[00:00:00] Mark Elliot: Welcome back to The Retirement Income Show. I’m Mark Elliot, with the CEO and founder of Oak Harvest Financial Group, Troy Sharpe. Troy, of course, has a phenomenal YouTube channel. Over 300 videos on there, about anything you can think of. Financial, retirement wise, questions you may have, concerns you may have, there’s a video probably on the exact topics. You can subscribe to this channel for the monthly fee of $25,000. No, wait. Troy’s, no. There’s no cost. You subscribe for free.
It’s Oak Harvest Troy Sharpe, and you can find all those videos. You can always go to the website to learn more about Troy and the team, oakharvestfinancialgroup.com, if you have any questions. Today we have Grace Gosnell, from Scoop Health, which is medical cost sharing. We’re learning about that today on the program. You can always call Troy’s team if you want to learn more. It’s 1-800-822-6434. 1-800-822-6434. Of course, if you want to find out more about Grace’s company, scoophealth.com. Scoophealth.com. Her YouTube channel is Health Benefits Network. There you go. We’ve given you a lot of information.
Grace, one of the interesting parts of this is, and I know Troy’s going to get into what happens if, am I still going to get coverage or not? We’re going to get into some of the downsides of the medical cost sharing. More and more people are retiring before the age of 65, and we know to go out and buy your own health insurance can get super expensive. Let’s say I retired at 55. Is this medical cost sharing maybe a nice way to get to Medicare age of 65, maybe a little bit financially better off?
[00:01:28] Grace Gosnell: Oh, absolutely. We use the term, the bridge to Medicare. We’ve all got to get there. This is a great interim step to help preserve a little capital along the way. Not spend so much each month. Keep a little bit of that hard earned cash in the bank so that you do have more when you do hit 65 and you’re able to hop onto Medicare. That’s a great time, but obviously, we don’t want people to run out of money shortly after they retire. That’s a great way to help keep a little more of that in the bank.
[00:01:54] Troy Sharpe: It’s markets. What we do on the retirement planning side when we look at planning for income in retirement and taxes in retirement. Grace, what’s really cool about the medical cost sharing, and again, we’re going to get into the big ones, the big questions that people have. People just want to know, “Hey, if I get really sick and have a million or $2 million of hospital bills or cancer, am I going to be okay?” Those are the big questions.
Before we get there, when we look at from a planning standpoint, a financial planning standpoint, when we look at the choices that we have, if someone has all of their money inside a 401(k) or a retirement account, when they retire, let’s say it’s at age 60. To pull money for living expenses out of that account, it all goes on the tax return. If the income is a certain level, now we’re in a special window right now, because of COVID, they’ve increased the amount of income somebody can have, or a family can have. It used to be, I believe, 400% above the federal poverty line, which still isn’t a ton of money, but now they have increased that a little bit.
Even up to $100,000 of income, you can get a small subsidy right now, but it’s not going to be like that for long. I think next year it goes back to 400% to the federal poverty limit. My point is, if all of your money is in a retirement account, and you start withdrawing because you retire at 60, it’s very easy to be above the income threshold that allows you to qualify for any type of subsidy, which creates health insurance premiums for that person. $1,000 per month, per person. If you’re married, maybe $2,000 per month, possibly more. That’s just for premiums. Not out-of-pocket costs, prescriptions, deductibles, copays, et cetera.
If somebody can do more financial planning, and I’m talking about maybe we take money from the IRA and we convert it into the Roth IRA, we don’t have to worry about the income tax level, or the amount of income that goes on the tax return to qualify for a subsidy, because through medical cost sharing, the costs are already reduced significantly on a comparative basis to somebody who, at that age, may be on health insurance.
I guess my main point there is it opens up. If someone is comfortable, and they do their research, and they investigate, and they feel comfortable with their situation and the medical cost sharing community, it opens up a ton of opportunity for us to do income planning and tax planning and really create a more robust and sound retirement plan.
[00:04:26] Grace: Exactly.
[00:04:27] Troy: It ultimately does come back to not only more capital in their accounts, for producing income later in life, in retirement, but it also allows us to do more strategic planning from the tax side, such as Roth conversions, and many other things as well. Transitioning into the big questions that people have, so we have– For those just tuning in, we have a monthly contribution with medical cost sharing, similar to a premium, but typically, I think you said, what was the percentage you see on average?
[00:04:59] Grace: 30% to 50% less. I’ve seen it even higher.
