Announcer:
It is time now on KROS for Financial Focus, brought to you by Nelson Core Wealth Management. The opinions voiced in this show are for general information only and are not intended to provide specific advice or recommendations for any individual. Any indices mentioned are unmanaged and cannot be invested into directly. Registered representatives securities offered through Cambridge Investment Research, Inc, a broker-dealer, member FINRA, SIPC. Investment advisor representative Cambridge Investment Research Advisors, Inc, a registered investment advisor, Cambridge Nelson Core Wealth Management are not affiliated. Cambridge does not offer tax advice. Now, here’s today’s Financial Focus program.
Nate Kreinbrink:
Good morning and welcome to this week’s Financial Focus, brought to you each and every Wednesday morning right here on KROS. This is Nate Kreinbrink. I got Mike Steigerwald with me. It is the third Wednesday of the month, but we are doing a little switcheroo and we’re going to talk Medicare today and save taxes for next week.
Mike Steigerwald:
There you go.
Nate Kreinbrink:
Mike’s joining me today. Again, hard to believe that November is flying right by. Next week is Thanksgiving.
Mike Steigerwald:
Unbelievable.
Nate Kreinbrink:
It is. It’s flying right by. Weather-wise, we haven’t seen any of the white stuff yet, but I’m sure that is not going to be too far along, but it is basketball season, and whether it’s NBA or college or high school or coaching fifth grade boys basketball…
Mike Steigerwald:
A lot of fun stories coming out of that, those practices.
Nate Kreinbrink:
It is, and it’s a fun time of the year. Obviously wrestling season, basketball season and all those getting underway. A lot of hope for, I think, a lot of area athletes and teams as they enter a season. Every season kind getting underway. Monday was the first official practice for high school boys. Girls started last Monday, so again, this time of year, just like opening day in baseball, everybody’s-
Mike Steigerwald:
Everybody’s got a chance.
Nate Kreinbrink:
Everybody’s optimistic and we’ll see how it plays out. But fun time, fun watching it. Football’s getting a little more entertaining. Games mean a little more now as we get down the stretch.
Mike Steigerwald:
Yep.
Nate Kreinbrink:
Hockey’s in place. I mean, it’s-
Mike Steigerwald:
It’s a good time of year for sports for sure.
Nate Kreinbrink:
So again, with the November winding down, I know Mike Van Zooten was on last month when we talked Medicare and we kind talked opening enrollment kind of getting underway, what that means as far as looking at plans. Kind of dive into that a little bit more today with some of the changes as we know. Again, every year it just seems like there’s new things that get thrown about and trying to figure them out, different changes to plans, networks, drug plans, and obviously going into 2025, that is no different.
Big thing this year was the drug plans and what they’re looking at a little bit with, again, how they’re looking at things last year and prior to this, the big term was doughnut hole, and are you going to get into the donut hole? Then what do you have to do to get out of the donut hole to do it? Well, they got rid of that.
Mike Steigerwald:
Don’t worry about the donut hole anymore. It’s gone, so it’s good news. I mean, basically having the maximum out of pocket on the Part D, the drug plans, max out of pocket now at $2,000. So now there’s some caveats to that, but it was definitely best practice this time of year. Go through, review the prescriptions that you’re taking, making sure that they are all covered under your current plan, and if not, maybe shop around for a new Part D plan that has all of those meds covered.
It can be pretty catastrophic differences based on plans and pharmacies, everything like that. It all matters on those Part D plans. So this is a perfect opportunity this time of year where you can make that switch, and certainly do your homework and make sure that you’re getting the proper coverage for you and your situation.
Nate Kreinbrink:
Right. I know with them insurance companies and drug companies putting that cap as far as the max out of pocket on what you will pay for any prescriptions that you take, obviously there’s sometimes a give and take from the insurance companies, and maybe your plan didn’t have a monthly premium prior to this, but the coming year in 2025, it does.
So there’s this offset with what they want to do, deductible or a $0 deductible, again, tier one, tier two plans, how they’re going into it. Again, it’s extremely important and maybe, again, you had a condition that came up throughout the course of the year that you didn’t have 12 months ago when you originally got your drug plan, and now you do, you want to look at different things. So again, situations change and you have to adjust.
Mike Steigerwald:
Yep, absolutely. And no more obvious this year than with those Part D plans. To your point, Nate, yeah, we are seeing an increase in a lot of the monthly premiums on those plans. There have been changes in formularies, so that meaning which drugs are covered, maybe if they were covered last year does not guarantee that they’re covered this year. So to your point, if there was any changes, any prescription changes throughout the past 12 months, definitely want to go through and see what your options are to make sure you’ve got the best coverage.
Nate Kreinbrink:
Right. And I think too, when you look at plans, and again, switching during open enrollment period, drug plans are a big thing where you look at, but again, your other coverage is another big part of that. And again, looking at if you have a Supplement, looking at different Supplements, if you have an Advantage, looking at different Advantage, switching from Advantage to Supplement, Supplement to Advantage, again all times to look at some of those.
There’s different things with Advantage plans after the first of the year as far as enrolling in different ones of those. But again, things change, networks change if you’re the Advantage route, but it’s important to understand that it’s not a free-for-all. And I think that’s the misconception that a lot of people have is like, “Well, if I don’t like it, I’ll just switch during open enrollment period.” Well, that’s true, but if you have had a plan for 12 months or longer, you may have to answer some underwriting questions. And that, I think is the thing that people either aren’t aware of or seem to kind of brush off a little bit.
