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Episode #607 - Navigating Medicare in 2025

Sometimes you just need a jolt.

Roger: Welcome to the show dedicated to helping you not just survive retirement, but to have the confidence, to lean in and really rock it.

Today on the show, we are going to start to explore how to navigate Medicare in 2025. There have been a number of things that are causing the need to reevaluate the kind of plan that you have and to make sure you make thoughtful choices. And to help us with that is my favorite Medicare person, which is Danielle Roberts from Boomer Benefits. She is a big friend of the show and our practice. They are our go to navigator for Medicare, and she's going to talk about some of the recent changes that are coming up, why it's more important than ever to pay attention to what is changing in plans and especially when it comes to Medicare Advantage and some other things, so we're going to have Danielle on the show.

In addition, we're going to answer some of your questions related to healthcare before Medicare after the chat with Danielle. So let's get this party started.

ROCKIN’ RETIREMENT IN THE WILD

Roger: To start, we're going to go with rocking retirement in the wild. This is where we profile stories of someone just like you working to create a great life. So I want to start with the beginning quote. Sometimes you need a jolt. That actually came from a conversation I had with someone, a couple, and the husband was saying “I was riding my bicycle, and I literally got a jolt of electricity from my pacemaker.” I don't know if this was a glitch or what, but it definitely jolted him. But this caused a conversation with him and his wife about, wow, he really can't wait to do the things that you want to do in terms of leaning into life. That conversation happened to coincide with an unexpected opportunity. I guess it was from a friend to take a big trip to Africa. It wasn't in their plan, but they hopped on it, and like, a month later, they were in Africa. They took action. I love that speed is a force because it reminded them that you can't wait to do the things that you want to do and say, yes, you can't wait. Life is not a dress rehearsal, as the Red Hot Chili Peppers say.

Now, this big trip to Africa was an opportunity, and it was totally feasible within their plan of record. So there's some caveats there. We don't want to be, you know, dangerous in some of these decisions that we make. It doesn't have to be a trip to Africa. It could be calling a friend, starting a hobby, hanging out with your family. It doesn't matter what it is. We all need that jolt to remember that we're not going to live forever, whether it's figurative or literal.

JAMIE GROWS HER INTERESTS AND HOBBIES

In this case, our next rocking retirement in the story is from. Who is this from? This is from Jamie. She is very brief.

It says,

“I play mahjong with a group of retired ladies each week. I started a book club.”

I love both of those. We have passions and interests and hobbies and connection, etc. mahjong, Jamie, I am not familiar with it. I mean, I know what the game is, but I've never played it. My wife just started playing with a friend who has a group here in Salida. Lisa has invited her, which is very gracious, to come join her group. Shauna is really into this. She came home and showed me all of the different sequences and everything else, and my head got tired. It looked really complicated.

Then when Shauna went home, she taught my daughter and my daughter's fiancé, and they've started playing mahjong, so I guess I'm going to have to learn this. but bravo for you, Jamie, and bravo for you, random person that went to Africa for leaning into life.

Let's all do the same, eh?

PRACTICAL PLANNING SEGMENT

I was about to talk about how to navigate Medicare in 2025 with Danielle from Boomer Benefits. I have no official affiliation with Boomer Benefits, but I do actually have a daughter that works there now. She's been there for about six months, and she's loving it. It's so great to see her leaning into it, and it's also great to see the structure of Boomer from the inside and very impressed. Emma feels very at home. So I want to give a shout out to all the boomers that work at Boomer Benefits, but with that, let's chat with Danielle and figure out this Medicare for 2025.

Danielle, you are my favorite person in many ways, in some aspects of my life. Let me rephrase, because I have my wife here and my kids, I better be careful there. You make Medicare easy for me, which is a blessing. I appreciate that. What is the state of Medicare right now?

