8. Living a lemonade life

Zack Friedman is the author of The Lemonade Life and the founder and CEO of Make Lemonade, a leading personal finance company that empowers you to live a better financial life. Zack is a sought after speaker, writer for Forbes, and has an extensive and  impressive professional resume. Zack has degrees from Harvard, Wharton, Columbia, and Johns Hopkins. Zack talks to your host Scott Vance about some ways to survive transition from military service, gives his opinion on the recent stock market swings and talks about the fact that a decision making process is essential to ensure a happy life.

7. Life and health insurance

Sa El got started with insurance when his grandmother passed away from cancer and did not have any life insurance.  He is the Co-Founder of Simply Insurance and a licensed life & health insurance agent with over 11 years of experience.   Sa's goal is to give accurate insurance education along with an easy insurance buying process.  He began working on Simply Insurance once he realized that customers wanted an option to purchase insurance, online, without an agent.  He has been mentioned in publications such as Forbes, Insurance News Net, The Ladders, & The Simple Dollar. In his free time he enjoys listening to Opera and Classical music, reading Webtoons and Manga, watching Anime or playing videogames.

6. Having the Talk

When’s the last time you sat your parents down and talked to them about their money? If you’re like most people, it probably hasn’t happened yet and you probably have no plan for it to happen in the near future. Talking to your parents about their savings, their will, their hopes for what happens when they get older or after they die is unpleasant but as today’s guest shares is vitally important.  Cameron Huddleston is an award-winning journalist with more than 17 years of experience in the personal finance field.

Cameron’s experience taking over her mother’s finances after her mom was diagnosed with Alzheimer’s inspired her to write a book on how to discuss finances with parents before it’s too late. It’s called Mom and Dad, We Need to Talk: How to Have Essential Conversations With Your Parents About Their Finances.

Her articles have been published in Kiplinger’s Personal Finance, Business Insider, Chicago Tribune, Fortune, Huffington Post, Money, MSN, USA Today and more. She’s the current Life + Money columnist for GOBankingRates.

5. Getting a little help with the Survivor Benefit Plan.

Kate Horrell is a nationally recognized leading expert in the Survivor Benefit plan. 

She is a military spouse, mom and wife.  She loves speaking about military specific financial topics and educating fellow servicemembers and spouses on ways to achieve financial success.  Kate educates the public through her writing.  She has written 2,200 blog posts for  Military.com’s paychcheck chronicles blog and continues to educate through her personal blog at www.katehorrell.com

Survivor Benefit plan link

Kate Horrell Survivor Benefit Plan Blog Posts

4. The Blended Retirement System

In our fourth episode of the sheepdog financial podcast we do a deep dive into the blended retirement system.  One of the key benefits of the military is the retirement.  The retirement system used to be a simple 20 years and out pension.  The National Defense Authorization act of 2016 changed that and created a new retirement system for military members.  The new Blended Retirement System (BRS) blends the traditional legacy retirement pension, also known as a defined benefit plan, with a defined contribution plan known as the Thrift Savings Plan (TSP).  The BRS went into effect on January 1st of 2018.  The BRS significantly changes the military retirement system and for many will be their first opportunity to save and plan for their retirement regardless of how long they serve. 

3. Transition and landing on your feet

In our third episode of sheepdog financial podcast we have one of the nation’s leading experts in career transition for veterans and public service professionals. Matthew J. Louis is a graduate of West Point and retired Lieutenant Colonel, having spent more than 25 years in uniform and 20 years in the corporate world. Today he leads global strategy and transformation projects at Deloitte, the largest professional services firm in the world, and continues to serve several veteran collaboratives around the country. Matt is the author of Mission Transition, a practical guide for veterans in transition and their employers. He coaches individuals on their transition efforts and advises employers on hiring programs designed to successfully assimilate these valuable talent pools.

