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 Kreinbrink. I have Mike Mike Steigerwald here with me. September’s flying right by.
Mike Steigerwald:
Yeah.
Nate Kreinbrink:
It actually feels like fall.
Mike Steigerwald:
It’s definitely fall today. Cold and rainy, wet.
Nate Kreinbrink:
Yeah. And it’s been that way for what? A week? Week and a half?
Mike Steigerwald:
Solid.
Nate Kreinbrink:
But no, it definitely starts to feel that way. I mean, obviously the local schools, homecoming is big and you see the toilet paper and the trees and the festivities going on through the week. And again, fun time of the year. I mean, obviously football’s going on, baseball’s getting into the exciting time of the year. Halloween decorations coming up. You feel that different transition of the seasons, I guess.
Mike Steigerwald:
I’ve already seen Christmas decorations.
Nate Kreinbrink:
I’m not ready for that yet. Definitely not ready for that yet. Let’s give Halloween its due.
But no, it’s that time of the year. And again, it’s towards the end of the month here, we always talk Medicare a little bit. And that time of the year for Medicare world is a changing time as well. And we’re kind of coming up on that. And obviously we have open enrollment period coming up, which we’ll hit on here a little bit towards the end of the show. But another big thing is that there’s a change in the other side of the insurance as well. For those individuals that are over the age of 65, still working or still has a spouse that is working because they have creditable coverage, don’t have to go on Medicare, but there’s a change on what they’re looking at for creditable coverage.
Mike Steigerwald:
Right, right. So that’s something to just be aware of, be on the lookout because it is the plan’s responsibility to let the members know if the coverage that they offer is creditable or deemed creditable. And not to get too far into the weeds, but the way they calculate what is creditable coverage or not is changing. So if your plan really doesn’t change, it may not fall into what they deem as creditable any longer. And if that’s the case and you’re over 65, you need to have a Part D plan. You’re going to have to sign up for a Part D plan.
So again, it’s the responsibility of the plan to let them know, but also the plan members, one, don’t ignore anything that you get from your plan. I know probably easy to overlook, you probably get these letters and probably gets mixed in with all the other Medicare mailings and everything else that you get. But definitely be aware of that because if it is the case that your plan is no longer deemed creditable for your drug coverage, then you’ll need to sign up for a Part D plan. Otherwise, you’ll be subject to a late enrollment penalty.
Nate Kreinbrink:
Well, and I think this goes back to that misconception of people thinking that I have to take Medicare as soon as I turn 65. And again, not necessarily the case, but you have to have coverage either through your employer plan or through a spouse’s employer plan. And again, it has to be a creditable coverage plan to do that. If you don’t, when you do go to apply for Medicare, you are going to essentially be assessed a penalty for not having that.
Mike Steigerwald:
Right, right. And again, we’ve hit on this before on the program, but those penalties, what people don’t like about them, they never go away.
Nate Kreinbrink:
Yes.
Mike Steigerwald:
They stay with you forever. So really, really important just to get it right, pay attention to everything that comes to you, read up on it, ask questions. I mean, you can ask HR, ask the plan itself. Just make sure that you know what you have and that it qualifies for you to maintain creditable coverage.
Nate Kreinbrink:
Well, and this time of year as well, you’re going to be getting more stuff in the mail. And again, I think everybody falls into it, especially this year you’re getting all those political ads in there. Now you’re starting to throw on Medicare stuff. And the reason why you’re getting the Medicare stuff is because we are on the heels of the open enrollment period coming up here starting October 15th, that runs through December 7th, something that happens every year like that where you can make changes. So again, these Medicare companies are just blasting out these mailers to people that essentially are over the age of 65, again, seeing if they want to change and doing it. So again, you get bombarded with all this mail coming in. It’s very easy to just rip it and throw it away.
Nate Kreinbrink:
And throw it. So again, just be cautious, be careful when you’re getting this. Take a quick look at everything to make sure it isn’t anything that you do need. But again, this is the time of year where we are going to see changes and whether you’re on it and you’re not going to make any changes, you may be getting letters in the mail or getting notifications that your plan is either, one, changing, in the worst case scenario getting dropped, or, again, premiums getting changed.