Danielle: Well, first of all, thank you. I appreciate that. We do try to make Medicare easy for you and hopefully millions of Medicare beneficiaries out there as well. There have been some changes happening in the Medicare industry. 3

Let's start with original Medicare itself. You have the same four parts. Medicare, part A, B, C and D, you can add a Medigap plan or you can go the Medicare Advantage route. These things kind of still in existence. But the industry has faced some challenges over the last year. You may know that a couple years ago there was the Inflation Reduction Act, which included some changes to Part D. On the one hand, it is good for folks that have high drug costs, because there's a $2,000 cap now that will go to 2,100 next year. But of course, when you take the patient responsibility down, the premiums tend to go up. The unintended consequences of that Inflation Reduction act are that last year we saw some pretty sizable premium increases in Part D. The government stepped in to do some premium stabilization, which basically means they bought them down for you. and that sort of running for a couple of years, but we anticipate probably some more premium increases this year.

The big thing for everyone to be on the lookout this year is that we've gone from over 20 carriers in the Part D market a few years ago to seven. Then those seven are not rolling out three plans a piece like they used to. We're seeing one and two. So when you have September come around, which we all know is that time when we need to be looking at what's going on really, really important to look at your drug benefits this fall, make sure your plan is still going to be affordable for you next year, and that it covers your important medications, because sometimes when the carriers feel the squeeze, they will make those formularies a little skinnier than they used to be. You want to make sure that you're able to access the medications you need. That would probably be the number one big change that's happened here in the last couple of years.

Roger: So is this a seasonal thing? I remember, like, you know, you and I live in Texas. We had homeowners, insurance companies move out of the state and then move back into the state. The fact that we went from 20 to seven in terms of Medicare Medigap providers, is that a seasonal thing or is this a little unusual?

Danielle: It's unusual. So we have lots of Medigap providers, but it's the Part D providers that have slimmed down.

For example, one of the things that happened last year where some carriers left the Part D market altogether, Mutual of Omaha was an example. They were like, no, thanks, we'll stick with Medigap, and we're not going to muddle in Part D anymore. Among the agent community, there is a concern that those continued headwinds may put further pressure. We may see other carriers that drop out of the Part D market. And if that happens, you will have to see some legislation coming to fix things because original Medicare and Medigap really can't exist unless you have standalone Part D drug plans. But if carriers are not going to offer them or they make them too expensive, you end up with more and more people on Advantage plans. Those are not always the right fit for everyone.

Roger: What's the state of Advantage plans right now?

Danielle: So Medicare Advantage plans, they for a long time have had traditional HMO and PPO markets. Some of the HMOs are point of service, which means for a few things you can go outside the network. The main thing that we've been hearing and seeing from the carriers this year is downsizing of the PPO model. So one of the ways in which they've done this earlier this year for plans that they're not going to continue next year, they actually removed those enrollments from agents platforms so that we don't even see them and enroll people in them anymore.

We noticed as this was happening that it was primarily the plans that are offering the most flexibility with the network. I think what's going to happen over the next few years with Advantage plans is there will be fewer and fewer PPO options. Those options might be more expensive and we're going to see a lot more of the standard HMO model. Now that's not necessarily a huge thing because around 7 in 10 people on Medicare Advantage plans are already in an HMO, but for that third or so that like that network flexibility, we may see that it get completely phased out of the market in the next few years.

Roger: Those that are in a PPO, in an Advantage plan, they're not grandfathered in in anyway?

Danielle: Well, those are annual plans. So they could literally just say we're not renewing that plan next year. We've already heard from United Healthcare that they'll be ending 600,000 Medicare Advantage plans. Humana said somewhere, in the neighborhood of 500,000, those are two of your very big carriers. So it's really important that you look at your annual notice of change this fall because it might say, hey, by the way, this plan's going away. You need to find a completely new plan for next year. They may offer you a plan that they would port you into, or they might just say, go choose a plan on the marketplace, you know, we'll know more in September when those notices start to go out.

