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 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 bringing you today’s show. mid-October, it is fall out there. We have a little frost on the ground, starting to see that in the mornings so as it comes, looks like we got some precipitation coming the next couple of days, which for Friday Night Lights, Friday night football there, looks to be a little cool and damp, so get those ponchos out, get those parkas, whatever it is. I think cooler temperatures is coming.
So I was walking into the radio station this morning, Gary was going through the Major League baseball playoff scores and updates, and it’s kind of fun to kind of continue to watch that. The Texas Rangers won last night, swept the Orioles. We’ll head on to the American League Championship Series, but with the Rangers there, there’s like three guys that were former affiliations with the LumberKings, when Clinton LumberKings, the team here, was affiliated with Texas, some of those guys are still in it and want to wish them the best of luck. It’s neat to see some local people that came through here still involved in having success there at the top level. I was texting with one of them last night. He said it was the loudest baseball game he had ever, ever been to, so I’m sure that’s that dome that they have in Texas, it was rocking. Again, want to wish them the best of luck.
So getting into today’s program, we had Andy Ferguson with NelsonCorp Tax Solutions on last week kind of filling in. Usually David does the first Wednesday of each month with his half hour live program. Had a little something come. He’s going to do that next week, so Andy filled in. He obviously went through some of the tax things with the tax deadline coming up October 15th. For anyone who filed an extension before the April deadline, that extension deadline is October 15th. So we are very, very close to that. If that applies to you, you want to make sure you get that in. I’m sure a lot of the tax preparers at this point in time are probably on a best efforts to get that process to get it turned in. So if you are one of those, don’t hesitate any longer, get that in to meet that deadline.
October 15th also is another kind of kickoff for Medicare open enrollment period. So that Medicare open enrollment period extends from October 15th through December 7th. Now, during this time, you can look at any of the upcoming plans for 2024. If you were on a Medicare plan, a Medicare Advantage plan, drug plans, anything like that, you can make that switch during this open enrollment period and have it go into effect January 1. So again, if that applies to you, you want to make sure you look at that. The plan options actually came out October 1st. As far as what the new plans are going to be for 2024, if there was any increases in premiums and what those look like and you can go to medicare.gov and look at all the updated plans. You can enter in your zip code, what kind of a care you wanted to get and look at this, the plan specifically, they have a plan finder tool through their website that you can take a look at and go from there.
And again, I would encourage everyone to kind of take advantage of this. Whether you’re on a plan, you’ve been on it for years, you’re happy with it, you want to understand what else is all out there. There’s nothing to say you can’t just take a look, see if there’s anything that has maybe a little bit better coverage, a little bit better network if you’re with an advantage type of plan and go from there. And if not, then you stay where you’re at. But again, taking advantage of that, I know premiums do change. Sometimes what they cover does change. You want to make sure that you have the most affordable one and that it is covering what it is that you’re looking at.
So again, looking at Medicare, it’s obviously we all get to that age 65 or if you have a qualifying condition prior to age 65 but getting to that age 65, I guess you would call it a milestone, your birthdate, a lot of times it becomes overwhelming. You start getting the brochures and the pamphlets and all this stuff in the mail from all these different companies telling them their policy or their plan or their coverage is the best and that you need to go here and you need to do this. And it becomes overwhelming. And I think it’s one of the other things that people deal with in retirement that they didn’t really anticipate being as big of a deal as what it was as far as health insurance, Medicare, all that type of stuff.
So if you get closer to that age, you want to understand the different types of it, I guess you could say. And when I say different types, there’s two main ways that you get coverage. And the first one is what we call original Medicare. So that is your Part A and your Part B premium. Your Part A premium, for most of you while you’ve been working, you’ve been paying into it. Your Part B premium covers your doctor visits. That you pay every month to get that service. Okay? That Part B premium is set and it is based off of your income. So for the majority of people, they’ll pay the first tier. The higher your income gets, the higher you will pay for that Part B premium, you don’t get any more coverage, you don’t get anything additional, it’s based off income. Your income is higher, you’re going to pay more.
