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 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. 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 Van Zooten with me. Fourth Wednesday of June. This month is flying by.
Mike VanZuiden:
It is.
Nate Kreinbrink:
Next week is 4th of July weekend. That does not seem like it should be that fast already.
Mike VanZuiden:
It’s cruising along, that’s for sure. My wife, who’s a teacher and is on summer break, she’s feeling it too.
Nate Kreinbrink:
Yes, we haven’t quite gotten to that point yet in the house where we’ve gotten the, “I’m bored yet,” or anything, so it’s still fairly new with it. But I think the youngest one, he has camp this week at the Eco-Tourism Center outside of town there. And it’s always a highlight of his summer, and all the activities and stuff that they get to do throughout the day. So
Mike VanZuiden:
They do some pretty neat stuff out there. That’s a neat place. It really is.
Nate Kreinbrink:
It’s pretty cool. It’s pretty cool. And it’s something that he looks forward to, and obviously, season’s moving along. Youth baseball, softball, everything else that they have going on this year, it’s a busy one.
Mike VanZuiden:
I kind of miss having kids that age a little bit, sometimes.
Nate Kreinbrink:
Sometimes.
Mike VanZuiden:
Not always, but sometimes. But this time of year, like the ball games and stuff. So we want to catch a ball game, we go watch the neighbor girls play tee ball, or something like that, or soccer. But yeah, it doesn’t seem that long ago that we were gone to our own kids’ activities. And now they’re 23 and 26, and we’re…
Nate Kreinbrink:
Enjoying the…
Mike VanZuiden:
We’re enjoying the empty nest life, and…
Nate Kreinbrink:
Enjoying your own schedule. Keeping that yard up to keep, right?
Mike VanZuiden:
Absolutely.
Nate Kreinbrink:
This rain will help that. This rain will put it back up there, and-
Mike VanZuiden:
We’ll be out back.
Nate Kreinbrink:
… make you have to mow again.
Mike VanZuiden:
Mowing a couple times a week, easy, right?
Nate Kreinbrink:
It is. Fun times, fun times. But again, as I mentioned, fourth Wednesday of each month, we try to focus on Medicare as a topic, and just hit some few things that continuously pop up. And what we’re seeing in the news, maybe some things that came up when we met with clients regarding Medicare. But want, again, the fourth Wednesday of each month, just have that be our focus.
And I think, again, Mike and I were talking yesterday, and then on the way up today, or this morning, that again, there’s still a lot of confusion as far as what Medicare is, and misconceptions about lumping everything together.
And I think when people look to transition from a group plan or coverage that they had on their own through the marketplace into Medicare, again, that alphabet soup that they have to try to navigate through, and try to figure out what is the best route for them to go to becomes extremely confusing.
And again, they just seem lost, as far as what is covered, what isn’t covered. They hear the word networks. Well, when does a network apply? When doesn’t it apply?
Mike VanZuiden:
Absolutely.
Nate Kreinbrink:
And then drug plans, do I need it? What kind of a drug plan? What about, again, do I pay a premium? Do I not pay a premium? There’s all these things that continue to go. And they get frustrated, and they get upset, and they’re like, “This is tougher than what I thought it was going to be.”
Mike VanZuiden:
It is. It’s confusing. Alphabet soup is a good description of it. You got all these different letters and what do they mean? And it’s a tough space to navigate.
Nate Kreinbrink:
It is.
Mike VanZuiden:
You need some input, some good input, whether it’s from a person, I know a lot of people that like to go online and do their research. Nothing wrong with that, if that’s what makes you most comfortable. But regardless, you need to have some resources to make informed good decisions about what’s your plan, what’s your path, what your process is going to be.
So that’s what this morning, just thought we’d do a little bit of Medicare 101, so just the basics of what it is, what it covers, what it doesn’t cover, and those sorts of things. And when to get yourself set up and signed up? So in most cases, that’s at age 65.
That’s when your Part A and Part B kick in. But that’s not always the case. For some people, they’re still working at that point in time, and are covered by another health plan. So they may or may not enroll in Part A and Part B. Part A comes automatically when you’re 65. Part B, you can kind of sign up at 65. You can sign up later than that, if you have credible coverage. Maybe you’re through your employer or your spouse’s employer, you have credible coverage. You probably don’t need Part B then until you’re going to go off of that coverage. But those are the two trigger points, for the most part, on when you’re going to sign up for it. And then the second thing is, really, you have to choose which way you want to go with your Medicare health coverage.
So there’s original Medicare, which is Part A and Part B. And then, probably in most instances, you’re going to get a Medicare policy, so a supplement, and a Part D plan, which covers your prescription drugs. Or there is the second path, and that’s the Advantage Plan, or sometimes called Part C. So part of that alphabet soup, you got A, and B, and D in original Medicare. You got Part C if you go the Advantage route.
And everybody’s situation is different, so it’s not a one size fits all when it comes to Advantage plans, and supplements, or Medigap coverage. So that’s where the homework comes into play in your individual situation, weighing what your situation is versus the options that are out there.