Roger: So let's talk about obviously when notices come out for this annual ritual we go through with Medicare. How important is it to actually pay attention to it and not, just keep on keeping on? Pretty important, I figured it was.

Danielle: Yeah. You know, this happens every year. I don't know a way to get the information into everyone's hands but, even in our own client base we send text messages, we send emails, we do webinars. Our Facebook group shouts it from the mountaintops. This is the time you need to be reviewing your plan. Inevitably there are always people that call us the first two weeks in January and they're standing at the pharmacy counter and the medication that used to be covered is no longer covered and they're facing 400, 600, $800 out of pocket and they're in a panic and they have a right to be because they're locked into that plan now for the rest of the year. If it's a standalone part D, and this could be a real problem, you can file an exception with the carrier to see if they'll cover that drug. But it would have been better if you'd noticed that in your packet in September and switched to a plan that already offers that medication. I can't overstate the importance of spending half an hour reviewing that information once a year.

Roger: This year feels more important than, I mean they're all important because you're always on the mountaintop yelling around this time, but this year is a little bit more important because of what you're talking about with the drug plans.

Danielle: Yeah, absolutely.

Roger: I mean I deal with this with ACA right now and I'm going to be honest, I get tired head when I'm getting those notices and I'm trying to navigate. What the heck is changing? What's staying the same? Because it's not written in a consumable format. You mentioned, like drug formularies, but what are the key things that someone should look at when they're getting these doses?

Danielle: Of course you want to make sure your drugs are on the formulary as you mentioned. That's probably the number one thing. But what tier are they in? You know, were they in a tier 2 last year and now they're in a tier 4?

Roger: What does that mean by the way? What is a tier?

Danielle: A drug tier is a class, the classification of a drug that's on the formulary that corresponds to a what kind of co pay you'll pay for it. Usually there's five tiers.

So like a tier one would be your cheapest meds or preferred generics that you pick up at a preferred pharmacy. Then your most expensive ones will be a tier 5. Some of them have a tier 6, and they often put insulins and other diabetes medicines in those. They're all a little bit different. But if a drug goes from a tier two that has a, say, a $10 copay to a tier four that has a 30% copay, then you're going to see this drug that you had and that you're going to actually be spending more for next year than you did this year. You want to look and see did they change with the tiers where everything is falling.

Of course you want to check your premium. What is the premium and then the deductible, because we've also been seeing as these carriers face the headwinds that some plans used to offer a no deductible if you had a more expensive drug plan or maybe a lower deductible. But we're seeing more and more of those plans going to go for the full part D deductible, which next year is projected to be $615. So let's say that this year you've been on a, and you had a $100 drug deductible, but you want to look and see is it going up to $615 next year? If so, you know, is that something you can handle? Or is there another plan out there that you could move to that would be actually better for your pocketbook?

Roger: That's the key is by reviewing these core things, one, you're getting a sense for the levers that the insurance companies are, are pulling to try to maintain whatever level of profitability they're trying to. They're trying to navigate this just as much as anybody. Absolutely. and this is like the observe stage of, let's observe what is changing. Then the next stage, a lot of times is orient. Okay, now that I have identified, this goes from a 2 to a 3. My premium's doing this now you can orient, well, what other options do I have out there? But you can't do that until you observe what the changes are in the first place.

Danielle: Yeah, because you may love your drug plan and then, you know, you get this big doorstopper of a packet in the mail, people throw it on their desk or kitchen table. Who wants to look at a big old insurance packet?

Roger: Well, let's give them some credit. They'll say, I will look at it this weekend, but they just never do.

Danielle: Yes, you're right. It can sit there too long and people forget about it. Then they get a nasty surprise when they realize what's changed in January.

