RJS 10-11-25

Episode Transcript

Speaker 1 (00:00):
Good morning to all. Craig Shillig here and this is
Safe Money. I'm here every Saturday to talk with our
listeners about financial strategies we use to manage and protect
assets safely. I've been an insurance agent for over twenty
five years. During that time, I've learned a few insurance strategies,
like using annuities as safe money harbors, or using cash

(00:23):
value life insurance to supplement retirement income. Just a reminder,
you can call our office at five six three three
three two two two zero zero if you'd like to
set up an appointment to discuss your individual situation, or
you can email me at Craig at Craigshillig dot com.

(00:44):
And that's my name, cr Aig at cr AI G
S c h I L l I G dot com.
Given all the changes in the my virtual community, meetings
are kind of on hold right now. I'll talk to

(01:05):
you more about that a little bit later. Remember last
week that I talked about October being National Financial Planning Month.
Today I want to talk about Medicare. It's Medicare season
and there's a lot of changes coming up for twenty
twenty six open enrollment for Medicare Beneficiaries begins this Wednesday,

(01:27):
October fifteenth, and runs until December seventh. Companies are pulling
out or pulling back in several areas around the Quad Cities.
Benefits are being pulled from some plans, maybe silver Sneakers
is being removed, or a reduction in some over the

(01:49):
counter benefits due to lack of usage. Some of you
will be receiving a SAR SAR letter SORROW stands for
Certain Area Reduction letter if you haven't already received one.
If you get a Star letter, know that you need
to pick up a new plan for twenty twenty six

(02:11):
or you won't have any coverage in January. If you
have a United Healthcare Plan Plan code zero zero zero four,
you will be receiving a Star letter. Briefly, some of
the changes for twenty twenty six. Health costs are going

(02:32):
up and reimbursement rates for insurance companies are lowering. Some
of this is due to the Triple B, the Big
Beautiful Bill. All of those exams and procedures that got
delayed during car are now beginning to show claims on
the health insurance roles. How many of you have had

(02:52):
a procedure this year? Did you go in for a
check up or an exam, I know that I did.
Medication costs to the insurance companies are also going up
in twenty twenty six. This year, insurance companies pay twenty
percent of the overall drug costs per beneficiary. In twenty

(03:13):
twenty six, insurance companies will have to pay eighty percent
of the overall drug cost The part dy drug cap
will be two dollars in twenty twenty six, the insurance
companies will have to pay for any drug costs amounts
over the twenty one hundred cap. How many of you

(03:36):
are on a brand name drug like Intrusto or if
you're on some of the new weight loss drugs like Wagovi.
These drugs are very expensive. If you work with it
with a Medicare advisor, please give him or her an
extra handshake or a hug this season. Bring some cookies

(03:58):
or a pie peron and only I like cupcakes or
a fruit basket. Now CMS rules say we can't charge
you a fee for services, So no cash, no gift cards,
and we're not allowed to charge you office fees either.
Just understand that most insurance companies are not going to

(04:18):
pay agent broker commissions in twenty twenty six, no commissions
on several Medicare advantage plans, standalone prescription drug plans, and
many supplement plans are either cutting their commission amounts or
are reducing them. Let me repeat that, most insurance companies

(04:40):
are not going to pay agent broker commissions in twenty
twenty six. When you go to work, now, do you
work for free? And you were employed, if you're retired,
did you work for free? Then several insurance companies aren't
going to pay commissions for twenty twenty six on Medicare

(05:00):
advantage plans, prescription drug plans, and in a lot of cases,
your advisor isn't getting any compensation for helping you make
a choice on your Medicare plan. For twenty twenty six,
Several standalone prescription drug plans aren't going to pay commissions
to agent brokers. And this is on both sides of

(05:22):
the river, both Iowa and Illinois. Several major Medicare supplement
companies are going to cut commissions by two thirds or more.
They basically want you to subscribe to a one eight
hundred number and not use a local licensed agent or broker. Now,
I don't know what the correct answer is, but I

(05:43):
know that even sixty four and nine months year olds
have trouble understanding the Medicare system. The concept that an
eighty or eighty five year old will call an eight
hundred number and feel good about that decision just doesn't
sound right to me. Now, I may sound biased. Now,

(06:05):
all of this doom and gloom isn't all bad. This
also presents an opportunity for those that are receiving the
Service Area Reduction letter. If you get a star letter,
you can move to a guaranteed issue Medicare supplement plan.
So please keep that in mind, and if you don't

