Announcer:
It is time now on KROS for Financial Focus, brought to you by NelsonCorp 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 Incorporated, a broke-dealer, member of FINRA, SIPC. Investment advisor representative, Cambridge Investment Research Advisors Incorporated. A registered investment advisor, Cambridge and NelsonCorp 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. Well, this is Nate Kreinbrink, have Mike VanZuiden along here with me today. April’s moving along, which means we are past April 15th, which is a milestone. It’s like that day on the calendar that seems to never get there. It’s like that last day of school.
Mike VanZuiden:
It’s a cause for celebration, that’s for sure, and it’s-
Nate Kreinbrink:
Now another tax season in the books. And again, they’re always unique in their own way, but I think you guys made it another successful one and you can put another one behind you.
Mike VanZuiden:
It feels good. Sometimes it feels like a win, sometimes it feels like you’re just enduring, grinding, but it’s good and it’s good to be in it. And it’s good to have it over with and shift gears a little bit here for a little while.
Nate Kreinbrink:
It’ll be just a normal regular schedule now, right?
Mike VanZuiden:
Yeah.
Nate Kreinbrink:
I always joke when Andy comes on here and we talk a little bit when we’re in tax season like that and talking about the weather and he always says, he goes, “I wish we had 10 inches of snow up until April 15th.” He goes, “Because I can’t be out there for the good days anyway.” Just now it can warm up and now we got rain again, but it’s part of the-
Mike VanZuiden:
Mowing grass.
Nate Kreinbrink:
Mowing grass every other day. If not, you better be bailing it. It is-
Mike VanZuiden:
Absolutely.
Nate Kreinbrink:
… getting thick, but it’s nice to see the greenness, the flowers, the buds on the trees, warm temperatures, opening up the windows. Hopefully we’re turning the page and not have 25 mile an hour wind with it every day.
Mike VanZuiden:
Absolutely.
Nate Kreinbrink:
Today’s program, usually on the fourth Wednesday of every month we try to focus a little bit on Medicare. Medicare obviously is a topic that will more than likely impact each and every one of you at some point throughout your life. And again, understanding the different parts of it, how to file, when to file, what you need to know, what is out there for you. All the options obviously is overwhelming. You get close to 65, you’re going to be getting a bunch of mail being sent out to you and you’re going to go through it and not really understand what it is that you just read and how to decipher one plan from the other versus a part, versus a plan, versus A, B, C, D, E, F, G, L, M, N, O, P. It gets to be so much and so what we try to do on this topic every week is just give you the basics and try to put out to you a basic understanding of how to go about deciphering and breaking down what your different options are. And the first part is just knowing when you need to file.
Mike VanZuiden:
Right. Your initial enrollment period is basically your first chance to enroll in Medicare part A and part B. It lasts for seven months, your initial enrollment period does. You got three months before the month you turn 65, it ends three months after the month you turn 65. Basically a seven-month window there before and after you turn age 65 where you want to be making that enrollment and getting enrolled in Medicare part A and part B. Very important that you do that in a timely manner. Not everybody enrolls at age 65. Some people are still working and have creditable coverage at that point, so they don’t enroll right away to not be paying premiums for their private health insurance and for the Medicare. But for most people within the seven months, the three months before and after you turn age 65, it’s time to get enrolled in Medicare part A and part B.
And if you fail to do that and don’t have creditable coverage, if you don’t do that in a timely manner in that window, you could be subject to penalties on your part B premiums for as long as you have Medicare coverage. It’s not a penalty penalized X amount for a month or something for being late, it is a penalty that will ride with you for as long as you’re paying part B premiums, so basically for the rest of your life. That initial enrollment period, very, very important to do that when it’s time. Do it on time and avoid some of the penalties that could go with that if you fail to do so.
Nate Kreinbrink:
Right, and I think the one point you just made there, Mike, as far as when you turn 65, that will be like you said, the initial enrollment period for the majority of people. But you don’t have to if you have other coverage.
Mike VanZuiden:
Correct.
Nate Kreinbrink:
And I think that’s the misconception that some people may have is that, hey, I’m still going to work past 65, but I have to do Medicare. Well, if you still have coverage through your employer and it makes sense for you to keep it and you like it, then you don’t have to file at 65 as long as you have coverage. That also applies to maybe a spouse that is on their spouse’s plan-
Mike VanZuiden:
Correct.
Nate Kreinbrink:
… whatever. They turned 65, but they’re covered under their spouse’s plan. As long as they’re able to, they are still allowed to delay claiming Medicare and stay on that spouse’s plan. You want to just keep in mind though, when that plan ends or when your coverage is dropped from that coverage, you have to start then enrolling in Medicare to bridge any gap that you have. We don’t want to have any lapses in coverage-
Mike VanZuiden:
Absolutely.
Nate Kreinbrink:
… during any of those time periods. Again, if you turn 65, that’s the first that you can enroll in it. If you have other coverage, you’re going to want to get that coverage as soon as that coverage that you currently have stops.
Mike VanZuiden:
Absolutely.