The good thing about those packets is right on the top of the packet there will be a side by side column that says, here's what's changing in your plan. This year your premium was $50. Next year it's going to be $60. This year your deductible is this. So anything that's changing has to be lined up in columns. They do make it pretty easy for you to look at. It's not like you have to dig through the entire packet to find this information. You may need to dig a little to look at those tiers to find out, hey, I take these four medications. What is my coinsurance or co pay going to be for these four medications? Is it going up next year?

Then it never hurts to go to the Medicare Plan Finder and enter your medications in the system and just do a quick check because maybe nothing's changing on your drug plan and you like it, but there's actually a plan out there that would save you $200 a year and you just never checked. It's good to review it if you have the wherewithal to, spend a few minutes navigating that Medicare.gov plan finder. It's gotten better over the years so it's not as difficult to use that as it used to be.

Roger: AI is a whole other game changer if you threw it in there, I guess. But yeah, I'll liken this is that you make a good point of I like my plan. Not much change. But every insurance company is different. They have their own portfolio of people that they're serving, right. I'll go back to the Texas homeowners insurance. I remember when Allstate moved out because of mold way back in the day and this is aging me. Other companies that didn't have that issue because they weren't there, their portfolio is different. They actually wanted people in Texas so they priced it accordingly. Just like a bank would offer a CD at different rates. So it's always important to say there might be somebody that is on the prowl for more people like me in their plan, whereas others don't want any more of us.

Danielle: Yes, absolutely.

Roger: Okay.

Danielle: Sometimes carriers also will spend a year losing money on a drug plan just to get you on their client list so that they can telemarket you to switch into their Advantage plan. We definitely saw at least one carrier really play that card last year. If you didn't make the switch to an Advantage plan while they telemarketed you relentlessly all year, they might have big premium increase next year or big change to their plan because they were playing that card for one year, but they can't sustain that over multiple years. There are so many moving parts that just require you to take a look at it and make sure that you thoroughly understand what you're buying.

Roger: It was a teaser rate.

Danielle: It was a teaser, yeah, absolutely. Yep. Medigap companies do this too, so probably all insurance companies do.

Roger: Right.

Danielle: We see this with our auto insurance premiums too. They're lower the first year and then the next year, like, wow, what happened here? These are all, all types of insurance that need to be reviewed.

Roger: Let's talk. I know we've done this in the past, but let's talk for a moment about Medicare Advantage.

Danielle: Okay.

Roger: You've mentioned this is one that is marketed very heavily. If you see a commercial on tv, it's about Medicare Advantage. Now the marketing pressures, because the incentives are much higher, I assume for the company, they're going to make more money if you're in an advantage. So that's actually negative because it can lead to, you know, moral risk in terms of how things are marketed. But Medicare Advantage as it is, what are the advantages of it? Because it still doesn't mean the product's bad necessarily.

Danielle: Yeah. You do run into a lot of that. This is funny. In our Boomer Benefits, our Facebook group with our Medicare beneficiaries, people will ask this question and man, there are some strong opinions that people have out there and they'll get into arguments. Sometimes we have to shut down the comments because they have such a strong opinion about Medicare Advantage or original Medicare. But the reality is we want to have choices in our healthcare.

Medicare Advantage plans were created in the Balanced Budget act in 1997 to give you an alternative to original Medicare, because what was happening is if people couldn't afford a Medigap plan, sometimes they just went with original Medicare. Now they have an open heart surgery and they owe 20% of a hundred thousand dollar bill. This was happening. So we needed to find a way to make some of the insurance plans a little more affordable for people. That is how Medicare Advantage was created.

Now Advantage plans, the tradeoff is you're going to use a network and there's going to be some restrictions in that network, right? So in an HMO model, you're going to choose a primary care provider, get a referral to see a specialist. PPO models are going to have a little more flexibility, but those are kind of slowly being phased out of the marketplace and I think we will see them completely gone within a couple of years. The advantage of the Advantage plan is going to be your tradeoff for using a network is usually a very low premium. A lot of them will have what's called a zero premium, meaning you don't pay anything more for the plan than what you're already paying for part B. You still have to have Medicare A and B to be in the plan.