So again, there could be some adjustments with that, but the biggest thing that we see during this open enrollment period is making sure that we take a look at specifically your drug plan and making sure that the plan that you are on currently is still the one that you want to be on starting January 1. And especially for those that maybe have a list of prescriptions that they’re on, we want to make sure that those are all covered.
Mike Steigerwald:
Yep. Yep, that’s a big thing. Again, we’ve talked about this before, but having your drugs covered under the plan gives you a layer of protection. All of those Part D plans have an out of pocket maximum that you would pay for covered drugs. So the premiums don’t count towards that, but for your drug coverage, there is a maximum that you’ll pay. This year was $2,100. Next year, probably going to trickle up a little bit. We’ll know more officially come next month, but just be aware of that.
I mean, again, so often we hear, “I have my plan, it’s worked for me, it’s been fine.” But people don’t realize that those drug plans can change. The list of prescriptions that you take can change. And really, the formularies that whether a drug is covered or not by your plan can change on an annual basis. So really important to just do the homework, make sure you’ve got what you need to make sure you’re not paying more than you need to.
Nate Kreinbrink:
Well, and I think too, that misconception that you just hit on is that 2,100 max out of pocket is only for covered drugs. I think people hear that max out of pocket of 2,100 and kind of just think that that is an umbrella that covers everything no matter what. No, it’s only for covered drugs. So again, plans change. Everything that you’re taking for prescriptions is covered in 2026, but your drug plan is dropping one of those prescriptions for ’27. Again, you’re either going to be, one, on the hook for 100% of whatever that costs or you need to look to do that.
Nate Kreinbrink:
And that 2,100, that max out of pocket would not cover that not covered drug starting in the new year if that’s where it is. And some of them are just don’t take anything. They’re just looking at ones that maybe had very little, if any, monthly premium, kind of got used to that plan. Well, I don’t know if that’s necessarily going to be the case anymore.
Mike Steigerwald:
Yeah. Yep. So back a few months back, there was a Part D subsidy that the government basically stopped, that was supposed to run all the way through 2027, but they kind of cut it off early. So the anticipation, and again, we’ll know more about this in the next week or two, but the anticipation is that there will be changes to plenty of Part D plans, plenty of the Medicare Advantage plans that include prescription drug coverage. So just be aware of that. Again, we don’t want to put a whole bunch of fear in people listening, but it is an important time of year and really crucial to get it right.
Nate Kreinbrink:
Well, and with everything else, I mean, it evolves as you go, especially in the Medicare coverage world, we’re definitely seeing that from year to year now as far as coverages, what is covered, what is not covered, premiums and how this is kind of getting adjusted from year to year. So again, the best case scenario is just to check on them and kind of make sure that you’re on the same page. The other part of this is maybe your current drugs, but maybe you had a condition that came up through the year, where you started being on a different prescription, where you want to make sure you take a look at any life events, life changes, and again, more specifically those prescriptions that you had there.
Mike Steigerwald:
Yep. Yep. It’s very, very important to get that right. I mean, like I said, there’s countless people that think that it’s all set and it’s worked for them for years, but what they might not even notice, I mean, it’s very common for people to not notice that their premium is going up because maybe it’s deducted right out of their Social Security check and they’re not watching it very closely. They know they get the cost of living adjustment with your Social Security check, but also if your premium goes up for your Part D plan and you have it taken out of your Social Security check, I mean, that also goes unnoticed sometimes and those changes could be more significant this year than they have in the past.
Nate Kreinbrink:
Right. So again, just take a look. And again, it’s a time of change. It’s not the most straightforward program, understanding all the different letters and coverages and deductibles and deductions and penalties and all this. So if you have questions, if you’re wondering, or if you’re new to it and you are getting onto it for the first time, definitely reach out to somebody to help you kind of navigate through that. But again, that’s coming up. Open enrollment period, October 15th through December 7th. Make any changes to go into effect January 1st.
I did want to mention here real quick before we run out of time that every month, NelsonCorp is featuring a new charity of the month. For the month of September, we are focusing on the charity of the Hand in Hand out of Bettendorf.
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.