Medicare Doesn’t Equal Dental Care. That Can Be a Big Problem

“Many people view Medicare as the gold standard of United States health coverage, and any attempt to cut it incurs the wrath of older Americans, a politically powerful group. But there are substantial coverage gaps in traditional Medicare. One of them is care for your teeth. Almost one in five adults of Medicare eligibility age (65 years old and older) have untreated cavities. The same proportion have lost all their teeth. Half of Medicare beneficiaries have some periodontal disease, or infection of structures around teeth, including the gums. Bacteria from such infections can circulate elsewhere in the body, contributing to other health problems such as heart disease and strokes. And yet traditional Medicare does not cover routine dental care, like checkups, cleanings, fillings, dentures and tooth extraction… Adding a dental benefit to Medicare is popular. A Families USA survey of likely voters found that the vast majority (86 percent) of likely voters support doing so. The survey also found that when people do not see a dentist, the top reason is cost. Ms. Willink’s study estimated that a Medicare dental benefit that covered three-quarters of the cost of care would increase Medicare premiums by $7 per month, or about 5 percent. The rest would need to be financed by taxes.” (New York Times)

Medicare Problems

The Medicare Rights Center is a national, nonprofit consumer service organization that works to ensure access to affordable health care for older adults and people with disabilities through counseling and advocacy, educational programs and public policy initiatives.

Every year it fields thousands of calls from people having problems with their Medicare. In its latest report summarizing calls from 2016, it grouped problems into three areas: 1) Medicare Part B enrollment rules and pitfalls; 2) difficulties with Medicare Advantage (MA) health service denials and coverage rules; and 3) financial hardship affording Medicare Part D cost-sharing.

Here’s a typical case: “Ms. B was covered by COBRA and undergoing cancer treatment. She declined to enroll in Medicare Part B because her employer incorrectly told her COBRA would pay as a primary health insurance payer after she went out on disability. While receiving expensive life-sustaining cancer treatment, the COBRA plan stopped paying primary and recouped a year of payments. Ms. B was left without health insurance, charged for thousands of dollars in medical bills, and threatened by providers to cut off her cancer treatment because she lacked insurance coverage for outpatient services.”

The report points out something we’ve been seeing for years, and which inspired our creation of the Savvy Medicare Planning program in the first place: knowing when to enroll in Medicare falls on the beneficiary without proper notification from the Social Security Administration or Medicare. And many employers’ benefits departments lack the Medicare knowledge to guide their employees and retirees on Medicare enrollment. “Whether due to the misinformation provided by employers or lack of access to reliable information about Medicare enrollment, enrolling in Medicare Part B at the right time after employer coverage ends is a challenge that many people can get wrong. Contributing to the problem is the lack of a formal notice about enrolling in Part B or how to use the Part B Special Enrollment Period (SEP), as well as a misunderstanding of Medicare’s coordination of benefits rules when people have other types of health insurance coverage,” the report says.

One area many people get wrong is the special enrollment period that allows people age 65 or older to defer enrolling in Medicare Part B if they have employer coverage. The coverage must be based on current employment of self or spouse; it can’t be a retiree plan. Medicare pays primary to retiree plans—but only if a person is enrolled in Medicare. Medicare also pays primary to COBRA—but again, only if you are enrolled in Medicare. “People with retiree coverage or COBRA who fail to enroll in Medicare will end up without a primary health insurance payer. In some cases, people may slip through and go unnoticed while the secondary health insurance erroneously continues to pay primary. Some beneficiaries explain that they are informed of this employer error only after they have incurred high medical costs. When this happens, Medicare-eligible beneficiaries run the risk of the insurer recouping all payments made to providers.”

The bipartisan BENES Act would improve Medicare notification procedures and fix the coverage gaps in the 5th, 6th, and 7th months of the initial enrollment period and in the January 1 to March 31 general enrollment period, which now makes new enrollees wait until July for coverage to start.

Another area of concern are Medicare Advantage coverage denials. These comprised about 40% of the 16,758 calls to the Medicare Rights helpline. In one case a woman experiencing gastrointestinal bleeding went to the emergency room of an in-network hospital where she was treated by an out-of-network doctor. The plan refused to pay for the doctor’s services because he was not in the network. This was not an isolated case. There were many complaints from Medicare Advantage enrollees who were careful to use in-network facilities where, unbeknownst to them, they were treated by out-of-network doctors.

Medicare Advantage enrollees also have trouble accessing needed care in their plan’s network because the pool of network specialists is limited and may result in long waiting periods for appointments. One person near Portland, Oregon, for example, had to wait up to four months to get an appointment with a dermatologist in her plan’s network to remove cancerous skin tissue. Medicare Advantage plans all have an appeals process, but navigating it is a stressful and onerous task.

