Jeff, in that maybe not unlike, uh, the Medicare advantage market today, you know, benefit designs inside a part D plans change on an annual basis. So, uh, so even for Medicare beneficiaries that have a part D plan, it’s really important that on an annual basis, they review their plan. They review their prescription drugs to ensure that the part D plan that they’ve chosen still meets their need based on their prescriptions.
Jeffrey Snyder, Broadcast Retirement Network
And, and that doesn’t have to be difficult. I mean, you should always review in a fund from a financial point of view, review non Medicare things as well. Your, your beneficiaries, your, your retirement allocation, your savings rate, all those things are probably very important, but you should just get in the habit as an, as you don’t have to be the expert in the room in order to pick the right to do that.
Right. I mean, even someone like myself, who is not an expert in medical care or Medicare would be able to figure it out.
Derrick Duke, CEO, eHealth
That’s, that’s correct. Um, although I would just say, you know, generally, uh, we would encourage people, uh, to, uh, you know, lean on people that they trust and that they know, right. And that they, they, they maybe have an understanding or knowledge that, that that person does understand, uh, uh, the ins and outs of Medicare, the coverage options.
Uh, and if that means that they need to go find help with, uh, with a licensed agent or broker, uh, they shouldn’t fear that there’s plenty of great agents and brokers in this market that really are here for the right reason. And the right reason is to help people and to make sure that they are making those informed choices, uh, and they should ask questions. They shouldn’t be fearful of engaging on those conversations.
Um, you know, I always say in my own personal life, that any decision that it’s based on fear or made on fear is, is the wrong motivation for, for making a decision. And so we would just encourage seniors. We would encourage family members of seniors to make sure they’re engaging and that they’re, they’re doing the annual review to make sure that they have the right coverage.
Jeffrey Snyder, Broadcast Retirement Network
Yeah. A point well taken on the advisor. Uh, you know, I, I, I totally agree with you.
If you find the right person to be your proxy and to educate you, you really can’t go wrong, especially if you have a good relationship. Let me, let me ask you about, uh, you know, we live in an aging America, obviously programs like Medicare, social security, very important. Where does long-term care fit in or does it fit in this equation?
Because I think that’s, that’s could be a misconception that people have that if for whatever reason, you need to go into some type of assisted living facility, need a caregiver is all that covered in traditional Medicare.
Derrick Duke, CEO, eHealth
No, Medicare, Medicare doesn’t have a long-term care, uh, benefit or portion, um, uh, to the, to the coverage. So, uh, for seniors that are in Medicare, um, and that need that type of coverage, they really are going to need to find it in inside of, um, uh, you know, a long-term care policy. There are Medicare benefits in a, in a, what I would call a short-term nature for like rehab facilities, uh, things like that, but anything that gets beyond, uh, and I, forgive me, Jeff, I’m going to not remember the exact number of days off the top of my head.
That’s fine. There’s some, yeah, there is some short-term benefit, but once you get to a long-term care that is not covered under traditional Medicare.
Jeffrey Snyder, Broadcast Retirement Network
Yeah. And I think those are the, some things where you really need to be educated because chances are all of us will need assistance in some way, shape or form at some point in our life, whether it’s now or in the future you mentioned earlier on. Um, and I know this was not the subject matter in the survey, but you mentioned Medicare advantage.
And, and do you think that there’s maybe discrepancies between what people understand about traditional Medicare and what Medicare advantages, you know, as from the I’m 54 years old. So from the, I’m not yet schooled on the differences, but I would have difficulty distinguishing between the two options, so to speak.
Derrick Duke, CEO, eHealth
Right. So, so in, in, inside of our Medicare system, uh, there’s four, uh, what we call parts. There’s part a part B, as I said before, those are the original Medicare covering both inpatient and outpatient hospitals and doctors.
There’s part D that covers prescription drugs. Now, with someone that chooses original Medicare, what, what, in fact, our survey found that over 60% of people don’t understand that with part a and part B, that they’re responsible for a 20%. They have a 20% copay for all covered services.