2. Buying a home

In the second Sheepdog financial podcast we have Erica Anderson. Erica is the owner and broker of Team Anderson Realty located in Holly Springs. Erica’s is an expert in buying and selling real estate. Listen as she talks about some of the local and national trends affecting home buying. Then gives good advice on how to buy a home, how to sell a home and the value of using a provider such as an agent or home inspector. I hope you enjoy Erica’s advice and expertise.

1. Health insurance for military members

Welcome to sheepdog financial. You will get answers to your financial questions. Learn to plan for your financial future and have the type of life that people dream of brought to you by Trisuli financial advising, a fiduciary financial advisor practice focus on military members and their finances. Your host of sheepdog financial is Scott vance.

SV: Welcome to the first episode of the sheepdog Financial podcast today.

SV:  Today we are lucky to have Daniel Roberts she will be speaking to us about Medicare and health insurance. Daniel is the co owner and vice president of boomer benefits, a Texas based insurance agency specializing in medicare insurance related products. Her agency ranks among the top national medicare supplement providers working with big companies like blue cross blue shield, Aetna, Cigna, and others. A recognized Medicare expert Danielle was a member of the Forbes Financial Council and frequently writes Medicare articles for forbes.com be sure to listen to as Danielle gives us an update on health insurance landscape. As it stands today, she speaks about tri-care and specifically about tri-care for life's integration with Medicare for military retired folks. She also addresses the health insurance alternatives for military members who don't retire and give us some tips and tricks of HDHP's aslo known as high deductible health plans and HSA's healthcare savings accounts. Lastly, she explains the often misunderstood coverage that Medicare provides for long term care.

SV: I'll let you in on a secret. It doesn't cover longterm care. Listen closely as she explains the difference between the Medicare covered short term care and the private longterm care insurance. Covering longterm care is a co owner with her brother and vice president of boomer benefits. It's insurance [inaudible] specializing in Medicare products based out of Texas. Boomer benefits aims to educate Medicare beneficiaries about their supplemental insurance options so that they can constantly choose the insurance plan that best fits them. Danielle is a recognized insurance expert. Uh, welcome Daniel to my podcast.

DK:Hey there, Scott. I'm so excited to be here with you on your inaugural podcast. Awesome. Yeah, yeah. I chose to have insurance because medical insurance is a huge thing with military folks. Oh yeah. That transition can be really tough and go on from the tricare to some other civilian form of medical insurance can be quite a shock for us for sure. And then Medicare is confusing anyway, just even for anyone when you add the whole military element, I get it. It's confusing stuff. Sure. So sure. So tell us a little bit about yourself. Sure. So I am an insurance, didn't know when I began the agency that we would end up in the medicare sector, but what happened is we were working in group and individual health markets back in 2005 and we had a lot of people asking us about their parents. So we would finish up with helping them with their normal under 65 insurance for their families, a lot of self employed people. And we would get people saying, you know, this seems pretty straightforward, but I'm trying to help my mom with Medicare and my dad with Medicare. And wow, this is really crazy confusing. How do we do get this done? And after heard that complaint a few times, then we went and learned Medicare and found that low. And behold, it is absolutely one of the most confusing beasts on the entire planet. And we studied it and got to know all the different pieces and parts and started helping people with it. And over time it slowly morphed into our primary product here at our agency. So now almost a hundred percent of the business that we write is related to Medicare. We might do a little bit of dental and some supporting products like that, but as you can imagine, a lot of what we do is not just the insurance piece, but educating people on how Medicare works, what it covers, what it costs, because these are the things that nobody knows when you don't spend your life on a national health insurance program. And we are striving to be out there in front of baby boomers to make this transition a little easier for them.

SV: Sure, sure. So I'm sure with everything changing in the health insurance landscape today, why don't you give us an update kind of where we stand as far as ACA, Obamacare, kind of those things that are changing coming down the pike.