Original Medicare is, like I said, is Part A and Part B. And then you’re going to get into a supplement plan and a drug plan. The supplement plans come with a monthly premium. So on top of your Part B premium, which is $185 a month for 2025, there would be an additional premium for the Medigap supplement plan. And that really, it picks up, Part A and Part B don’t cover everything. So the Medigap plan comes in and picks up most of the costs that aren’t covered by the Part A and Part B.
It’s a good option. It’s very flexible. So basically, with the supplement plans and original Medicare, you can go to any doctor or hospital that takes Medicare, anywhere in the US. And I would say, percentage wise, that’s a very, very, very high percentage of the providers in the US accept Medicare as payment. So that means that your drug plan and your supplement would also be accepted as well.
And the difference, really then, when you get into that versus the Advantage plan, the Advantage plans are, it’s kind of a private policy. So you bundle your A, B, and your Part D coverage all into one plan. It may offer some extra benefits though, that original Medicare doesn’t. Sometimes there’s some vision, hearing, and dental services that you don’t get with original Medicare.
The Advantage plans, you need to use doctors that are in the plans network for the most part. You may pay a premium for the plan. A lot of those plans that are out there don’t have premiums, so you don’t pay a premium upfront, but then you’re paying out of pocket as you go, as you basically consume the medical services.
Nate Kreinbrink:
Well, too, and I think when you’re looking at those different ways to get your coverage. And then, again, there is no one size fits all thing, this blanket statement to say, “Hey, everybody should go this route,” or “Everybody should go this route,” or whatever. It is a personal preference. But again, when you’re starting to look at it, when people make that decision, we always talk now versus 10 years, 20 years down the road.
And again, when you go, anytime it’s your first initial enrollment into Medicare, whether it’s right when you turn 65, or 67, when you switch from a group health plan, there is no underwriting. There’s no pre-existing conditions that’s going to be determined in what you’re going to pay for a premium. Again, there’s really no health questions that first time that you do that.
However, if you wait, and then anything after 12 months, so you’ve been on Medicare, whichever route you went to for 12 months, and go into looking at going to a different plan, there will be health questions, there will be underwriting.
And so, again, you may be able to be approved for that new plan, or to switch from Advantage to a supplement, or supplement to whatever, but there’s going to be those underwriting. And okay, we may take you, but you’re not going to pay this base premium. You’re going to pay three times that, four times that, as far as to be covered. And when do most people want to change, is when there’s a health issue that arises that they want to maybe switch from one side to another.
So again, it’s important to keep that in the back of your mind as well, as far as when you’re looking at which route do you want to go to. And again, there is that option, you can always change down the road. So again, when you first enroll, it is not set in stone for the rest of your life, this is how you have to go. You do have that option to switch, but there may be some health questions that come along with it.
Mike VanZuiden:
Guaranteed issue on that initial enrollment, no questions asked. But yeah, after that, chances are you’re going to go through the underwriting process, and they’re going to go over your health situation with a fine tooth comb. And there’s things that they’ll take on as risk, and some that they may take on as risk, but they’re going to rate you up and your premium is going to probably be a little less comfortable and more of a burden financially.
Nate Kreinbrink:
And that, again, just to clarify with that as well, that is just for going with an Advantage plan or a Med Supp plan. Okay? Now, when we start talking, if you go the Med Supp route with a drug plan, so for your Part D, that is something that we want to maybe look at every single year during the open enrollment period, especially, if you’ve got a change in prescription, or if you’ve had a drug that maybe was added to you throughout the course of the year, we always want to look at that through the open enrollment period, October 15th through December 7th, every single year.
Because, again, drug plans change. What prescription is covered this year may not be covered next year. And so we always want to look at those during those. And you can, you can change that every single year if you wanted to. There’s no penalty, there’s no whatever. You are able to change that drug plan every year during that open enrollment period to go into effect January 1st of the following year. So again, that part of it. So your drug plan, your Part D. I know we keep talking letters, but that Part D plan, your drug plan, you, again, want to look at every year.
Mike VanZuiden:
Yep. Your situation could change. The process for your drug plan, what it will cover, what it won’t may change. There’s a lot of moving parts to that. So it’s worth the half hour or whatever to take a look. Let’s plug the new drugs in, look at other plans. Maybe there’s a better option out there, maybe there’s not. But it costs nothing-
Nate Kreinbrink:
To take a look.
Mike VanZuiden:
… to sit down with somebody and take a look. And it could cost a lot of money if you don’t, and stay in a plan that’s costing you more than it needs to. So-
Nate Kreinbrink:
Good stuff. Something you want to take a look at. If you’ve got questions, give us a call. Be happy to sit down, and again, maybe try to explain in depth a little bit more, specifically some of the stuff that we have, and again, how it applies to you, and what maybe the best route would be for that.
Did want to mention that every Friday, NelsonCorp Wealth Management and Tax Solutions are wearing jeans for charity. Money raised in the month of June will be donated to the Brantley’s Wings program.
Mike, appreciate you joining me today.
Mike VanZuiden:
Yeah, thanks for having me.
Nate Kreinbrink:
Nate and Mike with 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 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.