[00:05:03] Troy: On average, 30% to 50% less than health insurance premiums, possibly even higher. This is on average, what you see. Then you have an initial unshareable amount. You can have up to three of those, per year, and you get to choose essentially anywhere from 500 to $5,000, how much your unshareable amount is. That is similar to a deductible in health insurance. If you choose the $5,000 one, you could theoretically, if you have three completely separate and distinct healthcare instances, you could typically have up to 15,000 in out-of-pocket costs.
If you have one, for that year, then it is capped at the 5,000 there, on the initial uninsurable amount. Just creating the groundwork here, for what we’ve discussed, for those just tuning in. Now, let’s say someone hits their uninsurable amount. It’s one big cancer diagnosis, and they want to go to Memorial Hermann, which is one of the top hospitals here in Houston, for cancer care. Houston, we have an amazing medical community. Those in Houston know this. Those watching on the YouTube channel may not be aware, but one of the best medical communities in the entire world.
They want to go to Memorial Hermann, let’s say. Just as an example. Can they, through medical cost sharing, expect to have treatment for their cancer to save their life, and can they go to Memorial Hermann? Do they have to go to a hospital that’s more in-network, to use health insurance lingo?
[00:06:35] Grace: Yes, it’s a great question. It’s one of the best parts about medical cost sharing. It’s one of the reasons why people love it, is we do not steer people to a network. You’re free to go get care from whichever doctor, provider, hospital, whatever it might be, that fits your needs the best. We do not steer, we believe that patients, again, should have that direct relationship with their doctor. They’re a consumer, again, and they get to choose, just like we all should, where they get to go seek out care.
If that’s Memorial Hermann, if that’s MD Anderson, whatever that looks like. Particularly if it was something really out of the box. Maybe MD Anderson’s the right choice. Maybe they’re doing something experimental, that’s new. We really do believe that patients should be able to direct their own healthcare choices.
[00:07:19] Troy: I said Memorial Hermann, great hospital.
[00:07:22] Grace: Great hospital. Yes.
[00:07:22] Troy: I was referring to MD Anderson.
[00:07:24] Grace: Oh, they’re both fantastic.
[00:07:25] Troy: Yes. When we look at the costs, okay, so let’s say it’s going to be a million dollars for treatment. How does that work? Is there fine print that could exclude somebody from being covered? The guidelines, how does that work when you have this really, really big expense for something like cancer, comes out of the blue, what can somebody expect to that experience to be like?
[00:07:49] Grace: Just because it’s something large, we don’t exclude those. Those do come up in life. We look at everything as a bell curve, and so we’re going to see stuff that maybe people pay in for a long time, and they’re healthy as a horse. That’s fantastic. We’re also going to have people who are going to have cancers, we’re going to have heart attacks, we’re going to have all kinds of expensive care that does come up. Just because it’s expensive, we don’t exclude it. The medical cost sharing guidelines are robust, and they spell out what’s shared, and it’s in big, bold letters. We want everybody to read it, we want everybody to feel comfortable with it, and know exactly what they’re signing up for.
There are going to be things. An obvious one, cosmetic surgery. If it’s purely cosmetic, it’s not going to be shared. That’s a pretty obvious one, but it’s spelled out, because we think it should be. Things like cancer and heart attacks, those things will come up in life. It is inevitable. When you get enough people together, the statistics don’t lie. After a certain amount of time, you start to learn. We’re going to have this many cancers a year. We’re going to have this many heart attacks a year. We’re going to have this many premature babies each year. We’re going to have those things come up, and so we prepare for that.
[00:08:57] Troy: What about exclusions for treatment, or for example, with health insurance, certain things aren’t going to be covered. If they’re new treatments, or if the health insurance company doesn’t deem it a necessary requirement for you to receive that prescription or that drug or that treatment. Does that take place in the cost sharing community as well?
[00:09:17] Grace: Largely, we say that if it is treatment that’s prescribed by a licensed medical provider, thus that’s what we consider sharable, generally speaking. Of course, the pre-existing thing does come into play. We even see with alternative medical treatments, some of those we say, those may not be shared right off the bat. Things like, say acupuncture, for example. We will also work with members to say, “Hey, if you and your doctor can provide us documentation that shows that this is beneficial, and this is a good treatment, we’ve got a medical director who will review it.”
We’re not opposed to saying, absolutely not, but we’ll review those things that are alternative. Maybe they’re very cutting edge and new, and it’s not regulated as a best practice yet, but we will look at those things. Generally speaking, if it’s licensed medical provider recommended, that’s going to be a shareable expense.