DK: Yeah. And, and probably will continue to be changing right here as we head into another election next year. No one really knows what will happen. But for right now, the lay of the land is the affordable care act. And so if you don't have insurance through an employer or the military before you get to age 65, you can buy insurance on the healthcare exchange. So the easiest way to get there if you need a plan is just go healthcare.gov and this is where now anyone can apply. So back when I started my agency, if you wanted to buy individual health insurance for yourself under age 65, you would apply for that. And if you had health conditions those would either be preexisting and therefore not covered or they would make you declinable, which means insurance company doesn't have to cover you. So when the affordable care act came along, this improved this of course, because now everyone is eligible to purchase the insurance. But because the insurance companies now then have to take on people who have preexisting health conditions, it's made the insurance very expensive. So, especially for the group of people that I work with a lot who are 63 64 getting ready to age into Medicare. If they don't have insurance through an employer or like your folks military, then they're out there buying these individual health insurance policies on the exchange. They may have a subsidy from the federal government that makes that insurance more affordable if their income is below a certain point. A lot of people with just kind of standard middle income don't qualify for that and so they might be paying 00012001400 dollars a month for insurance before they become eligible for Medicare and they're doing that with six and $7,000 deductibles just to be able to make it as fordable as possible. So it's not a good situation in the premiums monthly premiums piece, but it is good that anyone can qualify for this no matter if you have a health condition that's existing or not, you just have to apply during a valid election period. There is an open enrollment for the ACA plans every fall and you can get into a plan at that time.

SV:Sure, sure. So that sounds good. So right now we're going through, you know, the lead up to our election and we've heard people talking about Medicare for all possibility or does that make sense to you?

DK:  So I think that there's probably some middle ground in there, which is a more likely possibility. So Medicare for all the way that Bernie Sanders proposes Medicare for all would be a single payer national health insurance system where everything is free, you don't pay any premiums for it, there's no copays at the doctor, there's no copays for prescriptions. And that's not how Medicare exists in its current form. So right now, people who are eligible for Medicare, and this is close to 60 million people, they have this health insurance and it is a national health insurance program. If you think about it, it's just for people age 65 and older. And for some people that are younger due to a disability, but they pay premiums for Medicare and everything is not free. Medicare covers about 80% of their costs and they're going to have copays and deductibles and coinsurance that they pay. So I think the challenge would be to figure out, we have medicare already growing broke. Um, with the way it is now, where people were the 60 million people who are on it are contributing premiums. How do we go to a system where we're providing insurance for 300 million people and charge absolutely nothing for it and have no cost sharing whatsoever. This would be something that would be pretty hard to pass I think because if a tax increases, there's another proposal called Medicare 50 where you would be able to buy into Medicare as early as age 50 and what this does, it solves the problem of people who are either laid off earlier than they expected or they're doing a late career transition or they want to be self-employed, but they can't quite afford the insurance premiums on the ACA. Being able to buy into the Medicare program at 50 and pay some premiums of course to get into, but maybe premiums that are nowhere near as high as what you would spend on the affordable care act. That bill would be a sort of a stepping stone and maybe that's more likely to be something that will be passed here in the next couple of years that could later lead to something like Medicare for all. I do think that's sort of the inevitable. Ultimately we may end up with some type of national care system because that's just what the rest of the world has, but I don't think it's probably something we're going to see enacted here in the next year or two. But Hey, let's circle back two years from now when you're on your a 600 episod. Maybe it'll be your hundredth episode, but we'll see where we're at. We can compare notes.

SV: Yeah, that sounds, uh, that sounds like a plan. I don't know what the way our politicians were. We'll see where we get with this.

DK:Yeah, that's right. They're going to keep us on our toes, aren't they? Yeah. Yeah.

SV:So one of the things you mentioned was military folk coming out, you know, tricare for life and then transitioning into Medicare. A lot of us are probably not real familiar with that. So specific for Tricare, for life to Medicare, how does that whole transition work?