If they have traditional, uh, Medicare part a and part B, uh, for many people that choose that, that’s where a Medicare supplement plan comes into play. And so they choose a Medicare supplement plan. They have to pay a monthly premium for that plan, but those benefits, those plans cover all Medicare eligible benefits at any provider that accepts Medicare.
So that’s the way original Medicare. So we would just say, I would say, uh, for beneficiaries, if they want to choose original Medicare, make sure they have a MedSupp plan, or they’re going to face a copays of 20% on any covered services. Medicare advantage comes in.
It’s part C that’s what Medicare part C is. And that’s where, uh, all the national payers, all the, all the large carriers and regional carriers that are in that market, they design plans that get approved by a CMS that have a broad base set of benefits that includes inpatient, outpatient, uh, prescription drug coverage, as well as other types of services. Many of those plans Jeff are zero premium.
There’s no premium up front. So, so different from the MedSupp, they don’t have to pay a monthly premium, but there are copays that they have to pay, uh, you know, throughout the year, depending upon the type of service and the type of benefits. So, um, so it’s a, a Medicare advantage is an option for people, uh, that want one plan.
They don’t want multiple plans, uh, maybe for their financial situation, it’s better to have a zero monthly premium and they’ll manage sort of the copays along the way. Uh, and so it’s really just sort of an individual choice depending upon, uh, the, the financial construct of the plan that they want, whether their doctors are in network for the Medicare advantage plan, or if they want to go to the traditional route.
Jeffrey Snyder, Broadcast Retirement Network
Uh, I guess my last, I have a couple more questions, but we’re kind of running out of time. So, and we can always bring you back, but let me ask you about, um, you know, during enrollment period, my understanding is that there’s a lot of imposter scams. People, there are just these nefarious people that are not even domiciled here in the United States.
I mean, they’re just trying to trick people. How, how prevalent did that, did that come up at all in the confidence survey and the survey that you were doing? Are people concerned about maybe their social security number, or their information being out there and maybe getting duped by these bad actors?
Derrick Duke, CEO, eHealth
Yeah, it was not in our most recent survey, but I would just say in general, I think that is a concern for people. And that’s why it’s really important that people, um, um, you know, engage with, uh, uh, people that they have a chance to build relationships with, organizations that have trusted brands, uh, that are well known. It’s really important to, uh, to, uh, you know, to make sure that you are, and we, we would just say, you know, uh, we would encourage people never to give, uh, out, um, that type of information to someone that you don’t know and that you haven’t verified the organization.
Um, uh, so it is, and, and unfortunately in an industry, you know, with Medicare Advantage, uh, we have an open enrollment period. It’s a really short time period. It’s about seven weeks.
Uh, there’s just a high volume of transactions that occur in, in that type of market, unfortunately attracts bad actors because, you know, there’s high velocity of transactions and, uh, it’s really, really unfortunate that that happens. And quite honestly, that’s something that we’re really passionate about at eHealth. Uh, our, our Medicare beneficiaries, our seniors in this country, they deserve to be helped and they deserve to be informed, uh, with, with options and plans that are in their best interest.
And that’s certainly what we strive to do. There’s many people that we compete against that strive to do the same thing. So there’s plenty of great organizations in the market that will help people.
Uh, we would just encourage people to make sure, uh, they know and verify who they’re, who they’re talking to. Yeah.
Jeffrey Snyder, Broadcast Retirement Network
Well, well said Derrick, we’re going to have to leave it there. It’s a great survey. People should do their research, go to eHealth, go all across the internet.
Be careful, of course, what you look at, but you’ve got to make sure you’re informed before you make those decisions. Great to see as always. Thanks for joining us.
And we look forward to having you back on the program again, very soon, sir.
Derrick Duke, CEO, eHealth
Thanks, Jeff. Looking forward to it. Have a great day.
