Announcer:
It’s 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 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 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. I have Mike with me today. Fourth Wednesday of January.
Mike Steigerwald:
Yeah.
Nate Kreinbrink:
January can go. I think everybody’s in agreement like January can just go.
Mike Steigerwald:
Done with the cold, the extreme cold. Yeah. I mean, we were just talking on the way up here, I mean, tell you’re getting older by the way you feel with the extreme cold. Joints are hurting.
Nate Kreinbrink:
Again, negative 10, negative 15, negative 25. It’s cold. And again, we’ve been fairly fortunate. I mean, you look at the news and the weather of as far as all these other states that have just gotten impacted by this winter storm that we, other than this kind of polar vortex coldness that I guess we’ve got, have been really fortunate to not get any of the ice and the snow and everything that came along with the cold. So I guess…
Mike Steigerwald:
That’s the nice part is you don’t have to shovel cold.
Nate Kreinbrink:
No. But again, I think everyone’s in agreement that this is done. So it’ll be soon enough, soon enough. Like I said, we’re almost to February. It’s a short month. Super Bowl is in what? Not this week, but next week. Spring training will be starting here soon. That’s kind of like the first initial kick to spring. We’re getting close.
Mike Steigerwald:
Not far away.
Nate Kreinbrink:
We’re getting close. So getting into this week’s program, I know last two weeks we’ve had Andy Ferguson on talking taxes. Obviously a lot of you should be getting your tax documents in the mail if you have not already received them. Again, just a word of advice from him. Don’t wait until the last minute. Get those things in. Your tax preparer will definitely appreciate not being rushed at the deadline as it comes in to do that.
But again, transitioning to this week, I know the fourth week of every month we always try to focus on Medicare. Medicare is a topic that continues to be in the news ongoing. Obviously coming off of end of the year where you have open enrollment period, making changes to most notably your drug plans. Want to take a look at those if prescriptions have changed, if your plan specifically has changed, that’s the time to do it.
But again, it’s still in the news all the time. I mean, people turning 65, people retiring at the beginning of the year, transitioning from a group plan over to the Medicare world, but even in the news itself. And I think that’s where we’re starting to look at where it’s important to keep an eye on the plans that you have.
Mike Steigerwald:
Yep.
Nate Kreinbrink:
And most notably, I mean, I said the drug plans, but there’s constantly changing even in the news with what is going on with those.
Mike Steigerwald:
Yeah. So I mean, whether it’s a drug plan… excuse me. The drug plans, what drugs they cover and how much they cover. There’s some negotiations that are constantly going on in terms of the, from drug makers and Medicare to determine the cost of some of these drugs. And that continues to be an emphasis, again, outside of the annual enrollment periods, but still things to keep in mind that this is an ever-changing landscape.
That just because your plan did something last year and was the right plan for you, does that mean it’s going to continue to be, especially with the changes that come throughout the industry. So again, there’s a lot of talks that have been going on and you see some headlines about some various things with funding and Medicare Advantage specifically. Certainly we know that there’s changes in those plans year over year. And from the sounds of it, likely to continue down that path.
Nate Kreinbrink:
Right. And I think when you look at drug plans, the way the coverage is, I mean, if your prescriptions that you’re on, they usually fall into a tier system, whether it’s a tier one, a tier two, a tier three, and so on, or just not covered. And again, usually the higher the tier, the less that the plan is covering, the more you are paying out of your pocket. And those don’t stay constant.
So you may sign up for a drug plan, go into look at it for the following year, and everything was covered at a tier one rate this year. Next year, half of them may be bumped up to tier two or tier three, or maybe not even covered next year. So if you don’t make any changes and aren’t aware of any of that, you’re going to have a very unfortunate surprise whenever you go to your pharmacy to do that prescription in that following year.
Mike Steigerwald:
And the bigger issue with that too is oftentimes when you realize it, it’s too late to make a change.
Nate Kreinbrink:
Right. Right. So I mean, you’re stuck with it for the rest of that year until the following open enrollment period to be able to, excuse me, make those changes again. So again, constantly changing with it.
And again, one world where we see… I mean, we’ve talked the different ways as far as getting Medicare coverage. A and B are considered original Medicare. You sign up through those through the Social Security Administration. Whether you go Advantage, whether you go supplement or add that drug plan to it, those are with private insurance companies.
But those Medicare Advantage world, it seems like we’re still constantly seeing those changes and usually not in a positive light for the participants. And it’s obviously you start looking at the cost of healthcare, the cost of some of these things to implement these plans, to provide the coverages for these plans.
A lot of times we see Advantage plans adding on certain extras, I guess you would say it, additional benefits to be able to use if you’re a part of that plan. With where the healthcare world has gone, with the cost of things continuously going up, that spread that these insurance companies are looking at is constantly getting squeezed. And what ends up happening then is some of those extras that were added on that was a nice little additional benefit are being taken away.
Mike Steigerwald:
Yep. Yep.