DK:So whenever you become eligible for Medicare at age 65 you can enroll in tricare for life. And what that is is a medicare wrap around coverage. So Medicare, what we call original Medicare is made up of parts a and B and you would enroll in those as you turn 65 and then you get tricare for life to sort of function as your medicare supplement. So why that's great for people is that an ordinary citizen who is not in the military like myself, come from a military family, but I'm not a vast military member myself. I would be buying a medicare supplement or a medicare advantage plan, some sort of plan to help me fill in those deductibles and copays and coinsurance that are not covered under Medicare. The gaps in Medicare, and these shouldn't be scary to anyone because if you think about any insurance you've ever had in your life, people are used to having deductibles on certain things or copays and certainly on the military, those copays are far lower than what you would find in the private insurance market, which is good, but people know that you know everything isn't completely free once we get onto Medicare.

DK: So you buy a medigap or medicare supplement to cover some of those items that normally you would have to pay. Well, people who have tricare for life don't have to enroll in a medigap plan because the tricare for life can be supplemental coverage for them. So the most important thing to know about that is you have to have both Medicare parts a and B and about 99% of all people out there have paid taxes throughout their working lifetime that have gone to pay for prepay for their medicare part, a hospital benefits. So when you turn 65 typically you're not going to pay anything for Medicare part A. However, part B, which is your outpatient coverage, the current premium for that is $135 and 50 cents a month for the standard base premium, which is about 95% of all Medicare beneficiaries pay that. If you happen to be in a higher income bracket, then you might pay more for that. But most of the people that we see that are electing tricare for life, they're paying that medicare part B base premium $135.50 a month, and then that covers 80% of their outpatients insurance and the tri care, uh, wraps around that and covers all of the deductibles and copays and coinsurance that normally you would need a medigap plan to pay for. One great thing about tricare for life is obviously it's going to include drug coverage. So what's good about that is you would not need to enroll in Medicare part d, like in drug. So medicare part d is The pharmacy program under Medicare. And if you want to have help with your cost of your prescriptions, your average American is going to sign up for a part d plan. And you might pay anywhere from $10 a month for a plan like that to well over $150 a month depending on the plan's formulary. And people try care for life. Don't have to worry about that because you're going to have those drugs already built into your tricare for life benefit. And so you would not need to go ahead and sign up for separate part d insurance. I really think that it's great for people who are in the military because they're already used to tri care and then that work there and the contracted providers. And so only thing that's really changing is that tri care becomes your secondary insurance and Medicare is your primary. And when you put the two together, it's pretty powerful. Powerful insurance. It's very comprehensive. And typically when we're dealing with someone that has tricare for life and Medicare, we tell them, take it and run for the hills. You don't need to sign up for any additional medigap plans. You don't need to buy any additional supplemental coverage. Um, some people with tri-care will look at, sometimes we get them looking at the Medicare advantage plans and that might be because they want to have an additional way to get medications or they want to have a network of civilian doctors that they can see in addition to the tricare for life. But I actually, although I'm probably talking myself out of sales when I do that, I actually try to encourage them to just stick with the standard tricare for life because that's a great network of providers and there isn't really a lot outside of that that you're going to be able to add to that package. So unless you have a problem with the network, then there's no reason for you to need to enroll in anything else. Okay.

SV: Very good. Yeah. Tricare for life is, so far my experience on it has been, I like it. Um, yeah, of course I don't have anything really to compare to, but uh, just, just on my observation compared to some of my friends and family, it really makes, it's really an easiest system to use. Yeah. So we've talked a little bit about those of us that have retired from the army, which obviously military I guess I should say. As we know, most people never retire. So a little bit of a question is integration with VA medical benefits specific to obviously medicare but also regular health insurance before you hit Medicare.

