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 representatives, 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 Kreinbrink. Have Mike here with me today. 70 degrees maybe today.
Mike Steigerwald: That sounds great to me.
Nate Kreinbrink: Welcome, what? It was Saturday we had 80, and then 50s, and then…
Mike Steigerwald: Had a whole bunch of snow last week.
Nate Kreinbrink: Snow last week, and then storms coming the next days. March in the Midwest.
Mike Steigerwald: Yes, here we are.
Nate Kreinbrink: March madness for more than a reason, right?
Mike Steigerwald: Well, the good news is that, when snow comes, as we saw, it doesn’t last long. It was here and gone quick last week.
Nate Kreinbrink: That’s definitely the one good thing about it. We may obviously get some more weather like that, but it definitely doesn’t last long. It is good starting to see kind of the plants starting to pop through the ground, starting to green a little bit.
Mike Steigerwald: It’s green.
Nate Kreinbrink: I like that, just kind of color coming back to everything after a wintertime. Next week is April already. So, we are definitely moving. I think opening day for baseball today, right?
Mike Steigerwald: Today, yeah.
Nate Kreinbrink: So, summer’s officially here now.
Mike Steigerwald: Basically.
Nate Kreinbrink: It’s the best day of the year for any baseball fans. Your team is in first place, you have all this optimism going into the year. We’ll see how it plays out after 162.
Mike Steigerwald: Yes.
Nate Kreinbrink: But no, today Mike and Andy took the show last week, talked taxes. Obviously, Andy’s in the dead kind of sprint to the end of tax season here. Had a lot of topics to go over. Last week and every month, I usually try to hit the little Medicare topics. And obviously, we’ve talked kind of the differences of it, but today wanted to maybe switch gears a little bit, and talk about a little bit of pricing, and then kind of how that is evolving, and why it is evolving. Obviously, nobody likes to see things go up. And obviously, in our economy that we’ve had today, that’s kind of been the norm as far as things getting a little bit more expensive, and some of the recent webinars that have been out there that you’ve kind of followed through, and that we’ve watched, have definitely hit on that same tune, but they also gave reasons as to why. And although reasons don’t change that price, it does kind of make sense a little bit as far as what they’re looking at and why they’re looking at these increases.
Mike Steigerwald: Yep. So, we’ve seen it, had clients come in, gotten their annual premium change notices, depending on your carrier that specifically here talking on the Medicare supplement plans, that they come out throughout the year. There’s no set time. Each carrier may operate a little differently. But across the board, there have been increases in those premiums and a few reasons why, which again, doesn’t change anything, other than maybe help provide a little bit of understanding in terms of what’s happening. And I think the number one thing to hit on is just that there are more people on Medicare than ever before. And this year alone, which I thought was a staggering number, but there are 11,500 people that age into Medicare every day this year. So, if you think about the stress that adds to the system, when you have that many people, we have the trail end of the boomers here coming in, and all aging into Medicare, and there’s just more people and people are living longer. So, this is one of the primary reasons. They’re just more people, which means more claims, which means more cost. Also, inflation has hit healthcare. I mean, I think it’s pretty obvious that’s hit a lot of factors in our life, just on a day-to-day. And Medicare and healthcare in its own right is not to be excluded from that.
Nate Kreinbrink: Right. And I think too, when you start looking at that, obviously, as you said, this is just what we’re talking about today is just those that are on a supplement plan.
Mike Steigerwald: Yep.
Nate Kreinbrink: Supplement plans for the most part, you pay a monthly premium and your coverage is covered when you go to get whatever care or whatever doctor you go see at that point in time. So, those monthly premiums are going to be going up. The other part of it, I know you talked a little bit on the way over here was, again, with more people going into it, but they’re also covering more too.
Mike Steigerwald: Yes.
Nate Kreinbrink: So that scope is widening as well. So you have more people coming in and the insurance companies are covering more. Obviously, that is a environment that people are going to see their premiums going up. So that flat monthly premium that you’ve been paying is going to go up a little bit. Again, still covering everything, if not more than what it was, but again, that flat premium is going. And I think people are looking at supplements in the same way where, “Hey, I’m paying the same amount each month, whether I go one time or I go 30 times.” So, they’re going to the doctor, which isn’t a bad thing. It’s just now there’s more care, there’s more claims, there’s more filings. It’s all adding up to that storm where, again, premiums are going to go up just like everything else is.