Nate Kreinbrink:
And I think when you start looking at that, again, not that you ever made your decision just strictly based off of those benefits, but they were a nice kicker for those that decided that the Advantage world was the best route for them.
Mike Steigerwald:
Oh yeah.
Nate Kreinbrink:
But it may not be the case. Those aren’t guaranteed to happen each year. They’re not guaranteed to be there every year that you have that. They’re able to take those away and that’s what we’re seeing.
Mike Steigerwald:
Yeah. And a big thing, Nate, when we talk about the funding and things like that, I mean, if you really take a look at the landscape, realizing that there are more people now that are on Medicare than ever before. All the boomers are basically aged into Medicare now. So there’s more stress on that system than ever before. So some of these changes, while may seem like they’re taking things away, I mean, there’s reasons behind it.
I mean, there are more people on it than ever before. The other thing that comes up listening to various people in the industry talk about this is during COVID, there was kind of this lull because what was the message during COVID was, “Stay away. Stay away. It’s not safe. Don’t come to the doctor. Don’t come to the hospitals because…” And after a few years, once things opened back up, now everyone rushes back in to get the care that they weren’t getting during those few years.
And also what happened then is conditions got worse. If I wasn’t getting the care I really needed to manage certain conditions, well, now that led to a huge influx of claims over the last two to three years, which really we’ve seen a rise in premiums. We’ve seen taking away some of the benefits like you’re talking about. So it’s not just that the companies are greedy and keeping it for themselves. I mean, there’s an underlying issue with the whole program basically.
Nate Kreinbrink:
Right. And I think when you go to the doctor and you do that, I mean, obviously the billing process isn’t instant. I mean, there’s a process behind it as far as they submit it to the insurance, the insurance submits their thing back to the doctor, then they agree upon the coverage price or whatever the case it may be.
Well, you times that by the number of people that are filing these claims, these swings in care, whether up or down, as far as increased care provided, lowered care, like you said, during those COVID years, it takes a little bit for that to be cycled into the pricing system when these companies are looking at that.
And so they’re trying to price this in to be fair for everybody, but it’s an extremely hard thing when you see healthcare costs skyrocketing to where they currently are, and they’re trying to price it competitively, not just for the consumer, but for other insurance companies, for them. It’s a tough world.
And I think that’s what this is the frustrating part for the people that are on it that just want to know what they’re paying—
Mike Steigerwald:
And used to a certain way.
Nate Kreinbrink:
—and used to a certain way. That’s the challenging that you transition into this system. And unfortunately, I don’t see that changing much in the next few years.
Mike Steigerwald:
And I think there’s one insurer, I know one insurance company, they said this was a remarkable stat, honestly, and it basically stated that this company pays more claims in one day than Amazon delivers packages in a month. And if you’re anything like my house, we’re getting three, four of those a day.
Nate Kreinbrink:
It’s a lot of claims.
Mike Steigerwald:
That’s a lot of claims. So again, just to show the magnitude of how big this landscape really, truly is, there’s reasons behind all of these decisions that are made.
Nate Kreinbrink:
And again, when you’re starting to look in this, it is overwhelming. You start getting close to 65, your mailbox is going to be bombarded with all this junk and everything. And again, it’s important that you have an understanding of the different ways to get coverage, what that is going to look like, not just today, but maybe a couple years down the road, what may potentially change with the plan that you have and make that educated decision.
And when you look at this, I think it’s important to, again, make that decision not just for the day that you’re turning 65, but potentially looking at it for that day when you turn 75.
Mike Steigerwald:
Yep. You got to look at current and future needs.
Nate Kreinbrink:
That day when you turn maybe 85. And again, not that it is permanent, not that it has to be permanent, you are, again, under certain situations able to make changes along the way, but it’s getting tougher to make those changes and advantageous to just pick a plan that, again, may be a little more expensive for me up front, but probably is going to be the most affordable going forward for—
Mike Steigerwald:
Long-term.
Nate Kreinbrink:
Again, the odds are that, again, the way things go, the older you get, the more likely you’re probably going to need care the older that we get. Again, it’s the way things go. So again, the pricing when I don’t need care versus the prices when I do need care, how do I want to pay that and see what’s best for your situation?
Mike Steigerwald:
Absolutely.
Nate Kreinbrink:
So again, all good stuff. You got questions, give us a buzz. Be happy to sit down with you and go through things and just, again, strip away all the ads, all the promises, all that type of stuff that comes with some of that stuff we get in the mail, and then just strip it down and just say, “Okay, these are the facts. This is getting care this way, this is what it means. Getting care this way, this is what it’s going to mean,” and answer some of those questions.
Before we run out of time, I did want to mention that every month, NelsonCorp is raising money for a charity of the month. This month’s charity is the Hiney Heroes program out of the Quad Cities. Again, this is 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 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 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 NelsonCorp Wealth Management are not affiliated. Cambridge does not offer tax advice. For more information, visit our website at www.nelsoncorp.com.