Which four words decide your Medicare bill? Take-Home Notes, part two
September 29, 2026
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Show Notes
Eddie and Betty's Conversation
Welcome to The American Retirement Advisor. I'm Betty, and Eddie's here with me in the studio today, and we are diving into something that I think trips up more people than almost anything else in Medicare world, which is the vocabulary. Like the actual words.
Yeah, thanks for having me. And I know that sounds dry, but stick with us for two minutes because these are not SAT terms. These are the four numbers that determine what you actually pay next year.
Which is what Ian Schaeffer's piece is about today. It's part two of his Take-Home Notes series from the workshop, and he zeroes in on four terms. Copay, deductible, network, and maximum out-of-pocket. And he makes the case that every one of these shows up in a letter that should already be on your counter.
By September 30. It has all four of these numbers for next year. The problem is most people set it down and never open it.
Guilty. I have absolutely set a letter like that next to the fruit bowl and called that 'dealing with it.'
The classic graveyard for things we're not ready to deal with.
So let's go through them. The workshop apparently gets a laugh right out of the gate on the first one.
Because the presenter's opening line is 'Copays are copays. Everybody knows what a copay is.' And mostly, yeah, people do. It's a fixed amount. Medicare's own handbook uses the example of thirty dollars.
Whether the visit costs a hundred or a thousand.
Right, it doesn't move. And that's the whole point of a copay. You know what you're walking in with.
So where does coinsurance fit in? Because those two get mixed up all the time.
It's a percentage, not a flat number. The handbook's example is twenty percent. And that percentage grows with the bill. Which means if the bill is big, your share is big.
Wait, so Original Medicare's famous coinsurance rate, the one everyone talks about, that's coinsurance? Not a copay?
That's exactly it. And Ian Schaeffer flags why that matters: a fixed fee has a natural stopping point. A percentage, on its own, does not.
That's a little alarming when you say it out loud.
It is. Twenty percent of a very expensive round of outpatient treatment is not a small number. That's the whole reason the rest of these terms exist.
Okay, deductibles. And the article says there are more of them than people think.
That's the presenter's first line on that slide. Three words: 'There's more of them.' And then they go through the list.
How many are we talking?
Okay, so Part A has one. For 2026, it's seventeen hundred and thirty-six dollars, and that's per hospital benefit period, not per year. Part B has one, two hundred and eighty-three dollars in 2026. Your drug plan can have one, and for 2027 it can be no more than seven hundred dollars. And then an Advantage plan can add its own on top of that.
So in theory, in one year, you could be paying a deductible on your drugs AND a separate one on your doctor visits.
In the same year, yes. Not necessarily, but yes, it's possible. Which is why you want to know which ones your specific plan has.
And your plan's letter tells you that.
That's the whole point. It'll say which ones yours has for 2027. It's all in there. You just have to open it.
Fish it out of the fruit bowl graveyard.
Frame it if you have to.
Now here's the one that Ian Schaeffer says surprises people the most in the room. The network. And I want to understand why, because on the surface it sounds so simple.
That's exactly the trap. You go in thinking it's one yes-or-no question. Is my doctor in there? And you leave knowing it's four or five questions.
Like what?
Your primary care doctor. Your specialists. Your hospital. Your dentist. Your pharmacy. Each one might be on a different list.
Wait, separate lists? I thought a network was one list.
That's the twist the presenters land in the workshop. Because Advantage plans often offer extra benefits that Original Medicare doesn't cover, and the handbook names vision, hearing, and dental first. Those extras can run through completely separate networks.
So your eye doctor might be on one list and your regular doctor on another, and they're both technically 'in network' but for completely different parts of the plan.
And if you only checked the first list, you'd never know the second one exists until you got a bill.
That has happened in real life.
More than a few people have run into that. Which is why the advice from the workshop is to check every list for every provider you care about, not just the first one you find.
And Original Medicare is just, what, totally different on this?
Night and day. With it you can use any doctor or hospital that takes it, anywhere in the country. The whole network concept barely applies.
That's a meaningful tradeoff depending on what you value.