About 20% of calls expressed concern about Medicare affordability. Of those, 53% were related to Part B premiums and 43% were related to Part D drug costs. And these calls were not just from low-income people; 44% of callers did not qualify for Extra Help due to the program’s low asset and income limits. One beneficiary who was scheduled to undergo a kidney transplant needed to take a specialty antiviral medication for six months after the transplant at a cost of $2,500 per month. He did not qualify for Extra Help and could not appeal. Medicare Rights is working to improve the affordability of prescription drugs for people on Medicare, including allowing “tiering exceptions” for drugs on a Part D plan’s specialty tier.

The report supports our mission to educate financial advisors on Medicare enrollment rules in order to save their clients some of these headaches. In addition to helping clients enroll in Medicare on time, we encourage you to be aware of Medicare Advantage pitfalls, particularly with regard to the narrowing of provider networks and lack of communication when an out-of-network doctor steps in to treat a patient at an in-network facility. If clients lack access to a good, robust Medicare Advantage plan with an extensive provider network, you might steer them toward Original Medicare with a comprehensive Medigap plan (F or G). For those who insist upon enrolling in a Medicare Advantage plan, alert them to some of these network pitfalls and advise them to confirm that they are being treated by an in-network doctor at the time of treatment (assuming they are conscious and not bleeding).

Proof you are not a good 401(k) investor

The 2017 Quantitative Analysis of Investor Behavior (QAIB) study was published recently. Since 1994, this study measures the effects of the investment decisions that individual investors make to buy, sell, or hold on to their mutual fund investments.

Let me save your reading time by summarizing the bad news with the following quote from the study.
“No matter what the state of the mutual fund industry, boom or bust, investment results are more dependent on investor behavior than on fund performance.”

The simple fact of the matter is that most individual company 401(k) retirement plan participants don’t know “what to buy.” They are confused and have a very hard time determining the best mutual fund options to own on their default company 401(k) retirement plan menu.

Since the bottom of the current stock market cycle in March 2009, all stock market mutual fund investors have made money. But the vast majority of individual company 401(k) retirement plan participants don’t own the best mutual funds options available to them.

There is a huge gap in the investment performance available on a company 401(k) retirement plan menu versus the investment performance earned by the individual company 401(k) retirement plan participant.

That gap costs the individual company 401(k) retirement plan participants tens of thousands of dollars over their working career. With the investment advice technology available today, there is no reason for this situation to continue.

There is a chart in the Dalbar report that states that the average investor earned 3.64% a year over the 10-year period ending in 2016.

Here is the bad news. The low-cost S&P 500 mutual fund option found on most default company 401(k) retirement plan menus returned 6.95% over the same time period. That number is almost twice the amount of the average investor returns.

I have no idea of the size of the current balance of your company 401(k) retirement plan account. But if you compare the investment return of the S&P 500 over the last 10 years versus your investment returns, the gap number is going to get your attention.

For the last 8-plus years you have been able to buy-and-hold and pay no attention at all to your company 401(k) retirement plan account. But it would have been hugely more profitable for the growth of your company 401(k) retirement plan account to have owed the best mutual funds available to you.

If you had another $50-75,000 in your company 401(k) retirement plan account balance today, would your confidence in a more secure retirement be higher? My guess is that the answer would be yes.

In a favorable stock market, the investment returns are there in your company 401(k) retirement plan account. Work a little harder to make sure that you get your share of those returns.

Just for the asking we would love to provide you with a breakdown of your company 401k retirement plan investments the first week of every month.  Why not give yourself an advantage each and every month and give yourself the chance to maximize your 401k investment.

March 2018 401k_Page_1

Will Your Target-Date 401(k) Fund Blow Up Your Retirement?

Will Your Target-Date 401(k) Fund Blow Up Your Retirement?

Would you not do better by receiving a graph like this every month showing you the best performing funds in your 401k?

March 2018 401k_Page_1

Contact my office at 215-886-2122 to arrange to receive your copy every month.

Schwartz Financial Weekly Commentary 3/19/18

The Markets

It’s a good time for a gut check.

Last week, after sliding lower for four days, the Standard & Poor’s 500 Index recouped some of its losses on Friday. The reasons behind the week’s poor showing were diverse. Barron’s reported:

“The market is so discombobulated right now that it can’t even decide what it’s afraid of. What do we mean? When the Standard & Poor’s 500 index suffered its first correction since the beginning of 2016 last month, the cause was easily identified – a good old-fashioned inflation scare caused by a larger-than-expected increase in wages and a rapidly rising 10-year Treasury yield, which almost hit 3 percent…Fast-forward more than a month and those fears seem almost quaint.”

