Mind, Body & Spirit

What your financial advisor wants you to know about Medicare: How to cut through the hype and make your best decision

If you are an American age 65 or older, you are very likely aware that we are now in the Medicare annual election period. The weeks from Oct. 15 to Dec. 7 are when Medicare beneficiaries are able to add or change their Medicare insurance for the coming calendar year.

The flood of mail and TV advertising for Medicare plans is hard to escape during this time although it can sometimes raise more questions than it answers. Will my same medications be covered and at the same cost? Will my favorite physician still be in my network? Do I have the best type of plan for my health needs to begin with?

Fortunately, for most beneficiaries, the year-to-year changes in their plan are not very significant and do not necessitate a search for something new. However, it is still crucial to verify that this is the case since an overlooked change to the provider network or drug coverage could be very costly. Conversely, for those new to Medicare, there are deadlines to be aware of and important decisions to make, sometimes with lifelong ramifications.

What is a Medicare beneficiary to do? The best advice: Get help.

Specifically, find an insurance agent certified to represent Medicare plans and set up a meeting. In particular, the agent you seek should have the following characteristics:

  1. Contracted with ALL carriers in your area. An agent that represents only a few (or just one!) insurance carrier will by definition not be able to assist with all available plans and may omit what could be the best choice for you.  How to know? Simply ask… agents that are fully contracted are very happy to tell you.
  2. Thoroughness. The core of a consultation is an evaluation of the medication you take and the providers that you see in order to ensure that you know their costs and restrictions in advance. They may also inquire as to medical transportation needs, durable medical equipment needs, and anything else that could generate a medical expense.
  3. Experience. Agents are re-certified every year so those that go through the process are dedicated to serving this market and learn new things each time. The best agents will be able to anticipate what questions you might have and can better assess which product is the best fit. Further, an agent that has been in the industry for many years is much more likely to still be there again for you in the future.
  4. Integrity. Medicare is a very highly regulated marketplace and the only agents you should consult are the ones that abide by the rules. For example, an agent is not allowed to cold-contact you – period. If you have not approached them first, they may be non-compliant and may be less ethical in other areas too. Agents are also prohibited from cross-selling at a Medicare appointment. You can discuss other topics such as life insurance or annuities but only at a second meeting completely separate from one about Medicare.

Other important criteria when selecting an agent include:

  1. Home visits. The best agents understand about mobility challenges with those over 65 and are willing to visit you in your home if you prefer.
  2. Back-office support. When an agent is able to offload much of their administrative workload, they can better serve you. A good agency will have deep relationships with the carrier representatives and can better help their agent help you.
  3. Year-round service. It is not uncommon for an insurance carrier to offer a call center as your resource for resolving issues but this can be a very frustrating and inefficient process. Much better is to find an agent or agency that will work to solve problems for you whenever they occur and not just come around when it is time for policy renewal. The best agencies often have existing relationships with providers and can be more effective on your behalf.

How much will a good agent cost me?

Nothing. The best part about using an agent to help you is that you are already “paying” them. Compensation to agents is built in to the premium costs of any policy you buy and you should never be asked to pay them directly. Even a “Zero-premium” Medicare advantage plan includes their commission.

Further, compensation for a policy sale is consistent across carriers… whether changing to a new plan or renewing the existing plan, the incentives are the same. These safeguards are designed to eliminate any reason to switch out of an otherwise good plan or to prefer one carrier over another based only on commission amount. The generous compensation for renewals (about half of that for a new enrollee) means that your agent should also have good reason to keep you happy with your policy decision so that you list them as your agent the following year.

To find an agent to help you, the standard methods are a good place to start: Search online or ask a friend for a referral. Also, many agents host workshops at this time of year so if there are some that look promising, use the checklist above to narrow down your list. Whatever method you choose, and whether you are new to Medicare or have enjoyed it for decades, consider “hiring” a professional this year.

Benjamin Goldberg, a financial advisor at Enlightened Advisors Wealth Management LLC in Tucson, is not currently certified to sell Medicare policies.