(06:25):
understand what I just mentioned, call me and we can
talk about it. Remember, though, in order to qualify for
guaranteed issue Medicare Supplement plan, your current plan must be
terminating in the county that you reside in by a
certain date, and you it says something to that effect.
If you don't have this letter, then you'd have to

(06:47):
go through full underwriting, and given age and health history,
the supplement company can say no, Craig, we won't take
you due to past medical history, or we accept your application,
but we're going to charge you more. We're going to
give you an extra rider charge given health history in

(07:10):
a certain income bracket. Okay, onto Medicare. Let's review the
Medicare systems. Shall we. Medicare has four parts, Part A,
Part B, Part C, and Part D. Now they're all
called parts, not plans. Plans are within a Medicare supplement

(07:34):
and Medicare supplement plans are also letter coded. They're letter
code alphabetized all the way through plan and is a nancy.
Remember government set this up so there's not a lot
of logic to it. Excuse me. Part A is the
hospital piece of Medicare. This covers everything that happens to

(07:58):
you when you're admitting the hospital. The key point here
is you're admitted into the hospital or we're going to
emit you into the hospital. Today you're not in Sometimes
what's referred to is ER or hospital observation. So you
go to the ER. It's not life threatening. They don't

(08:19):
know what's wrong with you, and so they say, we're
going to run some tests and we'll get back to you.
You could be there for an hour or eight hours,
but you're still in the emergency department. That's not part
a hospital. You haven't been admitted to the hospital. Yet
the same issue would arise if you went to the
er and then they sent you home. That would fall

(08:40):
under Part B of Medicare under the medical provision and
not Part A. Hospital Now, there's no monthly premium cost
for Part A of Medicare as long as you or
a married spouse has worked ten years or contributed forty
quarters of fight CA taxes. Now, if you're short on

(09:03):
the forty quarters of fight CA taxes, there is a
way you can buy into Medicare Part A CMS has
a grid that shows what your monthly premium would be
if you're short on the forty quarters. Part A also
has a deductible of one six hundred and seventy six

(09:23):
per hospital admission. That's Medicare part at being Medicare. Part
B is the medical side of Medicare that deals with
everything that happens to you outside the hospital. You go
see your primary physician, maybe you go see a specialist.
It could be outpatient surgery. Knees, elbows, shoulders, hips, wrists

(09:46):
can all be done these days on an outpatient surgery basis.
You go to the facility or surgical center early in
the morning and you can be discharged less than twelve
hours from the time you arrived. If if you don't
have any complications and come out of the anesthesia, okay.
Part B monthly premium for most people this year is

(10:08):
one hundred and eighty five dollars per month, and there's
an annual deductible of two hundred and fifty seven dollars
for the calendar year of twenty twenty five. The rumor
for Part B monthly premium in twenty twenty six will
be two hundred and six dollars, but that's just the
rumor and I haven't seen any hard evidence on that yet,

(10:31):
nor have I heard what the twenty twenty six Part
B annual deductible will be. However, the rumor is it
could be three oh six. Generally, one of my clients
will tell me what Part B monthly premium and deductible
is for the next calendar year before I am officially notified.
The agent's always last to know. Once you have these

(10:55):
two parts of Medicare, Part A and B, then you
can decide if you want to purchase a Medicare supplement
also called Medicap insurance and a standalone drug plan known
as Part D of Medicare, or if you want to
purchase a Part C Medicare advantage plan, sometimes called an
MapD plan. They're also known as the one card system.

(11:21):
Both of the supplement and the standalone drug plan have
separate monthly plan premiums. Most have copays, deductibles, and or
co insurance, depending on the plan you pick. Supplements allow
you to go to any doctor office or facility with
no network or referral needed. As long as they accept

(11:43):
the red, white, and Blue Medicare card, you can go.
You can travel within all fifty states and go to
any facility no questions asked, as long as they accept Medicare.
The Medicare supplement you'd choose with supplement letter code plan

(12:04):
you'd want depending on your budget and health usage. Supplement
Plan G is the most comprehensive plan that one can
purchase at this time. Plan G says that after you
pay your Part B deductible, which this year is two
hundred and fifty seven dollars for the calendar year, the
plan will pick up the rest as long as it's

(12:26):
a Medicare covered service. If you were aged sixty five
years or older back in twenty twenty, you may have
the option to apply for Plan Fison Frank supplement that
was the most comprehensive plan available at that time. You
had first dollar coverage and no deductible copays or co insurance.

