Medicare and Retiree Coverage

A Different Ballgame in Terms of Coverage

Sometimes, we have people that schedule phone time with us and, well, there’s really nothing that we can help them with. 

What TYPE of folks do I mean? 

Generally, it’s people with some of the following insurance coverages either in place OR available to them as a retiree option.

• Teachers. In most cases, teachers have access to strong coverage and, most upon retirement have access to a very strong retiree program that costs them very little. That goes for their spouse as well. 
• FEHB. Federal workers. The FEHB is a system in itself as you can imagine. We generally do not work with people with access to that coverage. There are all sorts of rules with suspending coverage, enacting coverage and the like. You generally are not required to enroll into Part B which presents you with other questions you’ll need to answer on your own. 
• UAW. In our backyard in Michigan, hourly workers that are covered through or retired from Ford, GM, and Chrysler have access to a terrific retiree program. When it’s time to enroll? The consumer needs to enroll into Part A and B of Medicare and enroll into their plan through the UAW Trust. Special Note: Big Three SALARIED? You need us. You typically have no retiree coverage provided but many receive a health reimbursement account which is funded to help offset some costs as you go and purchase the Medicare products that you’d like.
• Universities. Many universities across the land have really good coverage as well. This would echo many of the sentiments above. 
• Unions. Many unions still have good, old-fashioned healthy benefits and the monthly cost to the retiree is typically very little. Don’t be fooled into feeling that there is “better out there”. 
• Often fire and police department retirees as well. Again, tied to the government/municipalities. 

Of course, we can't capture every profession that might be offered retiree benefits for their years of service but we wanted to give you a list of common situations.

Michigan Public School System Retirees

Let’s discuss the Michigan public school teachers retiree program as an example. We’ll use this as an example as it’s in our state and one that we get questions about fairly frequently.  

Unfortunately, the program doesn’t seem to notify people early enough in the process (in my opinion) to allay concerns. Some people start worrying about their Medicare coverage a year in advance and want to know what to do and when. They finally hear from ORS (the office that administers the program) a few months before the person turns 65 but the person has questions well before that date most of the time.

Unfortunately, they may call our agency to find out about their retiree program (that we do not administer or service), and there really isn’t much we can tell them. We direct them to the ORS information here:  https://www.michigan.gov/orsschools/0,4653,7-206-71328_71337---,00.html

The pricing is excellent for teachers:  Here is the 2021 pricing listed on their site: https://www.michigan.gov/documents/orsschools/MPSERS_Retiree_Monthly_Insurance_Rates_703353_7.pdf

On the ORS website, the process that a new retiree needs to go through in terms of enrolling into both Medicare and their retiree plan is listed there. The pricing is super strong - the outside Medicare world where our agency works can’t compete with that. 

The Michigan retiree plan is a strong program and we have never encouraged anyone to not enroll into that plan offered to them.

Flip side. Texas TRS plan for the Texas teacher retirees. Their plan changed a lot a couple of years ago. The premiums that the retiring teacher will pay is higher than in Michigan. What they charge for adding a spouse is higher than Michigan (retiree plus spouse is $529/month vs $64/month). They’re maximum out of pocket cost at $3,500 is higher than Michigan retirees which is $1,700 in 2020. Their 2021 information is listed here:  https://www.trs.texas.gov/TRS%20Documents/trs-care_plan_highlights_2021.pdf

So, with TRS, that is a case where it makes more sense to leave the retiree option. However, this is not extremely common. Many times it will come down to a math problem. Always balance coverage and cost. And, remember these plans change annually. 

A last example. This is for Illinois school retirees. You can see a $42.00 monthly premium and an $1,100 maximum out of pocket costs in addition to very strong (i.e. good) prescription coverage. This is another plan where the retirees heading into the plan “don’t need us”. They just need to enroll accordingly and be thankful.  https://www2.illinois.gov/cms/benefits/trail/trip/Documents/2021/TRIP%20TRAIL2021.pdf

Rule of Thumb and General Tips

So, we’ll provide you with a very general rule of thumb. If you are to pay $200 per month beyond your Medicare Part A and B cost to the government (remember, every person will pay the government their premium for Part B; and some will even pay for Part A). So, determine your Part A and B cost and then if the plan available to you upon retirement is over $200 in premium each month (per person), then YES - give us a call and we can help you take a look. 

For those of you that don’t need us, what else can you do? Here are a few tips:

• Don’t get caught up in the “noise” of Medicare if possible. Your friends and family that do NOT have access to the programs that you do are relaying all sorts of information to you as to what they are seeing and hearing about the PRIVATE market of Medicare products. The noise doesn’t apply to you.
• Contact the office that administers your program. For Michigan Teachers, that’s called ORS (Office of Retirement Services). Contact the office and they will tell the process that you need to follow and what you do or do not need to be enrolled into. 
• Don’t attend a whole bunch of “Medicare 101” type seminars/Zoom sessions. Yes, that includes ours! Why? When you attend these programs, realize that these sessions are designed for people that need to look for their “next step” of medical coverage because they do not have access to a program such as yours. They are in completely different situation and they need to learn what they can about the product offerings that they’ll need to decide between. That’s not you. So if you attend, you’ll only be subjected to shiny new products and cause yourself some undue stress. When we discuss Medigap at our sessions, people love the sound of how strong the coverage is.  BUT, when you’re a UAW hourly retiree…. you don’t need Medigap! You can’t legally have both programs and you’ll be wasting money and good coverage by leaving your retiree benefit. You need to just follow your process with your administrative office for your medical program.

A quick re-cap. Here’s who DOES need us:

• Those of you with ACA/Marketplace coverage;
• Those of you leaving employer coverage and your next stop is Medicare coverage along with a product that you need to assess and purchase on your own;
• People that might be on employer insurance but also eligible for Medicare. As long as their “final stop” isn’t a retiree plan as mentioned above, then we can help them assess if they should leave the employer coverage and go directly to Medicare prior to their retirement;
• The Big Three salaried retirees mentioned above. They don’t have a large, negotiated on their behalf program for them so they need to learn, look to products and understand what they are purchasing;
• Many healthcare workers. Seems a bit oxymoron-ish, but many hospital systems and even insurance carriers themselves don’t have great retiree options if any. We have several hospitals in our Michigan backyard where we work with many of their employees upon retirement or departure;

Watch our YouTube Clips

So, lots of people DO need us. Retiree benefits aren’t as available in today’s world as they were 20 years ago. 

But, those of you that don’t need us? Well, count yourself rather fortunate. Feel free to watch our videos on YouTube if you just feel like you should be doing “something” related to Medicare

At least that way, you’ll understand what all of your friends are talking about as they talk about their plans.

Best wishes to you ~