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, Inc. a broker, dealer member FINRA, SIPC. Investment advisor representative Cambridge Investment Research Advisors, Inc. 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, got Mike Steigerwald here with me. Fourth Wednesday of the month. Hard to believe January’s over, not that I’m complaining.
Mike Steigerwald:
When we leave at night and leave the office, you still see some sunlight, and that’s a nice thing.
Nate Kreinbrink:
And again, January nearing the end. We’ve been fairly fortunate with winter weather that we’ve had, compared to other parts of the United States that are not. I had a call with a client living down south and we had grass showing and they had snow. And they’ve never seen snow down that way before. So-
Mike Steigerwald:
Midwest is the place to be.
Nate Kreinbrink:
Come north for your winter, you’ll love it. But again, moving right along, again, it is the fourth Wednesday of the month. We usually talk a little Medicare here today. Today’s no different. Want to get into some of those topics and again, maybe make the complicated a little less complicated. And again, a time when you’re transitioning into a world that obviously no one has experienced yet because they’re used to having coverage through their employer, maybe a spouse’s plan. Again, now we’re into a world where I have to get it on my own. And again, understanding the alphabet soup that it is, Medicare, it is overwhelming at times. And I think that’s the frustrating part.
As we get into, again, this time of the year, obviously we talked last month when we were on and the month prior to that, we were in the annual enrollment period for Medicare. October 7th through December, going into that time period. Again, if you’re currently on a plan and you’re looking to make changes, that is the time to do it, to any drug plans, that way it goes into effect January 1st. Now, and I think it’s a misconception that people have a lot of times, is that’s not the only time that you are able to technically change plans or not change plans, but enroll in a plan. And those instances happen when, one, you initially turn 65 or you lose creditable coverage through an employer.
Mike Steigerwald:
Yep. So those are two examples, certainly. And I think that’s just something to keep top of mind. Oftentimes, you get caught up in the idea that these periods of time are the only periods of time that you could do anything. And okay, well, I have to wait until October or November to enroll. Well, that’s not the case. And oftentimes, you can be penalized if you enroll late. So if you are in a time period of aging into Medicare, just turning 65, or you lost credible coverage either through your plan or a spouse’s plan that you were on, then yeah, it’s time. You absolutely can and should enroll in Medicare parts A and B, and then start looking at options for some additional coverage.
Nate Kreinbrink:
Right. And I think when you hit those milestones, again, whether it’s you turning 65 initially, or again, you losing credible coverage, you have a seven-month window around that anniversary date. Where again, the three months prior, the month of, and then the three months following that, where again, you need to get your coverage during that time period. And again, as Mike said, I mean there are penalties that will apply if you do not get it during that time period. So again, you want to make sure that, again, you’re planning ahead.
And it is a transition. The part, part B, if you’re enrolled in Social Security, but maybe on a different plan, you don’t want to necessarily have coverage. There’s still some things you need to look at during that time period. Otherwise, again, if you’re already filed on social security, you’re probably going to be automatically enrolled in that part A and B, whether you want to be or not.
Mike Steigerwald:
Yeah. And I guess to just piggyback off of that, Nate, there’s also situations where you don’t have to, right? Just because you’re aging into Medicare at 65, if you’re still working, still on an employer plan, if you’re on your spouse’s plan through their work plan, then you don’t have to take additional coverage. Or even a lot of times, people decline part B. You’ll enroll in part A to have it. You’ve paid through all these years of working and that essentially pays your part a premium now. But you can stay on the current coverage that you have beyond age 65. I mean, that is a question that we receive quite a bit is, “I turned 65, I’ve, I’ve got to look at Medicare. I know I’ve got to do something.” Well, not always.
Nate Kreinbrink:
Right. And I think that goes into it too, looking at what is right for you, what is the best route. Again, is your employer plan that you’re on, that you’re on with the spouse, is that cheaper than what it would be if you transitioned into Medicare? And in some instances, it is and it is worthwhile for people. You know what? Just if you’re able to, stay on the current plan until you no longer are employed there, then we’re going to have to look at Medicare.
And I think that’s two questions that people need to start preparing themselves for and getting answers. Again, if you are transitioning to a time when you are 65, okay, you’re employed. Your spouse is on the plan with you at work. One, does the plan allow you to stay on the plan once you hit 65? A lot of them do. I have seen some certain instances where, again, if you are able to have coverage outside of that, once you hit 65, you have to go that way.