Nate Kreinbrink:
You look at it, you said part A, part B. Part A really doesn’t cost much, it is what you’ve been paying into throughout your working career. Sometimes people when they get 65, will file for their part A benefit, decline their part B benefit at that time because they have other coverage. You’re able to do that. That enrolls you in part A, you will get a Medicare card that says part A on there and your effective date. You need to keep in mind though that when you do need coverage, then you’ll have to go back in and file for that part B.
Mike VanZuiden:
Part B.
Nate Kreinbrink:
You will get a new card sent to you that will have your part A from your original effective date, and then you’ll get the new one will have your part B on there with that updated effective date per your part B plan. After that point, then it doesn’t stop there.
Mike VanZuiden:
It doesn’t stop there.
Nate Kreinbrink:
You have to decide which route you want to go to then-
Mike VanZuiden:
Absolutely.
Nate Kreinbrink:
… just to fill in the gaps. And whether you go a med supplement with a drug plan, you go a Medicare Advantage plan that includes a drug plan, understanding the differences, good luck.
Mike VanZuiden:
And we just came out of, March 31st was the end of the Medicare open enrollment period, so that’s another period that comes into play for some people. And just briefly, what that period entails is it’s an opportunity to change Medicare Advantage plans, if you are currently on a Medicare Advantage plan. It affords you the opportunity to leave Medicare Advantage and return to original Medicare, meaning you’re going to go back to your part B with a supplement and then a drug plan. So you can enroll in a Part D plan also during that Medicare open enrollment period, if you are going from Medicare Advantage back to original Medicare. That period just ended at the end of March. Now that’s January one to March 31st every year.
There’s a second period that coincides with that, and that’s a general enrollment period also from January 1st to March 31st. And basically this is an opportunity if you missed your initial enrollment period, so basically just missed the boat, didn’t get enrolled when you could have and probably should have, you can enroll during the general enrollment period January one to March 31st. But in most cases that’s going to entail a penalty if you’re enrolling outside of that window and you didn’t have creditable coverage.
And then the last period that we will just talk about today briefly is the annual enrollment period, that’s the October 15th to December 7th period, and that basically allows you to make changes to your Medicare coverage choices. Basically anything goes in that period as far as making changes, drug plans, Advantage plans, all of those things come into play then. And that’s a hyped period, I think, where if you’re on Medicare, I know some people that are on Medicare have supplements and they just get Medicare. I know with mail around that time of year, again, you’ll see the TV just flooded with commercials related to that sort of thing. That’s another period to keep in mind for people that are approaching Medicare or if you’re already on Medicare, the annual enrollment period affords you some opportunities to make some changes.
Nate Kreinbrink:
And I think too, when you start going through this, the biggest thing, I think the takeaway for the individuals listening is just to ask questions. And again, to have you be able to navigate and understand and comprehend everything that’s out there is very overwhelming. And I would just encourage you to meet with somebody, to give us a call and sit down and let’s go over your options, and let’s have an understanding as to what your timeline is to start filing, when we need to start doing this. Don’t wait until after you retire and then be, oh, I got to get Medicare. Now, let’s get this done.
Let’s start having those conversations a year ahead of time to just start laying the foundation to say, okay, you’re going to turn 65 on this date, we need to meet to get this done. You need to want to look to file for this on this date. Again, there’s opportunities that we can start this process so it doesn’t feel like we’re rushed and we want to know what our options are. And I think that’s the biggest thing that people need to take away from the different ways to get Medicare is not just only understanding how it’s going to work now, but how is this going to work down the road if this happens, or if I need to do this, or if I need to do this? What is the differences in which way I choose now versus down the road should I have a condition that comes up? How is the coverage is different? And looking at that.
And that’s where I think people make the best decision for them, not maybe just today, but again, as their condition changes, their health changes, they move, they travel, okay, how is this going to work in those different environments? And that’s where, again, I think you can make a decision and feel confident in how you’re making that. And again, try to take all that complication away from it.
Mike VanZuiden:
Give yourself some time to do it because there’s a couple steps so you have to, before you can enroll in a supplement, a drug plan, and an Advantage plan, you have to have your Medicare card with your Medicare numbers and that sort of thing. And so you make that initial enrollment into Medicare part A and B, you have to get those cards, which takes some time before you can get into your supplement and drug plans and things like that. It takes a little bit of time. The government is efficient, but they’re not that efficient so it may take a little bit of time.
Nate Kreinbrink:
Again, let us know. We’d be happy to walk you through a few things and help out wherever we can.
Mike VanZuiden:
Absolutely.
Nate Kreinbrink:
Did want to mention real quick here before we do run out of time that every Friday, Nelson Corp is wearing Jeans for Charity. Money raised in the month of April will be donated to the Veterans Affairs here in Clinton County. Mike, see, the program goes fast when you’re just-
Mike VanZuiden:
Program goes fast.
Nate Kreinbrink:
… spewing out knowledge. Again, Nate and Mike 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 NelsonCorp 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 of FINRA, SIPC. Investment advisor representative, Cambridge Investment Research Advisors Incorporated, a registered investment advisor. Cambridge and NelsonCorp Wealth Management are not affiliated. Cambridge does not offer tax advice. For more information, visit our website at www.nelsoncorp.com.