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, I have Mike joining me today. This is the last show in November. Tomorrow’s Thanksgiving.
Mike Steigerwald:
That’s unbelievable and it is a windy morning.
Nate Kreinbrink:
Oh, my goodness. It is blowing like crazy. And first, I think realistic chance of some of that white stuff coming in this weekend.
Mike Steigerwald:
I don’t think as bad as maybe they once thought earlier this week. I heard reports of several inches. Now I think it’s maybe reduced a little bit, but yeah, it’s that time. It’ll be coming before we know it.
Nate Kreinbrink:
Yes. It’s a fun time of the year, kind of crazy, starting to get into that hectic time as far as schedule wise and all that. If you’re a college basketball fan, like all these tournaments and matchups, and non-conference matchups, it’s kind of cool.
Mike Steigerwald:
Yeah. Feast week.
Nate Kreinbrink:
You have obviously Thanksgiving, NFL football, college games, big rivalry week this week. High school, basketball both sides of the river, wrestling both sides of the river. Christmas programs, Christmas concerts.
Mike Steigerwald:
A lot going on.
Nate Kreinbrink:
Enjoy it. Enjoy it. Having Mike on last Wednesday of each month, we normally try to focus on Medicare. And obviously, the time of year that we’re at with this, it also coincides with some important dates with Medicare as well. Obviously, we’re kind of winding up, hitting that, I guess you would say, final stretch, final endings of Medicare open enrollment period. And it’s been one that we’ve seen a lot of change. A lot of things that maybe were consistent over the past couple of years may not necessarily be that way going forward as far as at least for 2026 more specifically, and then what it really entails is drug plans.
Mike Steigerwald:
Yeah.
Nate Kreinbrink:
And people that are on Medicare that have a drug plan, a standalone drug plan specifically, is, again, you want to make sure that during this open enrollment period, which goes from, started October 15th, runs through December 7th, you want to take a look at that drug plan that you currently have in place. Make sure that the drugs or prescriptions that you are on are still covered in the same manner and the same tier as what they were for 2025, be for ’26. Another big change is if you have a drug plan just to have it and paying a very little, if any, monthly premium. Odds are that you’re going to probably start paying a monthly premium starting in 2026. So, if you have it set up where it comes directly out of your social security benefit, you had it set up for years past. If you don’t do anything, you’re more than likely starting in January going to see a little premium taken out for that drug plan.
Mike Steigerwald:
Yep, yep. And I will, just to kind of piggyback off that thought, Nate, we’ve seen a lot recently in the last really two years, and really this is going to continue just the way that the landscape is, where changes are made every year. Not only do the plans change, the formularies change, meaning the list of covered drugs by the plan, whether that’s a standalone drug plan, or a Medicare Advantage plan that has prescription drug coverage. Those plans change how they cover the drugs.
And we can cite several examples that we see with clients all the time. And one of the biggest mistakes I think that we see and I hear come from clients is that, “Oh, I’m all set. I have my stuff already set up. I have my Medicare, I signed up. I have my plan already, and it’s working just fine.” Well, that may have been true for last year. Do we know that it’s still the best thing for you going forward? So, doing a little bit of homework, being able to verify that, yes, indeed, the plan is still the best for you, fine, easy, no change necessary. However, certainly could be the case that there’s a better plan out there that may cover your prescriptions better than what you currently have.
Nate Kreinbrink:
Right. And one thing that I hear from people that are on drug plans when I bring up the topic of this, what we just said, as far as changes, or maybe a premium going up, or starting to pay a premium, or this drug’s not going to be covered, they always say, “Well, they never sent me a letter telling me that.” Well, with drug plans, they’re not going to just send you a letter telling you that your premium is going to go from $0 monthly to $5 or $10. It’s just if you’re on it and you don’t make any changes, starting next year, that’s going to change. And so that’s why during this open enrollment period is the time period where you need to get on, or go to somebody to have them run your prescriptions and everything for 2026 to, again, make sure that that is where exactly it is that you need to be.
Mike Steigerwald:
Yep, yep. And I will say there have been a couple other things that we’ve run into from clients where questions that we commonly get would be, “Well, if I don’t have coverage for this drug anymore, what can I do?” So yes, you can change the plan, you can change if there is a drug or a plan that covers that drug, we would recommend that. Ideally, you can find a plan that will cover all of your prescriptions, because at least then you’re protected by the maximum out of pocket, which for 2026 will be $2,100. That is for covered drugs only. So, making sure that your drug is covered by your plan is crucial, especially if you’re taking something that might cost you a few bucks when you’re going to get it filled.