Those fears included:

  • Special Counsel Robert Mueller’s subpoena of the Trump Organization.
  • The effects of recent tariffs and the possibility of trade wars.
  • The departure of Secretary of State Rex Tillerson.
  • The Atlanta Fed revised its GDPNow Forecast downward for the first quarter of 2018. Weakness in consumer spending, net exports, and inventory investment offset gains in private fixed-investment growth.
  • The Commerce Department reported weak retail sales for the third month in a row. Economists had expected sales to rise.

Here’s the thing: During 2017, volatility settled at historically low levels and stock markets charged ahead. As a result, it was relatively easy for investors to become sanguine about risk. You could say 2017 made investing seem as mundane as driving across the flatlands of the Plains states. It’s possible 2018 will be more like traveling icy switchbacks through the Rocky Mountains.

No matter what happens in the months to come, it’s a good time to reassess your risk tolerance and make sure it aligns with your financial goals and asset allocation.

Data as of 3/16/18 1-Week Y-T-D 1-Year 3-Year 5-Year 10-Year
Standard & Poor’s 500 (Domestic Stocks) -1.2% 2.9% 15.6% 9.8% 12.1% 8.0%
Dow Jones Global ex-U.S. 0.2 0.7 16.6 5.5 4.2 1.3
10-year Treasury Note (Yield Only) 2.9 NA 2.5 2.1 2.0 3.3
Gold (per ounce) -0.8 1.1 6.6 4.4 -4.0 2.6
Bloomberg Commodity Index -0.7 -0.9 2.9 -3.5 -8.7 -8.2
DJ Equity All REIT Total Return Index 1.3 -6.2 1.2 3.7 7.2 7.5
S&P 500, Dow Jones Global ex-US, Gold, Bloomberg Commodity Index returns exclude reinvested dividends (gold does not pay a dividend) and the three-, five-, and 10-year returns are annualized; the DJ Equity All REIT Total Return Index does include reinvested dividends and the three-, five-, and 10-year returns are annualized; and the 10-year Treasury Note is simply the yield at the close of the day on each of the historical time periods.
Sources: Yahoo! Finance, Barron’s,, London Bullion Market Association.
Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly. N/A means not applicable.

how much do you spend on healthcare? Healthcare costs have been going up for a long time. The Centers for Medicare & Medicaid Services reported annual health spending – healthcare paid for through private health insurance, Medicare, Medicaid, or out-of-pocket spending by businesses, households and governments – in the United States averaged $3.3 trillion in 2016.

That’s about $10,348 per person. It’s a significant amount even before you consider the median income in the United States was about $57,600 that year.

Here’s another perspective: Healthcare spending was equal to almost one-fifth (17.9 percent of GDP) of everything the United States economy produced during 2016 (Gross Domestic Product – GDP – measures the value of all goods and services produced in a country). That’s more than U.S. manufacturing produced (11.7 percent of GDP) during 2016. Add in retail (5.9 percent of GDP) and the total is just shy of spending on healthcare.

The cost of healthcare is important not just because it’s high, but because it’s a critical aspect of retirement planning. A retirement plan is built around a horizon, which is the number of years you expect retirement to last. It’s a difficult number to think about because it’s a reflection of how long you expect to live.

In general, the planning horizon for women should be longer than the planning horizon for men. Women tend to live longer, and that means their healthcare costs may be considerably higher. About $79,000 higher, according to one estimate that found a healthy 55-year-old woman could pay almost $523,000 in healthcare expenses (Medicare Parts A, B, D, a supplemental policy F, dental, and all out-of-pocket expenses) during retirement.

There are a variety of approaches that may help cover the expense – even if you’re closing in on retirement. A retirement planning strategy that factors in healthcare expenses with an appropriate planning horizon can help improve financial stability in your later years.

Weekly Focus – Think About It

“We’re optimistic about ourselves, we’re optimistic about our kids, we’re optimistic about our families, but we’re not so optimistic about the guy sitting next to us, and we’re somewhat pessimistic about the fate of our fellow citizens and the fate of our country. But private optimism about our own personal future remains persistent. And it doesn’t mean that we think things will magically turn out okay, but rather that we have the unique ability to make it so.”