The other advantage would be that 97% of Advantage plans have that built in part D drug plan. So you're not picking up a separate premium for that drug plan either. When you have somebody that's retiring, getting ready to live on a fixed income, these plans can be really attractive. Especially because in all of the slick advertisements and the TV commercials and the postcards, the mailers, the flyers, the pamphlets, you'll hear about all these extras that they throw in. There might be dental vision and hearing benefits. There might be a gym membership. Some of them will have a flex card that you can spend on groceries. The marketing of that has gotten really out of control over the last few years. Medicare actually cracked down on that last year. Now those commercials have to be reviewed by CMS before they can be advertised. We are seeing a lot less of the really predatory ones, but that doesn't mean that you just quickly enroll because the TV commercial told you how great this plan is. There are some things you need to carefully consider. Is your doctor in the network? Are drugs on the formulary and what are my costs going to be in this plan? So you have to weigh that against a Medigap plan, which would be more expensive, but of course on the back end it has more comprehensive coverage.

Roger: Then the aggressive marketing from a commercial standpoint is just simply the, the COVID charge. You mentioned the telemarketing efforts, which I'm assuming would be the same because the incentives of the people calling are probably much more aligned to making a sale on it. yeah, so that could be especially.

Danielle: The big offshore call centers have been in this market for a long time and their incentive is to get you on the phone and enroll you into a plan within 30 minutes and then get you off the phone and never speak to you again. Right. And that is definitely not a good way to choose an advantage plan. There are some things that seem like some pressure on advantage plans to be less predatory and to actually spend less money. There are some heated opinions in Congress about how much Medicare Advantage plans profit, and we see this from year to year. But the reality is they are an insurance company and they're in business to make a profit. So let's carefully look at this plan they're offering.

Is it best for them or is it best for me and does it fit my needs and my budget?

Roger: What are some avatars of whom it might be most appropriate for?

Danielle: Yeah.

You'll see all walks of life in these plans, but we see a lot of times that super healthy people will choose them because maybe you don't take any medications and you haven't been to the doctor in 15 years, you're super healthy, good for you. If you look at a Medigap plan and that plan is $200 a month and in a guaranteed rate increase every year, 15 to 20%, and you think to yourself, why would I want to spend that when I rarely even use those benefits? We see a lot of those people being attracted to the plan.

Then of course there are a lot of, I think middle class folks that are looking at all of the expenses ahead of them in retirement, trying to allocate for long term care and estate planning and, and everything else, and they may also say, why would I want to spend this money and get this better plan when I have this plan that's a zero premium and it does have an out of pocket maximum cap. So am I willing for that little bit of risk of spending to save on the premium? The answer is a lot of people will say yes, that is really important to them.

Then also you can have people that are truly chronically ill and those folks will be attracted to plans that are designed for the chronically ill, so there's Medicare Advantage chronically ill plans, for example. There might be a plan that is designed for people with diabetes and it will have lots of benefits in it that are designed to make medical services better and more affordable for that particular condition. There can be a wide range of people.

What I often don't see is if you have a fairly high income individual and they have money to spend, lots of them will opt for that Medigap plan and they won't risk the Advantage plan. But it's not a one size fits all. So there's several different groups that might find them a good fit.

Roger: Okay, I had a question. It just popped out of my head. I hate it when that happens.

Danielle: It happens to me all the time these days.

Roger: I don't know if that's a sign of 58 or what, so this year is extremely important. One thing I actually get on the mountaintop about is services like yours because in traditional Medicare, using Boomer Benefits to review your benefits and look at all the different policies out there doesn't cost. It's baked into the cost of Medicare. You guys have your pulse on this. So I'm going to say it right now. If you're navigating this, talk to Boomer Benefits, except if you're in New York and what other state I guess it is.

Danielle: Yeah, just New York.