But again, it’s not that they won’t take you, it’s not that the new plan won’t be able to have coverage through them, but you may be rated, and usually when you get rated, that means you are going to pay a higher premium, oftentimes two, three, even four times as much as what you were paying if you weren’t rated to do that. So again, something to keep in mind when making that decision. It’s not an all or nothing decision, but we kind of want to look at it longer term than looking at it year from year with your coverage.
Mike Steigerwald:
Yeah, very nice to hear from folks that have had these plans and some of the feedback that we’ve gotten. The old set it and forget it kind of deal with the Supplement plans. If you’re eligible and you get that plan right away, moving forward, more times than not, you just keep that rolling and you might have that plan for a decade and never have to worry about networks or anything else. So yeah, there’s certainly some positives, but again, depending on your situation. Every situation’s unique and you’ve got to make sure you’ve got the coverage that fits you and your needs.
Nate Kreinbrink:
And understanding too that again, just because your sister that lives in Illinois has this plan, you live in Iowa and you have looking at that same plan, it’s not how it works because you cross state lines, now all of a sudden, coverage networks, premiums, everything is different. And especially going from Iowa to Illinois, again, there’s a lot of differences between just that little bit. Even within the state of Iowa, you go from Clinton County to Jackson County to Scott County-
Mike Steigerwald:
Scott County.
Nate Kreinbrink:
… Scott County to Des Moines County to whatever, again, every plan is rated differently for that area. So again, just because someone else has that plan that may not live around you, you want to make sure you look at it specifically because what you are going to pay is going to be different, maybe higher, maybe lower, but it’s going to probably be different.
Mike Steigerwald:
Absolutely. Yep, definitely want to make sure that you’ve got the proper coverage in place. Now’s the time to be doing your research, ask for help if you need it, and make sure you’re making the right decisions because this will be the case for the next 12 months. I mean, once you make your decision, there’s usually not a lot of outs that you have to make changes up until next year.
Nate Kreinbrink:
Right. And again, understanding when it is that you need to file for each one of these, whether it’s your part A, part B, whether it’s a MedSupp or Advantage plan or a drug plan. Again, the open enrollment period, October 15th to December 7th, is for those that are usually already on a plan looking to switch for the upcoming year to go into effect January 1st.
Again, if you retire in, say, March, and that you’re going to lose coverage, you’re already 65 but you’re going to transition from a employer plan to the Medicare world, that’s not the open enrollment period. That is your initial election period, meaning that you need to have a seven-month window… Or excuse me, not a seven-month window, but you have a time period from when you lose coverage to when you have to have coverage. If you don’t meet that window, you’re going to be penalized and oftentimes, that penalty carries with you for the rest of your life.
Mike Steigerwald:
Yep, those penalties don’t go away, and unfortunately they can add up over… Just missing that window by a few months can be costly literally for the rest of your life.
Nate Kreinbrink:
Right. And the seven-month window that I was referring to is actually when you originally turn 65, and that is, again, three months prior the month of, and then three months following your 65th birthday when you have that seven-month window to get your coverage going. Again, even if you have work coverage or you’re covered by an employer plan, it doesn’t hurt you to apply for your part A benefit just to get that going, get your effective date started, your name is out there, you’ve got that part done because again, your part A, for the majority of people that hear this and are listening, you’ve already paid for that. That is the money that you’ve paid in with every paycheck that you’ve got. You want to decline your part B usually if you already have coverage, wait until you don’t have that to do it.
So again, there’s a lot of questions. Insurance is something that, again, while you’re working is oftentimes taken for granted. The plan is already in place. This is the plan your employer has, okay? It’s, “Okay, do you want option A or option B?” And you make a pick. They pay for the bulk of it, you pay your little portion, and that’s what you got. Well, now it all falls on you and people oftentimes see it’s overwhelming.
Mike Steigerwald:
Yeah, the decision-making process is pretty thorough. And with all these, as you rattled off all of those various things there, Nate, a lot of decisions to be made, and can certainly be overwhelming. So again, do your research, ask for help, but certainly get what’s right for you.
Nate Kreinbrink:
All good stuff. And again, give us a call. I’d be happy to help out in any way that we can provide any assistance. I did want to mention real quick here before we run out of time that every Friday, Nelson Corp Wealth Management is wearing jeans for charity. Money raised in the month of November will be donated to the Retired and Senior Volunteer Program of Clinton County. Mike, thanks for joining me.
Mike Steigerwald:
Of course. Thanks, Nate.
Nate Kreinbrink:
Mike Steigerwald, Nate Kreinbrink, NelsonCorp Wealth Management, bringing you this week’s Financial Focus. Thanks for tuning in and have a great rest of your week.
Announcer:
Financial Focus is a production of Nelson Corp Wealth Management in Clinton and Davenport. The opinions voiced in the show are for general information only and are not intended to provide specific advice or recommendations for any individual. Any indices mentioned are unmanaged and cannot be invested into directly. Registered representative securities offered through Cambridge Investment Research Incorporated, a broker-dealer, member FINRA, SIPC. Investment advisor representative Cambridge Investment Research Advisors Incorporated, a registered investment advisor. Cambridge and Nelson Core Wealth Management are not affiliated. Cambridge does not offer tax advice. For more information, visit our website at www.nelsoncorp.com.