DK:Sure, so I definitely can speak to this because my dad is a Vietnam vet and he could have the option of course of just going with his VA insurance. So with VA coverage there's different levels of coverage and it's based on your means. So they're going to look at things like your income and assets and determine a level of coverage that you get. But all veterans can use the system to a certain degree. As my understanding with my own dad, when he became eligible for Medicare at 65 his first inclination was, I'm just going to keep my VA coverage because why would I want to pay for Medicare when I could just go to the local VA clinic? Well, I had been doing this for about 10 years at that time and I encourage them, dad, go ahead and sign up for Medicare parts a and B. You want to have those because if something happens and you get rushed to the hospital and they don't take you to a VA clinic, you don't want to deal with the backend stuff that's going to result from trying to get that covered. So it's good just to have that original medicare a and B so that if something like that happens, you're not running around without any coverage and you're going to have pretty good coverage for Medicare a and B. Even if you did have a hospital stay, the portion that you're going to pay out of pocket is going to be something, but it's not going to be as much as if you had gone and treated somewhere to civilian hospital and you didn't have any medicare benefits at all. So we enrolled him in both Medicare parts a and B and then I put him on what's called a high deductible plan f supplement. And this is a low cost insurance plan. I think he pays around $50 a month for it. And if his out-of-pocket on medicare were to go over a certain limit each year, which currently I think it's around $2,400, then the plan kicks in and covers 100% of his medical costs for the rest of the year. So although he would have some out of pocket on that, we don't have to worry about the fact that he would spend hundreds of thousands of dollars. And also, um, I did enroll him into a medicare part d drug plan. And this is something I would recommend for veterans even if they don't do the part B, they don't want to pay the premium. For Part B, you could at least get a part d drug plan because although the VA does cover medications, it doesn't cover all medications. And so sometimes you might have an expensive medication that you need. Like we see a lot of these with diabetes where you might need a medication that really works for you. That's $400 retail costs. And the VA has plenty of medications to treat diabetes, but they're more generic medications. And if you've got something that's working for you that's keeping your blood sugar in check, you're not going to want to change to something else just because the VA doesn't offer that medicine. So you can pick up a drug plan. I think they want to have my dad on his round $30 a month. And this was perfect because he did end up having two medications that would have cost him about 700 plus dollars out of pocket and he's able to get them for $41 a month on the pa drug plan that we chose for him. So I'm a proponent of making sure you're covered it kind of across all your bases. And another thing to consider for veterans is what is the wait time like in the clinics and your area? So in some areas there's not a problem, but there's others where you'll go and you wait five hours for an appointment. Well, if that's going to, you know, make your hair fall out, then it's kind of Nice to have some backup coverage that you can use without breaking the bank. So we like that for people in the VA and for people under 65 that are not on Medicare. Kind of the same thing. You could pick up an affordable care act plan and you can have that as a backup and you know, you can either use the VA or use your ACA insurance provided that you can find one that's affordable for you.

SV: Yeah, I know I don't, I've got a couple of VA medical benefits, but I don't bother to go to the VA hospital just because of the times and it just, it's just easier to stay with my tricare for life and doctors that I'm used to and deal with it that way. Pay those, those little premiums or excuse me, deductibles that go along with it.

DK: Exactly. That's a perfect example of what I'm talking about. Just, you know, to have this something else that you can use. So if there's an emergency, you know, you're not waiting around for an appointment.

SV: Sure. So, yeah, so we talked a little bit about VA medical benefits and Medicare is, like I said, a lot of military folks will get out of the military, uh, and they'll have to deal with civilian health insurance. Um, being in the military we're used to acronyms, but some of the acronyms with health insurance like HSA is, and Cobra, um, confused the heck out of us. Uh, so can you talk a little bit about civilian health insurance and what, what goes on there for those that actually make that break from the military? Uh, I'd have to look at civilian health insurance.

