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Redrick Terry:
It is time now for 4 Your Money. We’re joined by John Nelson with NelsonCorp Wealth Management.
Redrick Terry:
John, good morning.
John Nelson:
Yeah, good morning. Thank you for having me.
Redrick Terry:
Absolutely. Thanks for coming in today. Open enrollment starts in a couple weeks for Medicare. What should people be thinking about ahead of that process?
John Nelson:
Yeah, I think it’s just that open enrollment, literally just two weeks away. October 15th is the start date.
John Nelson:
But just a few changes we’ll highlight on this first slide, the first one being adjustments to premiums. That’s not unlike years in the past, small adjustments there that we’re seeing this year, just like many others.
John Nelson:
These next three are bigger changes that are taking place for Medicare that those should be aware of who this applies to.
John Nelson:
Premiums are now linked to inflation. First time that this is now being introduced. It was not before. This is significant in the sense that people on Medicare 10, 15, 20 years, rather than getting the standard increases with inflation at relatively low levels, this is going to be a big impact and potentially a big saver for people on Medicare.
John Nelson:
The drug plan donut hole, this was that unique, difficult for those that were in it, where you could have a gap where you’re paying a lot of expenses out of pocket. So you would hit certain thresholds, get into the donut hole. That started being phased out in 2010. 2019, Redrick, is the last year that this applies. Then those who this does affect will be very happy to hear that this year is the last year that this is in play.
John Nelson:
And the elimination of Medigap. Those policies, specifically Plans C and F, are being eliminated. The coverages there, good news, can be picked up in other plans, but if you do have one of those policies or plans, you will be affected going into this year.
Redrick Terry:
Yeah, it seems like the premium adjustment is probably the most impactful of the one… What more can you tell us on that?
John Nelson:
Yeah, so the premium adjustments, it’s all based on income, your modified adjusted gross income. Many people are unaware of that.
John Nelson:
This next slide will just show a breakdown of where people end up based on income. Individuals and joint obviously here. Down here obviously applies the high-income earners. But these top-tier levels can hit a lot of people. Things like taking money out of retirement accounts, Social Security decisions, pensions that may be kicking in later, is where people can jump up into those other thresholds and be affected by this, so understanding where your income lies in how these premiums get adjusted is a big deal.
Redrick Terry:
That’s the most important there. All right, John-
John Nelson:
You bet.
Redrick Terry:
… thanks so much for joining us.
John Nelson:
Thank you, Redrick.
Redrick Terry:
Of course. If you missed any of this segment, we will have it available for you on our website. That is ourquadcities.com.
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