–Tali Sharot, Associate Professor of Cognitive Neuroscience, University College London

Value vs. Growth Investing (3/16/18)

Name 1-Week YTD 4-Week 13-Week 1-Year 3-Year 5-Year
US Market -1.12 3.44 1.13 3.53 17.84 11.69 14.14
US Core -1.35 0.88 0.05 0.78 13.94 10.98 13.92
US Growth -0.93 9.22 3.33 9.02 30.11 13.21 16.54
US Large Cap -1.25 3.74 0.94 3.49 18.80 12.39 14.52
US Large Core -1.53 0.90 -0.22 0.42 14.46 11.80 14.46
US Large Growth -1.01 9.96 3.17 9.43 31.94 14.28 17.59
US Large Val -1.22 0.28 -0.30 0.53 10.47 11.04 11.46
US Mid Cap -0.80 2.87 1.46 3.92 15.99 10.09 13.53
US Mid Core -0.86 0.86 0.56 1.75 13.21 8.98 12.94
US Mid Growth -0.76 7.28 3.53 8.08 25.17 10.02 13.70
US Mid Val -0.79 0.41 0.18 1.83 9.75 11.18 13.87
US Small Cap -0.61 1.84 2.18 2.80 13.44 9.09 11.81
US Small Core -0.78 0.75 1.39 1.82 11.47 8.98 11.70
US Small Growth -0.60 7.04 4.42 7.42 25.36 10.99 13.51
US Small Val -0.43 -2.13 0.70 -0.75 4.08 7.15 10.15
US Value -1.08 0.14 -0.14 0.71 9.90 10.82 11.88
2004 Morningstar, Inc. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar; (2) is not warranted to be accurate, complete or timely. Morningstar is not responsible for any damages or losses arising from any use of this information and has not granted its consent to be considered or deemed an “expert” under the Securities Act of 1933. Past performance is no guarantee of future results.  Indices are unmanaged and while these indices can be invested in directly, this is neither a recommendation nor an offer to purchase.  This can only be done by prospectus and should be on the recommendation of a licensed professional.

 Office Happenings:

Cherry Blossom

If you’re like most people, you have a personal “bucket list” of things you want to do during your life. I’d like to recommend adding another item to the list.

Every year around March, thousands of people journey to Washington, D.C. to enjoy the

National Cherry Blossom Festival. If you’ve ever seen these trees in bloom, you know what a breathtaking spectacle they are. While we often associate our capital with the dreary grind of politics, for a few weeks every year, the city becomes festooned with color.

The festival has a long and happy history. The trees were first donated in 1910 by the city of Tokyo as a symbol of friendship between Japan and the United States. Unfortunately, the trees were infested with pests, forcing President Taft himself to order them burned. Undeterred, the Mayor of Tokyo donated three thousand new trees, which the First Lady, Helen Taft, helped plant on March 27, 1912. More trees were planted over the next decade, until in 1927, a group of children re-enacted the first planting. Historians consider this the first edition of the festival. A symbol of spring, rejuvenation, and friendship, the trees are some of the most beautiful possessions our nation has.

As a financial advisor, part of my job is to help people achieve the goals on their personal bucket list. The National Cherry Blossom Festival is an event I’d recommend everyone add to theirs.

Happy Spring!


Michael L. Schwartz, RFC®, CWS®, CFS

P.S.  Please feel free to forward this commentary to family, friends, or colleagues.  If you would like us to add them to the list, please reply to this email with their email address and we will ask for their permission to be added.


Michael L. Schwartz, RFC, CWS, CFS, a registered principal offering securities and advisory services through Independent Financial Group, LLC., a registered broker-dealer and investment advisor.  Member FINRA-SIPC. Schwartz Financial and Independent Financial Group are unaffiliated entities.


This information is provided for informational purposes only and is not a solicitation or recommendation that any particular investor should purchase or sell any security. The information contained herein is obtained from sources believed to be reliable but its accuracy or completeness is not guaranteed.  Any opinions expressed herein are subject to change without notice.  An Index is a composite of securities that provides a performance benchmark.  Returns are presented for illustrative purposes only and are not intended to project the performance of any specific investment.  Indexes are unmanaged, do not incur management fees, costs and expenses and cannot be invested in directly.  Past performance is not a guarantee of future results.


* The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general.


* The DJ Global ex US is an unmanaged group of non-U.S. securities designed to reflect the performance of the global equity securities that have readily available prices. 


* The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the U.S. Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market.


* Gold represents the London afternoon gold price fix as reported by the London Bullion Market Association.


* The DJ Commodity Index is designed to be a highly liquid and diversified benchmark for the commodity futures market. The Index is composed of futures contracts on 19 physical commodities and was launched on July 14, 1998.


* The DJ Equity All REIT TR Index measures the total return performance of the equity subcategory of the Real Estate Investment Trust (REIT) industry as calculated by Dow Jones.


* Yahoo! Finance is the source for any reference to the performance of an index between two specific periods.


* Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.


* Past performance does not guarantee future results.


* You cannot invest directly in an index.


* Consult your financial professional before making any investment decision.


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Special Report: Fidelity puts 6 million savers on risky path to retirement

Fidelity puts 6 million savers on risky path to retirement