Medicare Part D

[Snaggletoof]

How many of you have clients who come to you asking whether they need to subscribe to Medicare Part D?

I can't even spell "Part D" let along interpret it. Why is it our job to have to know about every federal agency when it is a full-time job just to keep up with the IRS??

Do any of you have a fast, effective knowledge you can pass on? If not, do you have an effective way of sending clients to someone else to get an answer? When the smoke clears, I believe this has a lot to do with insurance, and may be insured-specific.

We seem to get questions they wouldn't dare ask their lawyer -- he would charge them.

[JohnH]

http://www.medicare.gov/navigation/medicare-basics/medicare-benefits/part-d.aspx

Ron: for those who use the Internet, the official site is a great place to start. It has a link at the bottom of the page to compare plans based upon one's zip code. There is also info available tailored to the individual.

When Part D first came along, my daughter did a series of presentations to seniors in our church on the program, and she was pleasantly surprised at how many were Internet savvy. For those who were not, she impressed upon them that the MUST find a family member or trusted friend to help them online. It finally boiled down to a few who still had no help available, and she helped them through it, but she lost some sleep wondering if she had given them the best advice ( and she was working in the pharmaceutical field at that time). I added that last comment to illustrate just how stressful it can be to give advice in this area.

[PIGLEE]

I ordered The Tax Book Booklets for handing out to clients "Understanding Social Security & Medicare" They look pretty good. At least it is a quick reference you can give your clients, so you don't have to answer a lot of questions that are impossible to answer. I do have some personal experience, but I am far from understanding it all. The Social Security Web site is a real good one to refer people to.

[FEDUKE404]

NOT a tax issue!

I would never stick my own (tax) neck out advising any client as to what to do re Medicare D issues.

There are so many minefields (and doughnut holes ) present that such advice is something I would avoid at all costs.

A pharmacist client several years ago had access to proprietary (but now fairly common) in-house software that would run the options for a retiree. Information needed to create the report included the usual stuff plus the name/dosage level/frequency of every prescription medication being taken. Even then, only a "list" of possibilities would be provided.

The doughnut hole is shrinking and still varies from state to state, IIRC. The far greater issue is to see what the specific Medicare D plan will cover. As an example, let's say you are taking a daily medicine called FixIt. If your company's plan covers FixIt, you will pay the appropriate copays, and perhaps enter the doughnut hole later during the year. But if your company does not cover FixIt, you will pay full retail price for each and every tablet of FixIt you purchase. In simplest terms, a "good" plan for one person may well be a "terrible" plan for another person, merely because of the medications the plan allows through their formulary rules. Generally speaking, these issues do not arise with generic drugs but are quite frequent with some of the newer higher-priced drugs, especially those you see heavily advertised on TV.

I hope these observations are of some merit.

FE

[Snaggletooth]

Typical

Good discussion, and thanks to everyone. I feel very much like Mr. Duke - it is NOT a tax issue.

For example, John provided a link. I visited the site through the link, and don't know any more now than I did to begin with. That's not entirely true, but reading the information does not any better qualify me to answer these questions for a client than the man in the moon.

Do you get the feeling that we get a lot of questions that other professionals are better qualified to answer, but we get them because they perceive our advice is free? Well, it should be free if we don't have the expertise, but I'm thinking we just shouldn't answer them at all.

[taxxcpa]

Questions we should not answer

Good discussion, and thanks to everyone. I feel very much like Mr. Duke - it is NOT a tax issue.

For example, John provided a link. I visited the site through the link, and don't know any more now than I did to begin with. That's not entirely true, but reading the information does not any better qualify me to answer these questions for a client than the man in the moon.

Do you get the feeling that we get a lot of questions that other professionals are better qualified to answer, but we get them because they perceive our advice is free? Well, it should be free if we don't have the expertise, but I'm thinking we just shouldn't answer them at all.

People sometimes think you can handle any kind of paperwork. Once I had a client that wanted me to write a will. I told them I would write it and give it to a lawyer to re-write, which we did.

[Burke]

I had a client last year who called me up and said he was now 62 and needed to sign up for Social Security, and would I take care of that for him? Yes, sometimes we are the closest thing to a financial/retirement/life advisor they have. After all, we know all about their finances, don't we? And I guess they figure if we know tax law, we must know all the entitlement programs too. I get requests to review wills, insurance and annuity contracts, investments and Medicare benefits. I make referrals all the time.

[JohnH]

There was a very good article in the Dec 2010 issue of Consumer Reports which discussed Medicare. The title is "Medicare: How to navigate the maze". I found it very helpful and if clients ask in the future I plan to refer them to this article. I like Consumer Reports because I still believe it's the most unbiased source of info available. I follow their advice on most financial matters, especially with respect to life insurance and annuities.

They restrict the info available online, but I found a similar discussion at this link:

http://www.consumerreports.org/health/insurance/health-insurance/medicare/medicare-part-d.htm

The key to the Part D decision is to get a tailored analysis of one's prescription profile compared to the coverage available. Form that point on, it's just a matter of figuring out the relative cost tradeoff between premiums and out of pocket costs for deductibles, copays, and the "donut hole". The Medicare web site does offer this tailored analysis, as is mentioned at the end of the Consumer Reports article.

Of course, if the individual's health situation changes and they require a change in meds, then another plan may be desirable for the following year. They may also find that their out of pocket costs are greater than they had anticipated when they signed up. This isn't ideal, but compared to the fact that nobody had any prescription coverage through Medicare before Part D, everybody is better off now than they were in the past.

Having said all that, I still think it's wise to refer the client to the Medicare web site and encourage them to run the tailored analysis. There just isn't any "general" information that is going to be very useful to anyone.