Roger: Oh, just New York now. Okay. I have no financial skin in this game.

One question I do want to ask you that I was just thinking of as we were talking, because you guys sell Advantage plans when they're appropriate. You are one of the founders of Boomer Benefits. How do you manage those incentives between traditional Medic Advantage in your team?

Danielle: Yeah, that's such a great question. From our perspective, whether someone enrolls in Medigap or Medicare Advantage over the long term, the life cycle of that client and the profit, it tends to even out. With a Medicare Advantage plan, certainly you enroll someone, you're going to get that first year enrollment, It's a little bit higher than what you're going to make on a Medigap plan that year. But if you had a client that was on both of them over the long term, say a Medigap plan, and a Medicare Advantage plan for five years, the end result of commissions that a broker earns is pretty similar for your long term client.

One of the things that we've done at Boomer Benefits is my team that works with Medicare beneficiaries, when they enroll someone into a plan, they get paid exactly the same commission, whether they choose an Advantage plan for that client or a Medigap plan. That sort of takes the bias out of the discussion and it's a way that we can keep our team honest in recommending plans that truly fit that particular client.

Roger: The last thing I want to ask you about, because I think this is critical, is you talked about the support after the contract. Talk about the protocols. If you're dealing with Medicare and use Boomer Benefits, what is the service level of the proactiveness so the lazy people like me can be reminded to address these things?

Danielle: Yeah, sure.

So, there's all sorts of agencies that you could go with and any agent out there can enroll you, somebody in a Medigap plan or a Medicare Advantage plan. But what really, really matters is the support that you get after you enroll.

There are all sorts of hiccups with Medicare. I've written a whole book about it. You may run into these things and you might not know how to solve something. So for example, maybe you were coming off employer insurance and now you're on Medicare and nobody reminded the Medicare that you're switching from secondary to primary. So you have all these bills that get denied and people don't know how to deal with that. This is when you want to have someone that you can call and say, what just happened? Like, I've never been on Medicare before. Why would they have denied all these bills? Then you have a service team that helps you go and resolve that. There are also drug exceptions, late penalty appeals, all sorts of things that you need to have that support on.

We also do lots of reminders. So we send a text message out several times every year to remind people of the annual notice. We send emails out to our clients. We do free webinars. I'll have a ton of them that I'm offering in September and October. All about different topics, like, are you curious about Medicare Advantage? Come to this webinar and hear and learn whether that's something you want to change into. We do one that's an annual update. What are the changes for 2026 that you need to be aware of? If you have a really good broker that supports you that way, you're going to be a lot less likely to miss something important and then find yourself standing at the pharmacy with a $400 bill in January because you didn't know that your plan dropped a medication. That's the kind of support that you really want to have after the fact.

I'll give you a story just to give you an example as well. The claims team we've invested so heavily in at Boomer Benefits, we just had a client who, before they came to us, was on COBRA, always had primary insurance. In the one month that he was turning 65 and COBRA became secondary to Medicare, which he didn't know, he had an injury that needed an emergency surgery for his shoulder. Of course, he did this. It was so unexpected that he didn't enroll in Medicare until July 1st, and that means your benefits don't start till August 1st. He had that surgery at the end of July. He's now facing a $40,000 bill because he literally couldn't have timed it worse. The one month in his whole life where he didn't have primary coverage.

Well, that has nothing to do with Boomer Benefits. It happened in his transition from COBRA to Medicare. But my team went to work on it. We did everything we could. We applied to have that Social Security to have that Medicare part B effective date backdated. I reached out to a congressman in his district and sent over what had happened and had the congressman inquire to Social Security, hey, could you backdate this client by one day? This is what happened. Nobody should be stuck with a $40,000 bill. Then, because I have such an awesome claims team who writes appeals all the time, my claims manager helped him file an appeal with his group health carrier, who was paying secondary and explaining why we really thought that they should pay primary. We found out yesterday that that was favorable, and they switched to primary. We got to call this gentleman and tell him everything is fully covered. You don't owe $40,000. That is really a good person to have on your side when anything goes wrong with Medicare. That's the extent that we take things to at Boomer Benefits, we will try to make the impossible possible, before we go to extreme lengths, before we give up on a problem like that that may occur surrounding Medicare.