DK:Yeah, you got it. So you've got the military lingo down, but the insurance lingo, nobody wants to learn back. Right. It's not an exciting stuff. I'm, let me tell it to you in a quicken easy ways to try to make it as painless as possible. So an HSA is a health savings account and if you enroll in a high deductible health plan, which you can get a lot of times through certain employers, you can also get them, um, through certain ACA plans. So as long as you have a plan with a high deductible and it's an HSA qualified plan, you can go and open up this health savings account and you can do it either. Sometimes your health plan will have a certain group that they deal with, but you can also go right down to your local bank. I mean, I bank at Chase, I could open my HSA there and this is an account that's tax advantage. So the money that you contribute to it right now is the top of the line. Write off for you at the end of the year on your taxes. And in 2019 you can contribute 3,500 a year as an individual, 7,000 a year as a married couple and an extra thousand dollars a year if you're 55 or older as a catchup contribution. And I know a lot about this plan because this is exactly the insurance that I have for myself as an entrepreneur. I'm always looking for tax breaks because I pay a lot of taxes being a business owner and I can contribute $7,000 a year for my husband and I into my HSA. And that reduces our taxable income by the 7,000 that I put in. So I'd never pay taxes on that money. And I get this little debit card that comes along with my HSA account. And so when I go to the doctor, I can just swipe my card and I can use money that's in that health savings account to pay for qualified medical expenses like deductibles, copays, coinsurance, as well as dental vision and hearing expenses. Um, and those can be paid for them with that tax free money. So if you think about it, if I, if I have something medical that costs me 100 bucks and my tax rate is say 30% when I use that HSA money to pay for that service, I'm really only paying $70. So this is something that's really good for savings. And I like it even better than an IRA, Scott, because when you turn 65, you can take that money out of your HSA account with no penalty, even if you don't use it for medical. So you could be saving up money in this account. You can invest the money, it compounds and earns interest over time. And then if you get to age 65 and you've got say you know, 30 or $40,000 saved up in there I would recommend that you keep it kind of as your medical nest egg and you can use it to pay for your medicare part B premiums. You can use it to pay for all of your dental vision and hearing expenses with that. Medicare doesn't cover in your, in your years that you're older, you can use it to pay for your immediate family members if they need any of those things. And so it's really great to have that as a something just money that you can spend down on medical expenses in your retirement. But if you had a lot and you just weren't using the money for medical expenses, well then you could just pay ordinary tax on it and use it for whatever you like. So no penalties like you would get for say, an early withdrawal or nonqualified withdrawal from an IRA. So all around, totally loved the HSA plans. You just gotta make sure that you have the right type of account, right type of the health insurance, I should say, to be able to purchase or enroll in an HSA plan. Now for people on Medicare, medicare is considered a type of health insurance. So once you enroll in Medicare, you can no longer keep contributing into that HSA account, but you can spend down the dollars that are in it for all of the things that we talked about that are medically qualified. So that's kind of your first acronym, which our HSA is a super positive thing. Now, Cobra is a law that allows you to extend group health insurance that you've had prior to leaving a job. So you might retire or leave from work and you've had this great health insurance plan and you decide that you want to pay out of pocket to extend that insurance on your own. Now when you do that, you're going to pay not only what you've been paying as an employee, but you're gonna pay the employer portion as, and a lot of times we get some sticker shock when we see that number because you might have an employer that's paying $600 a month for your coverage. Maybe your portion is only $50 a month that they take out on a payroll deduction. When you go to enroll in Cobra, you're going to pay both pieces yourself. So sometimes cobra can be a little too costly. And if you're looking at options between extending group health insurance coverage or enrolling into plan through the affordable care act, you're going to want to compare the premiums and benefits of those plans to figure out which one is going to be most cost effective for you. But it's just a way that you can extend that coverage for usually up to 18 month or some limit of circumstances working up to 36 months I believe. But that's a way for you to continue that health insurance. So if you're worried about trying to find coverage, you could always do cobra for a couple of months until you figure out what you're going to do on the private market.

SV: Sure. Cobra sounds a lot like self employed taxes where most people don't see that half that tax. And then when you go into business on your own, all of a sudden you're paying the full boat. And it's a quite a surprise. Most of my cash run into.