(12:50):
That is also the most expensive of all the supplement
plans out there available today. There's also a High Deductible
Plan G or A plan and is a Nancy. High
Deductible Plan G says that after you pay the deductible
of this year's numbers twenty and seventy, the plan would

(13:13):
pick up the remaining Medicare covered amount at one percent
in exchange for a high deductible amount that you must reach.
The monthly premiums on High Deductible Plan G are much
much lower than any other plan available. High Deductible Plan
G is great for those that have a big chunk
of HSA money known as Health savings accounts, or more

(13:37):
recently they're also called HDHP which are high deductible health plans.
Maybe you have one of those types of funds in
an account somewhere. Supplement Plan N is a Nancy is
a true Cope plan. Plan and supplement says that after
you pay your two fifty seven annual deductible, you have

(14:01):
a twenty dollars office codepay for every doctor office visit,
and you have a fifty dollars er copay for every
er copay or for every er visit you would have.
Please note that the fifty dollars copay at the er
is waived if you're admitted in the hospital the same day.

(14:25):
The monthly premiums are also a little lower on Plan
and is an nancy than Plan efforg. The annual premium
increases on Plan n are also lower than Plan Efforg
due to less risk utilization. Some supplement plans offer silver sneakers,

(14:46):
including or a finished gym discount. Others offer writer coverage
for dental, hearing and vision coverage. Depending on which supplement
company you go with, plans are different per state. Some
items offered in Iowa are not available in Illinois, so

(15:07):
please keep that in mind. Also, Iowa pricing of premiums
are generally lower than my clients in Illinois. Now most
plans will offer a household discount. Some will give you
a discount if you're going to do automatic premium draft
out of your checking, but from a cost standpoint, Iowa

(15:30):
was generally lower, so don't try to compare plans from
different states, because that's not going to work. Iowa was
pricings different than Illinois. It's also going to be very
different between Minnesota, Missouri, and Wisconsin. Let's talk about Part
D drug plan. You can get a standalone drug plan

(15:52):
paired with a Medicare supplement plan, or you can have
Part D benefits embedded inside a Medicare advantage and also
called an MapD plan. Part D plans are based on
your current medication usage. When you call my office, we'll
ask you for your current list of medications, including dosages, mgs, etc.

(16:18):
We also want to know where you like to purchase
your medications CVS, Highve, Walgreens, or if you use a
mail order system. Different companies if teamed up with different
pharmacy networks. ATNA is teamed up with CVS, United Healthcare
is teamed up with Walgreens. Hive is very popular locally,

(16:38):
but that won't help you if you're traveling in Arizona,
Texas or Florida. Every drug plan has their own mail
order system available. I just need a preference on pharmacies
to guide me and making a recommendation. You can go
to any pharmacy location you want, but understand that preferred
pricing on medications is a lower cost to you than

(17:02):
standard pricing. Each network has a preferred and standard pricing list.
Mail order is great for those maintenance medications that we
take routinely, or if you don't want to go out
in the snow to go to the local pharmacy. Also
remember that a lot of mail order pricing offers zero

(17:23):
dollar copey on ninety to one hundred day mail order
on generic tiers one in two medications. The drug plan
that we choose is based on your current medication list.
It doesn't matter if you go to a standalone drug
plan or a drug plan inside of a Medicare advantage plan.

(17:44):
Each drug plan has its own list of medications that
each plan will cover. Now, every plan must carry one
drug and every drug treatment category, but the pricing is
different across all the plans, and some of the plans
can choose to offer more than one drug treatment in

(18:04):
that category, so your overall annual pricing on one plan
can be very different on a different drug plan. You
should reassess your drug plan every year because the costs
and coverages do change. Just a brief example for twenty
twenty six, some prescription drug plans are saying they won't

(18:28):
have a mail order option in twenty twenty six, so
keep that in mind. Also, remember you must have a
drug plan when you go on to Medicare, even if
you don't take any medication. Now, Value Script has a
drug plan this year that's zero dollars monthly premium, and
it's got a very competitive formulary list. That same plan

(18:52):
is going to go to nine dollars and fifty cents
a month in twenty twenty six. You just need to
enroll for that plan. Okay. If you don't want to
supplement in a Sandalone drug plan, then you can choose
to get a parts Medicare Advantage plan, sometimes called ANMAPDMAPD