The other part is then that spouse. Sometimes, again, when you hit 65 or if that spouse is 65, they’re not able to stay on the plan, if they’re able to get coverage at some other places. Again, it’s not a hundred percent one way, it’s not a hundred percent the other way. Every plan is different with what they allow. So again, as you get closer to those milestones, those are questions that you need to have the answer to. So again, if you’re able to stay on once you get there, great. If it’s going to have to change and one of you may have to get off because you’re 65 and you have the ability to get coverage elsewhere, again, what does your plan allow you to do with that way?
Mike Steigerwald:
Yeah, so contacting plan administrators, HR departments through employer plans, they’ll have some of these answers. Certainly not the first time that they’ve seen it. You won’t be the first person or the last that kind of has these questions. And you’ve got to be able to address it and have the answer for your situation.
Nate Kreinbrink:
Right. And I think that goes with, again, when open enrollment period leading up to an open enrollment period, if you’re of age to receive Medicare, you probably got a lot of junk in the mail. If you’re going to be turning 65 here in the coming months, I’m going to tell you, you’re going to be getting a lot of junk in the mail. And again, that’s led up, it’s sales pitches, they’re flyers. You go through it and obviously they say, “My plan’s the best, my plan’s the best, my plan’s the best.” And again, understanding what it is and what are the differences between them.
In the meantime, if you receive something outside of those kinds of windows, I guess, that they inundate you with information to, if you get something from your current plan, it may be something to take a look at to see what it is they’re actually telling you. If you don’t have a clue, bring it to somebody so they can let you know, is this important? Is it not important? Let them know. Don’t just take it, “Oh, I don’t need this.” Rip it, and then throw it.
Mike Steigerwald:
I think people get in that habit of getting all of this stuff around this time of year or just past this time of year when we’re in those open enrollment stages. And they look at anything now that they get that has anything to do with insurance companies or their Medicare plan. And they say, “More junk, more junk, more junk.” Well, not always is that the case either. Companies, maybe if you are on a plan, will be sending out changes in premiums, changes in coverage, or networks. All of these things are going to be communicated and have to be communicated to you. And the way they typically will do it is via mail. So, don’t just assume that everything is going to be junk. If it comes from a company that you are associated with, you maybe are a plan member currently, very important to open that up and take a peek.
Nate Kreinbrink:
And again, it goes through all the plans. I mean, whether you have a supplement, whether you have an advantage plan, and also drug plans. I mean, drug plans change quite frequently with that. Whether your premiums change a little bit, they give you an updated as far as, “Hey, new year, this is what your updated premium is.”, whether it’s community-based, aged-based they usually fluctuate a little bit with what you have through there. So, a lot of important stuff when it comes to Medicare, looking at what your options are. And then if you are on it and you’re like, “I’m just going to stay on this, I don’t want to think about switching.”, well, there are changes that come along the way that you need to be aware of with it.
Mike Steigerwald:
And big changes happen. As we discussed on the program, big changes came this previous enrollment, and certainly foresee more changes ahead. So as confusing as we like to say the alphabet soup is, there will be more changes ahead.
Nate Kreinbrink:
And that’s inevitable with it. And again, questions come up, we’ll try to kind of address them each week when we have this show on what we’re looking at, what looking ahead, the different types of plan networks, and all that that go into it. And again, is your situation changing? If you had throughout the course of the year, you have an update to your health situation, maybe you take different prescriptions during that time period. Keep that in mind because we need to then maybe look at something during the open enrollment period towards the end of the year, if your situation changes during this. But if you are at one of your initial enrollment periods, again, turning 65, losing coverage through an employer, separating from an employer, needing to look at it, that is able to be looked at throughout the course of the year.
Mike Steigerwald:
Certainly.
Nate Kreinbrink:
So, all good stuff. We are running out of time. Did want to mention real quick that every Friday, NelsonCorp Wealth Management is wearing jeans for charity. Money raised in the month of January will be donated to the Lomore Volunteer Fire Department.
I also want to mention it is NelsonCorp, team member TJ’s birthday today.
Mike Steigerwald:
Happy birthday, TJ.
Nate Kreinbrink:
Happy birthday, TJ. I know you’re listening, but again, happy birthday. So, 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, FINRA, SIPC. Investment advisor representative Cambridge Investment Research 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.