DK: That's right. And we see people that sometimes will be afraid of Medicare, so they'll enroll in Cobra and there'll be paying, you know, $800 a month for coverage when they could get medicare and a full coverage supplement for less than half that. So I always tell people, you know, do your research, find out what the costs are, compare it to all of your options because it would be very easy just to go with what we know. Sticking with Cobra, because it's the health insurance we've always had through our employer, we know how it works and we see a lot of people extend, do Cobra out of fear. And a lot of times they're paying a lot more than they need to. So, you know, consult with an insurance broker who can help you compare the numbers and then enroll in whichever thing's going to be the most cost effective.

SV:Sure, sure. So a little bit, we talked about preexisting conditions. Do you have any recommendations for how to deal with preexisting conditions that might put health insurance out of reach for some people?

DK: Yeah, so fortunately as long as you don't have a gap in coverage, we don't have to worry so much about the preexisting conditions anymore. So one of the things about the ACA is that when you lose other coverage, you generate what's called a special election period, which gives you essentially two months to enroll into a affordable care act plan through the health care exchange. And you won't have to worry about any preexisting conditions. So they can't look at you and say, Oh, you know, you have COPD or emphysema and we're going to rate you up 50% or we're not gonna cover that health condition. Fortunately, we don't have to deal with that anymore. With the ACA law, there's, there's no rules about that. You can't have a preexisting condition. And Medicare is the same way when you're aging in at 65 so no matter what health condition you have, as you're coming off of your prior coverage, whether that coverage is from the military or from a spouse or from private and employer that you've had, when you become eligible for Medicare, there's no health questions to get Medicare. You're just going to go down and when you turn 65 you've got a seven month window that starts three months before your 65th birthday. Last three year birthday month. That goes for the three months after and you're just going to sign right up for Medicare and there is no health questions at all. It is literally just a election of benefits that you're eligible for. So you don't have to worry about Medicare. I'm telling you that something's not going to be covered, that they're going to charge you more. And then you also have a six months from the date that you activate your part B, your medicare part B. So when you enroll in Medicare parts a and B, that part B effective date that appears on your id card, that triggers your six months to sign up for any medicare supplements with no health questions asked. So everybody has an opportunity when they come off of other insurance to either sign up for individual health insurance if you're under 65 or for Medicare in a medigap plan without having to worry about those health conditions being preexisting like we did prior to the ACA passage.

SV: Sure. So talking about Medicare, one of the things I see is people that need skilled care towards the end of their life in a rest home or retirement home. I know my uncle, before he passed, spent about a year, in the VA funded a retirement home. So what are the, how does Medicare pay for those expenses and what's what's required there?