Nate Kreinbrink:
Right. And I think when you start looking at this, I mean, it seems to be more prevalent over the past few years, but every year it seems like the cost of Medicare coverage, even staying status quo with what you had last year, those prices are going to go up. I mean, Part B premium went from 185 to 206 for next year.
Mike Steigerwald:
Yep.
Nate Kreinbrink:
So, that’s the amount that comes directly out of your social security benefit. So, more than likely that big 2.8% cost of living adjustment that you’re going to get in January for Social Security is probably going to be the bulk of it eaten up by the increase in Medicare premiums and your drug premium.
If you’re on a med sup, more than likely it’s your either age-based pricing or community-based pricing, meaning if you’re age-based, you’re one year older, your premium is probably going to go up because you’re one year older. Community-based pricing is a little bit more up in the air depending on how many people in your area have that plan and how that’s looking. But again, don’t be surprised if those prices continue to go up.
On the Advantage side, again, looking at networks, is my doctor still in the network that I need to go to with that advantage plan, looking at my max out of pocket for a given year. That max out of pocket, again, starts over every January 1st. So, whatever the new max out of pocket is for that year, it may be 3,900 this last year. Now, this coming year, it’s going to be 4,100 or 4,500 or somewhere where it is.
So again, they’re going to continue to go up. So again, it’s looking at it is the plan that I originally signed up with still the best one for it, and again, where else do we want to look for it?
Mike Steigerwald:
Another common thing, Nate, that we see with those, particular on the Medicare Advantage side would be that, in the past, many of those had zero premium, zero deductible. There are several of those plans now that do have health deductibles, or drug deductibles, that may have not been there in the past. So, maybe you were used to every January, the plan just picks up and covers everything right away, may not be the case anymore. So again, really can’t stress enough how important it is to just review it. We’re happy to help take a look for you, just to confirm. And if there’s something out there that’s better, or will suit you better specifically, then absolutely we can provide some of that advice.
Nate Kreinbrink:
And I think too, it also goes for those individuals that are looking to maybe retire in the next 12 months. It’s a good time for you to start looking, you can’t obviously sign up for it now, but start looking at, and start understanding the different ways to get coverage. And I think that’s a big unknown that people are like, “Well, isn’t it just Medicare?” Well, it is, but there’s different paths to go down depending on how you want to get your care, as far as paying monthly premiums, to not pay much when you go, pay a little bit lower monthly premiums, but pay a little bit more as you go, networks, no network… There’s a lot of decisions to be made. It’s not like when you’re at your group plan where it’s like, “Hey, we’ve got these reactions.”
Mike Steigerwald:
Options A and option B, yeah, yeah.
Nate Kreinbrink:
There’s different paths to go. And I think that’s a misconception or something that people, again, they just don’t know.
Mike Steigerwald:
Yeah. I think oftentimes, like I said, it gets overlooked where you think that you can just make a decision, or it’ll be taken care of and it’s real easy, right? Maybe I’m approaching retirement and think, “Okay, then I just go on Medicare.” We hear that from people all the time, “Oh, well, then I switched to Medicare.” Okay, well, what does that mean? And do you really know what path you want to go down? And if you do, great. I mean, that means you’ve done your homework, that means you have a bit of understanding of how this all works, and make sure that whatever path you choose does meet your needs.
Nate Kreinbrink:
Right. And you start looking at it too, the different parts. I mean, parts A and B is run through, they call it original Medicare, run through the social security through the federal government, but any drug plan, any advantage plan, any supplement is run through private insurance companies. So, two different sides of the spectrum, again, using both sides, but again, there’s differences when it comes to that. And understanding it, are you on social security? Are you not on social security? What are your steps? And what is the timeline if you’re looking to retire on this month? Okay, let’s back into that and say, “Okay, this is a timeline where we need to maybe start getting some of these things done.”
Mike Steigerwald:
Yep, get some ducks in a row.
Nate Kreinbrink:
So again, there’s a lot of stuff that goes into it. Again, it’s complicated, it’s an alphabet soup, it’s a mess, but we’re trying to make, again, trying to take a complicated topic and make it as simple as we can for people to make sure that they understand what it exactly it is that we are getting into as we approach that time of their life. So questions, give us a buzz. We’d be happy to sit down with you and walk through it with you.
Before I run out of time, I did want to mention that every Friday NelsonCorp Wealth Management is wearing jeans for charity. Money raised in the month of November will be donated to the Dolly Parton Imaginary Library here in Clinton County. Mike, I appreciate you for joining me today.
Mike Steigerwald:
Of course.
Nate Kreinbrink:
Want to wish everybody a happy Thanksgiving. Enjoy that winter weather.
Mike Steigerwald:
Yes. Happy Thanksgiving.
Nate Kreinbrink:
We will talk to you in December. 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