[00:10:08] Troy: If someone listening to the show right now, or watching on YouTube, if they start Googling medical cost sharing, and bad experiences with medical cost sharing, and someone getting left out in the cold for medical cost sharing, because there are hundreds of networks out there. If you speak directly to the consumer, what do they need to know to look out for? Are there, without getting specific, I guess, on names, but putting yourself in the consumer’s shoe, who this is a completely and entirely new concept, what should they look out for? How should they know if they can trust the cost sharing community, or a certain network, or a certain platform, to entrust their health care to?
[00:10:53] Grace: Yes, it’s a big decision. There always will be stories where somebody had a bad experience. I think that’s inevitable. We see, with some of the cost sharing communities, I always encourage people to read the reviews, because the reviews don’t lie. When you see a lot of really great reviews, you might see one or two bad ones. Yes, I always take those a little bit with a grain of salt. It was maybe there was something that they tried to hide. We have seen people where they didn’t disclose that they had a pre-existing condition, and then they did need some expensive care, and that fell back on them, because they weren’t open and honest about it.
I generally think, read reviews. I always tell people, the membership guidelines are posted on their websites for a reason, read them. Do not sign up for one without reading those. Don’t sign up for these cost sharing communities without talking to somebody on the phone first, because they’re going to go through it with you. They’re going to answer your questions. Make sure that you are asking the right questions. People sometimes say, “What haven’t I asked you that you think I should know?” I think it’s the greatest question. We’re really open and honest with people about that, because they need to do their homework, because it is a big decision.
[00:11:56] Troy: Yes. When we look at the reviews, and that’s one of the best things about reviews online today is, it really creates transparency in regards to the consumer experience with that service or product. Of course, you’re always going to have that one person or, for example, with what you said, someone who is basically fraudulent with their application, which I don’t know if it’s a crime in the health or the cost sharing community, but in the insurance world, absolutely. If you lie on your application, you will be denied.
[00:12:30] Grace: Later on down the road. Yes, of course.
[00:12:30] Troy: You will be denied later down the road. Yes, that’s great advice. Anything else as far as a list of questions that either Scoop Health or the Health Benefits Network? Do you guys, whenever you get asked this question, what do you say? Let’s say I asked you, what questions haven’t I asked? One of the things that was very attractive about the cost sharing community whenever you and I talked prior to this was, you said you get that question all the time. You actually walk people through the questions that they should be asking, and give them information to really research on their own, to learn if this is possibly a good fit for them. What are some of those questions?
[00:13:11] Grace: Yes. I always encourage everybody to ask. If you even think something might be pre-existing, but you’re going, “Oh, gosh, it’s nothing.” Ask about it. Ask how that would work. Ask how it would be dealt with. We talked a little bit earlier about, how do I know that there’s going to be enough money to pay for my medical bills and things like that? Ask that question. How do I know that when it’s my turn, there’s going to be something in the bank to take care of me? These are great questions to ask. That one’s a particularly interesting one. I think some of the communities do a better job than others of maintaining enough of a reserve. That’s an important thing to ask.
Different things like that. Just making sure that you’re really comfortable with it. Knowing, how often do they raise rates? Blue Cross raises them typically every year. The cost sharing community is typically a little less frequently. How do they determine those rates? Things like that are really important, I think, for people to know and research and really dig in on all of this to make sure that it is a good fit, and that it is something that you’re fully comfortable with, because you are trusting your health and your health care to these organizations.
[00:14:14] Troy: Grace Gosnell, she is with Scoop Health Network, or excuse me, Health Benefits Network and Scoop Health. If you have questions for her, feel free to go to the website, check out her YouTube channel. Real quick, before we go to the next, we have a break here, but someone on Medicare, is this viable for them or should they stay on Medicare?
[00:14:32] Grace: I would say, once you reach Medicare age, that’s a great path, and you’ve earned it. I think for people who are at that age, over 65, we see a lot of people shift off of this, and then move on over to Medicare.
[00:14:45] Troy: I like the way you termed it earlier, a bridge to Medicare.
[00:14:48] Grace: Yes, exactly.
[00:14:48] Troy: That’s where it gets really, really expensive, and a lot of times people stay working. This is The Retirement Income Show, I’m Troy Sharpe, here with Grace Gosnell, from Scoop Health. We will be back, for the final segment, to talk about medical cost sharing.
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