Roger: Nothing else to be said. We will have links in The Noodle email this weekend with how to access some of the educational materials and the webinars that are coming up. Danielle, thank you so much for your spirit and how you do what you guys do.

Danielle: It's always my pleasure. Thanks, Roger, for having me.

LISTENER QUESTIONS

Roger: Just for kicks, let's answer a few questions on health care before Medicare. If you have a question for the show, you can go to askroger.me and you can type in your question, you can leave an audio question if you. We love audio questions.

You can also leave how you're rocking retirement. Anything you want to tell us? That's a great place to do it at askroger.me.

All right, with that said, let's get to the first question.

TERRI ASKS FOR REPUTABLE SOURCES TO BUY HEALTH INSURANCE FROM AFTER RETIREMENT

Our first question comes from Terri.

“Good morning, Roger.

I love your podcast. I've been listening for several years now and have gained so much valuable information.”

That's awesome, Terri.

“My husband and I are retiring from full time work at age 60. But that leaves us with a dilemma of where to get health insurance after COBRA. Can you suggest some reputable sources or was there a podcast in the past where you covered this?”

Well, we haven't covered it in detail for a little bit, but Terri, if you go to episodes 2011 to 2014, we did a whole month on health care before Medicare. and that might give you some helpful hints and we'll have links to those in The Noodle.

By the way, health care before Medicare is a little bit tricky because unlike Medicare where they have navigators like a Boomer benefits, the compensation for Boomer Benefits is baked into the program. You don't pay out of pocket to use a navigator like Boomer Benefits when it comes to Medicare. That system works really well whether you use them or not.

In the ACA Affordable Care act, there are some people that help you navigate that. But honestly, there's not a lot of financial incentive for people to do that. This may be a glitch in the plan that could be fixed to help incentivize someone to be a navigator to help you find that.

Let's list through some of the options that you have before age 65. Obviously you have COBRA as you mentioned, although its time is limited, and the advantages of COBRA is that it's simple because it's the continuation of your coverage for a period of time so you don't have any disruption with doctors or coverage and all of those other things. But it's limited and in certain cases it can be expensive.

A part time job with health insurance benefits can be an option. ACA plans or plans on the Affordable Care act exchange. Every state either has their own exchange or they are part of the national exchange. Then there are some non ACA private plans with less coverage and low costs, but those plans don't have to cover all the ACA mandated 10 essential health benefits and they don't have to cover preexisting conditions. That's one of the big benefits of going on an ACA plan is you don't have to worry about preexisting conditions.

Then separately, a little bit more nontraditional are the health care sharing ministries that I know a number of people that have used them successfully and have had great experiences, but they're not technically insurance. In fact, early on when my wife retired, because I'm self-employed, we experimented and went on a healthcare ministry type of plan to try to save cost. When my wife ended up getting diagnosed with psoriatic arthritis and was prescribed a medication at the time, I think it's Humira, which is a biologic drug. In the ministry healthcare scheme, at least at the time, they didn't cover prescriptions, and the biologics can cost four or five thousand dollars per month and you have to do it once a month. We ended up having to pivot and luckily this all occurred right before ACA open enrollment, otherwise we would have really been out of pocket for a lot of money. I would be careful with those when it comes to feasibility.

As you're thinking about this, Terry, if you can afford good insurance because your plan is highly feasible or even overfunded, it's worth spending the extra money to have high quality insurance pay the premium because it's not overly onerous on your plan, just so you have great coverage. But you can check those out.

Unfortunately, I don't have a specific company to recommend to you.