Mike Steigerwald: Yep. Yep. And again, this is across the board. We’ve seen it across all insurance companies, all the carriers have increased rates. But at the end of the day, it’s still about finding the plan that is right for you and your situation, right? I mean, this doesn’t mean everyone has to go this route. There are options. There are other ways that you can go about getting your care and having additional coverage. It’s just really finding out the true definition of what these plans do, and how they can help you, and what kind of care that you need. I guess bottom line, this is not a sole reason to make a decision one way or the other. It’s just, we’re trying to do is just kind of pass along some info to make a little bit of sense out of some letters that may have come or may be coming to you.
Nate Kreinbrink: Well, and I think too, that’s the one, I guess another part of the Medicare system, and the program, and the process that is confusing, is because, you hear on the news all the time as far as that October 15th to December 7th open enrollment deadline, to go into effect January 1st, that’s not really for supplement changes if you’re staying on the same plan that you were on the prior year. Those supplement plans, like Mike said, again, they can change at any point into the year. And not that they’re just willing, like just crazily just changing these. They have their own fiscal year set for each company. So, it’s whenever their fiscal year then ends and then starts that next one, is when you’re going to get that. Now, that new change to your premium is going to be for 12 months. They’re not going to change it in April, and then change it again in October, then change it again there. It’s whenever their fiscal year ends, you’re going to get that notice from whatever carrier it is that you are getting in that supplement plan through, and then that’s what your premium notice is going to be for the next 12 months with that. So again, drug plans, advantage plans, those type of things, your part B premium, those are set. They go into effect January 1st. This is just for those that are on any of those supplements. Most commonly a plan F, if you’re still eligible for that one, a G, and N, are your most popular ones. Those are what we’re talking about here with these supplements.
Mike Steigerwald: Yep. Yep. And I think just to kind of circle back to one of the things you brought up before, Nate, would also be just that Medicare is now requiring more services be covered than ever before. So again, a good thing for those that are on Medicare, means they have more coverage, but again, that just when you talk about widening that scope, and really impacting when the numbers are just staggering when you think of all of the folks that are of Medicare age in this country.
Nate Kreinbrink: Right. And I think too, like when you start breaking down the cost as far as what you’re paying, and then you look at insurance just across the board in all forms, whether it’s through an employer plan, whether it’s through the marketplace, or whether it’s through Medicare-
Mike Steigerwald: And not just health insurance.
Nate Kreinbrink: Yes. I mean, it’s everywhere with it. So again, it’s not shocking to see that these things are going to go up, but again, it’s just when you start looking at this and you’re coupling this with the minimal cost of living adjustments, everything else getting more expensive and everything, now this is added on top of that. When you get to retirement and some individuals may be on a pretty tight fixed budget each month, this is going to kind of tighten that a little bit more when it comes to what those supplements are going to be each month.
Mike Steigerwald: And not only that, but then you couple that with the Part B premium, and you may or may not be impacted by some IRMA charges that may increase that, where you start adding up the figures, and many times people think going on Medicare is… And many times it is, but they think it’s going to be… It would cost less, as I transition to Medicare, than maybe my employer plan or anything like that. But again, sometimes depending on the situation, maybe that’s true, maybe it’s not.
Nate Kreinbrink: Right. And again, like I said, they’re not just going to change it. They’re going to send you out a letter letting you know if you get any of those letters and then you’re confused by it. I mean, we can kind of go over it with you if you’ve got questions and let you know. Obviously, look at different options, but again, it’s not just the increases that we saw on the supplement side, the advantage plan, the drug plans, they did their increases back in that open enrollment period with it. Whereas supplement plans stayed flat, and now they’re catching back up to where those increases were, or getting ahead of the increases, which are going to go up again and probably for the advantage in drug plans during this year’s open enrollment period here at the end of the year. So again, it’s not news that people want to hear, obviously, but again, with the tunes, and again, them saying again that there’s more people coming into the plan, which they have to cover, which means more claims filed, we’re covering more things. Again, that’s the insurance’s way of saying, “Well, we’re going to charge you a little bit more.”
Mike Steigerwald: Yeah, yeah.
Nate Kreinbrink: And so again, got questions with it, let us know. We’d be happy to help you out. I did want to mention here real quick before we run out of time that every month NelsonCorp Wealth Management is honoring a charity of the month. The charity for March is the Little Bellies Big Love Program out of the YWCA program here in Clinton. 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 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 representatives 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.