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When Can a Medigap Plan Deny You? · How to Retire on Time

• 0:00
  Mike: Hi. Mike Decker, author of the book How to Retire on Time. Here's a question I was recently asked on my Retire on Time q and a. Check it out. What I think is interesting, at least when it comes to healthcare, and this is Medicare specifically.
• 0:21
  Alright. A lot of people miss this, is we're getting sicker sooner. We're living longer than before. And when you turn 65, if you want a supplemental plan, which is kind of like Medicare with additional coverage.
• 0:39
  David: Right, yes. It sits on top of Medicare to to cover that 20% that Medicare doesn't cover. Right?
• 0:45
  Mike: Or any other gaps. Yeah. Right? Yeah. It's Medigap They're called
• 0:49
  David: Medigap plans. GAP plans, Medigap, Med Sup. All these different names. Yeah.
• 0:54
  Mike: You cannot be denied at 65, or when you leave your current employer's insurance and go into Medicare. And so, or do a Medigap plan. Now, are Medigap plans the best plan? No. They are a plan for a person.
• 1:09
  Yeah. The problem that I've got is a lot of people are saying things like, oh, everyone should be on this, or everyone should be on that, or... Those are absolutes. Do you travel? Do you not travel?
• 1:20
  These are questions that need to be had. Do you you have family illness? Like, if you already have heart issues, if you have a high chance of stroke, if you had a very stressful career. Yeah. There might be some health consequences.
• 1:36
  Getting in there when they cannot deny you is a lot easier than two, three, five, ten years later wanting to switch, then they're they're they're gonna underwrite you, and they can deny you.
• 1:46
  David: Yeah. And so you're referring to, in case people don't know, the guaranteed issue, like, period that people have. So when you're first enrolling for your your initial time going into Medicare, you can get it... You can be guaranteed to have a supplemental policy issued to you during your initial time going into Medicare. Now later, if you wanted to go into Advantage first, then switch later, no guarantees.
• 2:10
  Got to go through underwriting.
• 2:11
  Mike: Yeah. This is insurance. It's not an investment. You need to have very honest conversations with yourself. I don't know if you can actually do this easily, but get all of your medical records and look at them and see what doctors are saying about you.
• 2:27
  I don't know if that's possible. But the point I'm trying to make is insurance is transferring risk to an insurance company. If you were to figure out, hey, these are high risk things that maybe your doctor has or hasn't identified yet. Like I think it's very good to be proactive and to run additional tests. We should do this internally.
• 2:47
  David: Mhmm.
• 2:48
  Mike: We'll figure out a way how to do this in our planning process. But to figure out... I mean DNA is a very sensitive thing. I don't really want people's DNA information. Man, that's a liability.
• 2:56
  I don't want to go there. But maybe there's a way we could figure this out. To figure out any predisposition so you know, hey, there's a high risk here. Let's transfer these risks to an insurance company because they're not checking your DNA yet. No.
• 3:09
  They're not checking that stuff. And then you stay in there. Because it's not like, oh, you know, this salsa is on sale. These chips are on sale. Well, it'll probably be on sale again in two weeks or a month, and you can just buy it then.
• 3:24
  It's not like you just know that you can buy that jacket you want on, you know, the day after Thanksgiving. Like, this is insurance. They can deny you. The deals aren't in perpetuity. The coupons aren't forever there.
• 3:35
  And I don't think people fully understand that because too many people have told me and tell me, you see this differently. Well, I want to start kind of cheap right now. I'm pretty healthy, but I'll switch over later. And they think they're saving themselves money.
• 3:46
  David: That is true. That is a... Some people do feel that way. Yeah. And you can't blame them either because you can sometimes get sticker shock when you see like, Okay, I've got to pay my Part B Medicare, everybody pays that.
• 3:59
  But then I've also got to have the supplement plan premium on top of that. Oh, and then by the way, there's also Part D, the drug plan. And all these premiums start stacking on
• 4:07
  Mike: top of each other. Feels like a lot.
• 4:09
  David: Yeah. It can feel like a lot, especially if you're like, well, gosh, I'm healthy right now. I don't I don't need much. And so you might compare this with an Advantage plan that has $0 premium, and then you might be swayed. But the better approach probably is what you're outlining, which is, hey, let's think a little bit longer term here.
• 4:27
  Do I have a family history of something that might cost a lot down the road? And then you can sort of go from there.
• 4:35
  Mike: So for all those who are tuning right now going, hey. This is this is great. What's the next step? I'd say come to our workshop. It's this Tuesday night at 06:30 central time.
• 4:45
  We're hosting it on Zoom, so you can attend from the comfort of your home. Just go to retireontime.com/workshop to RSVP. That's retireontime.com/workshop. We'll see you there. That's all the time we've got for today's show.
• 4:58
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