BETH HAS A QUESTION ABOUT THE ACA AND PUTTING CONTRIBUTIONS INTO AN HSA WITHOUT AN EMPLOYER DEDUCTION

Our last question comes from Beth, related to the health savings account at ACA in light of the big, beautiful, bill,

Beth says

“I am 61 and rocking retirement for three years now.”

Huzzah.

“I've been purchasing the health insurance through the ACA without credit since my COBRA expired. When I was employed, I had a high deductible health insurance plan and a health savings account. The health savings account contributions were just taken out of my paycheck and deposited into the HSA.

Now, as part of the big, beautiful bill, the Affordable Care act bronze plans will be HSA eligible in 2026. So the central question is how I make contributions next year because I'll be HSA eligible again. So how do you get contributions into a health savings account if you've not done this before because the employer did it?”

Well, the good news, Beth, is there's really not a lot of new layers of complexity introduced in the final bill.

As you noted, ACA plans that are bronze plans will be health savings account eligible. So how do you contribute to these now that you don't have an employer deduction? Well, contributing to one is actually relatively easy. You can use earned income, unearned income, etc. Much easier than an IRA. If you're eligible, you can take after tax money from any source and contribute up to your maximum limit for 20, 25 or 26 or whatever the year is.

Don't forget that if you're over 55, which you are, you're eligible for a catch up provision. Now, you asked about taking money from a traditional IRA to fund your health savings account. If you're interested in that, that's allowed once per lifetime and it needs to be done more than 12 months before enrolling in Medicare because Medicare interacts a little oddly with HSAs. You can do that once in a lifetime through a direct IRA to HSA rollover. You'd want to check with your provider, probably the HSA holder here, to ask if they have a form for this to draw from a traditional IRA, whether that's from that it's held at the same place or from another place, and you can contribute the maximum amount for the year, including all catch ups.

These aren't done too frequently because they're relatively new, so there may not be an online form. So I suggest calling first your HSA provider, letting them know what you want to do, and then they can guide you through that process. A couple things to remember here are that you must have an HSA eligible plan and you must stay in that plan for the entire year if you're going to make that max contribution.

All right, with that, let's get to a smart sprint.

TODAY’S SMART SPRINT SEGMENT

On your marks, get set,

All right, in the next seven days, whether you are navigating Medicare or navigating health care before Medicare via the HCA, get a copy of your plan and get ready and then put a date on your calendar for early October to begin examining your healthcare options, whether that's through Medicare or through the Affordable Care Act. It's important to review these things every single year.

Honestly, I didn't do this last year and I had the opportunity to go from two individual plans to a joint plan with my wife. We just didn't do it because I was too busy and I didn't do it, I didn't schedule it. So get your plan together and put a date on your calendar for October to review your healthcare coverage to make sure you have what's right for you.

I've been in here in Colorado for about three weeks by myself now, and I've been listening to audiobooks as I'm cleaning the house or doing laundry or what have you. I've been listening to these Vince Flynn, Mitch Rapp, go get all the terrorist type of books. You know, just sort of spy espionage mind candy, which is like, okay, that's sort of extreme, but it passes the time. Then the other day I was on, what, watching a little bit of TV and just sort of flipping channels and I happened upon Singing in the Rain with Gene Kelly and Debbie Reynolds and the other gentleman, O' Connor I think is his last name. He's awesome, by the way. So I got, sort of towards the beginning of is a wonderful movie. It is just happy, it's funny, it's lighthearted, there's just nothing too serious. the dancing is amazing, the singing is awesome, but it's not too much to where you just go overblown with music. It was just an awesome movie.

I was reflecting the other day, I love that I can read these crazy assassin spy books and then watch Singing in the Rain and just get a kick out of it. I think we should have varied interests and I just thought that it was funny. I don't know.

Hope you're having a great day. Hope you got some education from here and we'll chat next week.

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