DK: Such a great question. I'm really glad you asked that because I feel like sometimes I'm shouting this from the mountaintops, trying to let the public know that Medicare does not cover longterm care. So what Medicare does cover is short term care when you are expected to recover. So let's say that you go into the hospital on Medicare and you have a hip replacement, you're in the hospital for at least three days and you're recovering, but you need some wound care. These are things that needed to be provided by a skilled nurse. And so instead of going home, the doctor sends you to a skilled nursing facility where you are going to recover for a few days and you're going to get either that skilled nursing care, the wound care, or maybe it's physical therapy that you need to learn how to work with your new hip. There's lots of reasons why people go into these skilled nursing facilities and it can be anything from a surgery like that to something really serious like a stroke. But as long as you are recovering and you're expected to regain your independence, you have a hundred days of that coverage from Medicare. So you've got a hundred days to get in and out of the skilled nursing facility and you will have some coverage. Um, during that period when you need longterm care, meaning you're not expected to recover. So now you've entered the facility and it's because you're not able to live on your own anymore. It's, you can't perform all the daily tasks of living, like bathing, dressing, feeding, transferring from one room in your house to another, toileting. All of the things that normally you would be able to do independently. If you are unable to do two or more activities of daily living, then you're in a position where you really need longer term care than what Medicare would provide. So this is something that you would either private pay for yourself, which is very expensive, thousands of dollars a month to be in longterm care or you can spend down your assets and apply through your state to get a medicaid bed, which is usually not a good situation because you don't necessarily get to pick the hospital or skilled nursing facility that they're going to put you in. It's a semiprivate rooms so you share that room with someone else and you also have to spend down all of your assets so it leaves you in a position where you're not leaving things behind that you may would rather have given to your children or grandchildren. So a lot of people will look at longterm care insurance. This is type of insurance that I do not sell, but that I have purchased for both of my parents. And I think it's important because they say that statistically one out of two people is going to need some type of longterm care and you might need that for a few months but you may also need it for a few years. Now I will say if you do have military background, some people who have like VA coverage can qualify for help with the cost of longterm care through the VA. I know that we did this for my grandfather who was a World War II vet and I want to say that we got like $950 a month for the cost of his assisted living facility through the VA getting that longterm care. So that's another route that people could go. But if you don't have that, you want to look into longterm care insurance in the sweet spot for buying. That is typically in your late forties through the year, age fifties so say from age 48 to maybe 58 this is a time when is considered a good time to apply for longterm care insurance cause you're still young enough so that the premiums are not going to be that high. But you also were hopefully healthy enough to be able to get it because you are going to have to answer some health questions. You can't go out and buy a longterm care insurance if you already have dementia or something that's making you unable to live by yourself. So that's coverage that you want to check into before that day comes. And just be aware that Medicare doesn't pay for it. So this is one of those costs of health care retirement that we need to be preparing for ahead of time. There was a fidelity study that said this'll be approximately $300,000 for your average 65 year old couple that they'll spend on healthcare expenses in retirement. You know, we're living longer these days and we used to, and a piece of that is that longterm care. So you know, the more planning you do, the better.

SV: Yeah. Longterm care seems to be an essential thing nowadays, especially once you have that insurance, that longterm care insurance, there's some additional choices you get to make such as possibly staying at home and having skilled nursing care come in as opposed to going to, you know, the old rest homes that we all think of.

DK: Yeah. That's something that I, when we purchased my parents policy, we bought the type of policy that allows you to choose, so you can use the funds to either have someone come in and help you stay in your own home or you can use it toward a facility. So that's a great point because I think some people say, I never want to live in a place like that, so I'm not going to buy that insurance. Well, you know, that insurance might be what allows you to stay in your home for a few years longer than you otherwise could have because it'll pay for that skilled person to come out and help you, not just with your skill needs but also with some of the custodial care of like, you know, cleaning up and making meals and those kinds of things. Yeah.

SV: Some of the other things like some of the things I've seen is they allow you to ensure both the husband and wife and whoever uses it first is the one that uses it. Um, that helps to alleviate some of the concerns people have with buying insurance and never using it.

DK:  It sure does. Yeah.

SV: Okay. Well at this point I don't have any other further questions.

DK: I know that it's not the most exciting topic, but I'd be happy to answer any further questions that your listeners have down the road. Um, I know that these are the types of things that even when you listen to a podcast, you might hear it and it Kinda gets filed away for a rainy day. But it is good information to learn as early as you can.

SV:Yes. Well, thank you for your time and we look forward to hopefully you have any back again.

DK: Yeah, I appreciate being on here. Thanks so much. Thanks a lot.

SV: We've just begun to scratch the surface with health care and I look forward to having Danielle back update us as his health insurance life landscape changes. You could find out more about Danielle by presenting her website, boomer benefits.com also on the show notes, you'll find additional resources to help you as you navigate the healthcare landscape. If you liked this episode and would like to hear more, please subscribe to us. You produce some release the show on a weekly basis, and we'll have future episodes between real estate experts, choose stories of successful military transitions and financial experts who will help you navigate your financial life. Thank you for listening to sheep dog financial. Visit us online@trishleefinancialadvising.com for more military centered financial resources.