(19:13):
stands for Medicare Advantage Plan, which includes drug coverage. All
plans have a monthly plan premium, copays, a moop max
out of pocket maximum, some have deductibles, and some can
either have a drug plan included or not have a
drug plan. Excuse me. MapD plans also offer several fringe

(19:40):
benefits like silver sneakers, are renew active basic coverage for eyes, ears, teeth,
and chiropractic panic buttons. Systems for the homes like Life
Alert or Phillips Lifeline, as well as over the counter
benefits sometimes called Some plans will give you twenty five

(20:03):
to fifty dollars a month to purchase no to excuse
me to purchase non prescription items from a website or
a network store using their card as a reimbursement. Now,
remember Medicare advantage plans are subject to a doctor hospital

(20:23):
network locally. Here it's not a big deal. Most plans
offer Mercy One, Genesis or Unity Point is in network
along with Iowa City, University of Iowa hospitals and clinics.
Some also allow Mayo with no referral, but not all
of them. It just depends on which plan you go on.

(20:45):
Each plan is different. In Scott County there's about forty
plans in twenty twenty six. Across the river there's about
twice that amount at now United Healthcare, Blue Cross, Blue SHIETL, Villinois,
well Mark, just to name a few. I don't represent.
I don't represent all of the ones in this area,
but I do handle the major players here in the

(21:06):
Quad Cities. When using a Medicare advantage plan, you have
a price list or is scheduled to a cap per
calendar year. There's copays for doctor visits, hospital visits, outpatient surgeries,
ambulance rides, et cetera. But each cope goes against your
max out of pocket for the calendar year. Once you

(21:31):
hit the MOOP max out of pocket maximum, the plan
would pick up the rest for the remaining calendar year.
Everything gets counted towards the maximum out of pocket except
your medications. Drugs is a separate calculation. It's not part
of your max out of pocket. However, the cap on

(21:52):
drugs for twenty twenty six will be twenty one dollars.
Once you hit twenty one hundred of drug costs, you
don't pay anything additional In twenty twenty six, ATNA and
Wellmark are looking like they have very strong Medicare advantage
plans for twenty twenty six. If you have United Healthcare now,

(22:15):
you may want to consider changing your plan for twenty
twenty six. It wouldn't hurt to make some comparisons. United
Healthcare is telling the market in twenty twenty six they
don't want to be number one in the Quad city area.
They're telling the market they want to take a step
back to be stronger. In twenty twenty seven. Now, if

(22:36):
you're across the river in Illinois, EDNA and Blue Cross
A Blue Shield of Illinois are looking strong for twenty
twenty six. I don't have all the data absorbed yet,
but I will soon and I can report more to
you then. As they say, change is inevitable, so just
go with it. Later later on this month, I'll talk

(23:01):
a little bit about IRMA, income related Monthly Adjustment amount
that's in an extra income based premium that successful people
have to pay for their Medicare. IRMA will increase your
Part B monthly premium and your Part D premium excess
charge per person, and the calculation FORMAA is two years

(23:27):
in arrears, so if we're talking about twenty twenty six,
it would be based on your twenty twenty four filed
income tax return. In future shows, I'm going to talk
about some of the Medicare advantage plans for twenty twenty six.
I'll also get into some of the supplements that are

(23:49):
pretty popular in both Iowa and Illinois, so stay tuned
for that. If you're on Medicare now, I would just
encourage you to look at the plan you're on. Some
of you guys don't read your mail and understand some
of you are going to get a star letter, and

(24:09):
if you don't make a change by December seventh, you're
not going to have coverage in twenty twenty six. So
keep that in mind. Don't forget. My monthly virtual meetings
regarding Medicare for two different companies every month are kind
of on hold right now. In one meeting, I will
cover the Medicare Supplement plan with a standalone drug plan.

(24:33):
The other meeting, I focus on Medicare advantage plans known
as Medicare Parts C, and I'll cover the benefits of
the Part CE Medicare Advantage platform. Given all the changes,
I don't have future dates for these meetings at this time.
I may have a new company to sponsor a meeting
very soon. I can schedule individual meetings with you at

(24:55):
your request. You can call our office at five six
three three three two two two zero zero for to
set up an individual time for your situation. You're also
welcome to email me at Craig at Craigshillig dot com.
And that's my name, c R a I G at

(25:18):
c R a I G S c h I L
l I G dot com. This is Craig Shillig with
safe money