It really is. And it's the kind of thing where our advisors at American Retirement Advisors can sit down with your specific list of doctors and walk through it for your situation. I wouldn't try to do that one in your head.
No. Okay, last one. Maximum out-of-pocket. And this one has the longest definition in the article.
Because it has a lot of important edges to it. The core idea is great: it's the most you'll pay for medical expenses in a calendar year. Once you hit it, the plan pays a hundred percent of your covered health services for the rest of the year.
Okay, that sounds like a relief.
It is, and it's an Advantage plan feature. Original Medicare by itself, no yearly limit.
Wait, really? None at all?
None. And Ian Schaeffer points out that's much of why Supplements exist. But that's its own conversation.
So for Advantage plans, there is a cap. What does it look like?
Each plan sets its own limit, but there's a federal ceiling. For in-network care in 2027, that ceiling is nine thousand eight hundred and fifty dollars.
That's still a significant amount of money.
It is. Though it's a ceiling, not what every plan charges. Some plans set their limit lower. You'd want to know where yours lands.
And here's the thing I want to make sure people catch, because I almost missed it reading the article. That cap does not include drugs.
Correct. The maximum out-of-pocket is specifically for medical expenses, excluding prescription drugs. The article puts it in plain language.
So they have their own separate cap.
In 2027, your out-of-pocket costs for covered drugs are capped at twenty-four hundred dollars. Separate number, separate bucket.
Two different ceilings. That one for drugs, and then the medical max. So you're tracking both at once.
At least. Which is why the take-home note in the article is so good. It's just a little table. Write the four words down the left side of a piece of paper.
Copay, deductible, network, maximum out-of-pocket.
And then open your Annual Notice of Change and write next year's number next to each one. For network, you write the names of the providers you want to check. That's it. That's the start of a real plan review.
I love how physical that is. Like, you're not just reading the letter. You're building something from it.
And it takes twenty minutes. Possibly less if you've moved it out of the fruit bowl within the last month.
I'm going to retire that joke at some point and then immediately bring it back.
It'll be in the fruit bowl.
Can we come back to the network thing for a second? Because you said it surprises people most in the room. More than the multiple deductibles, which surprised me.
That one does more damage than the deductible math, honestly. The article's pretty clear on it. Copays and those other numbers are things you can read off a page. A network is a list you have to actively check, provider by provider, for the specific year you're buying.
And it can change year to year.
It can, every year. Which is why this is not a one-time exercise. The same doctor who was in network last year might not be this year.
That's the kind of thing that makes people frustrated with this whole system.
Understandably. And it's the case for doing this review every fall, not just when you first sign up.
The workshop in the article is coming up very soon. For anyone in the Phoenix area, Glendale and Scottsdale.
Foothills Library at ten-thirty in the morning, Mustang Library in Scottsdale at two-thirty in the afternoon, Friday October 2nd. And it's at no cost to you.
You can register at 123easymedicare.com, or call eight-seven-seven, two-twenty, one-zero-eight-nine. And if you want to reach the advisors directly with questions before Friday, that number is six-zero-two, two-eight-one, three-eight-nine-eight.
And if something we talked about today raised a specific question about your plan, your numbers, your providers, that's genuinely what the advisors are there for. The exact details of your situation are a question for them, not for us guessing on a podcast.
Which is the right answer every time. Okay, big picture before we close. If someone only walks away with one thing from Ian Schaeffer's piece today, what is it?
Open the letter. The Annual Notice of Change. It's probably already at your house. Everything we talked about, your copays, your deductibles, your network changes, your max out-of-pocket for next year, it's in that letter. Nothing we discussed today is hypothetical for you. It's in there with your name on it.
And if you sit down with that four-word list and it raises more questions than it answers, that is not a failure. That is the right moment to call an advisor.
That's what they're for.
Thanks for spending this time with us. We mean it when we say this stuff matters, and we want you going into your plan review feeling ready, not overwhelmed. Take the four words, find the letter, and if you want help with the rest, the team at American Retirement Advisors is there for you. We gave you their direct number a few minutes ago, so scroll back if you need it, and don't be shy about using it. We'll see you next time.