For 2023, that was $164.90. The Part B premium for 2024 has not came out yet. It should here probably within the next week or two. The cost of living adjustment for social security is set to come out here, maybe by the end of the week. That Part B premium usually follows pretty darn close after that so be looking on that. Some of the estimates say it’s going to be 1.74 for next year so if it’s right around there, look for an increase. But going back to the different ways to receive care with the original Medicare, you have your Part A, your Part B, you can add a drug plan, and then you can add a supplement plan which covers any gaps. So that’s how you get it. You pay that on a monthly basis. And when you go to the doctor, when you go to prescriptions and all that, it’s pretty much all covered through there.
You pay that monthly amount, you know what you’re going to pay and that’s the way that that way goes. The second way is what we call a Medicare advantage. And a lot of times these are the ones you see advertising on TV. A lot of Medicare Advantage plans are through private insurance companies. Your Part A, your Part B is included through that and you can usually add a drug plan if you need to through that, and that’s how you get coverage. Premiums, monthly amounts may be a little bit lower, but you may pay more than obviously as you go to the doctor when you do use it. So a couple different ways to go and look at some of those things. But understanding the differences is going to be key.
Depending on how long you’re on a current plan, if you want to switch during that time period, you may have to be underwritten where they’re going to ask you a couple questions. If you answer a certain way to some of those questions, they can decline you and not take you. When you initially enroll, so during your first enrollment into Medicare, whether that’s right when you turn 65, whether that’s after you turn 65, after you just lose your coverage through an employer or spouse’s coverage, when you first initially apply for Medicare, you cannot be declined. You can go any route you want to go to, any company you want to go to and they have to take you. After that initial time and you want to change, okay, there’s going to probably be some underwriting and some questions you’re going to have to do to do that. So again, I want to look at it in the most cost effective way, but we also want to look at it from possibly a longer term approach to say, down the road, where am I going to be best suited at? And going that route.
So drug plans are another big kind of thing to look at through medicare.gov. You can also look at different drug plans. You can add in all your prescriptions, see which ones are preferred, which ones are different tiers, is what they call them to see what they cover during any coverage that you’re looking at through that one. So again, a lot of stuff that kind of gets thrown out there with Medicare, getting coverage from it where you want to look at and going from there. The premiums for Medicare are based off of your income. They’re looking back two years. And the reason they do that, that is the last full year that everybody has their tax returns reported to the IRS, which is why they say it’s a two-year lookback as far as what they use for your income. So for 2024, they will look at your income for 2022, your reported income for ’22 is what will be used to determine the price of your premium for ’24.
Now, there is some ways that you can appeal that. You had a life-changing event during that year that was just a spike in income. You are working, you’re no longer working. There’s an appeal process that you can look at to say, “Hey, that was an out of the ordinary higher income year. That’s not what it normally is.” You can appeal it and hopefully get that down because again, they have what they call IRMAA. It’s your income-related charges that go on there. That would add additionally to that Part B premium for the whole year. For every month you’re going to get that and possibly to any drug plan that you may have.
So again, Medicare, a lot of the services out there, it’s good coverage, great coverage. I think it’s just intimidating to a lot of people when you have all the different options in there. Which route route do I want to go to? You hear horror stories as far as in network, out of network, it is covered. It’s not covered. They won’t take coverage. Just understanding what the differences are and see what option actually is best for you and is going to be best suited for you with any prescriptions, with any doctors, with any coverage that you may need. So questions on us, seek out your trusted professional, be happy to help out in any way that we could.
Before I do run out of time here, did want to mention that every Friday, NelsonCorp Wealth Management is wearing jeans for charity. Money raised in the month of October will be donated to the Clinton County Special Athletes. Again, this is Nate Kreinbrink 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.