Ken Moraif  

Hello everyone, and welcome back to the retirement planners of America podcast where we try to have more fun than a human being should be allowed to have when talking about all this financial stuff. And in this episode, we have a very, very exciting and fun topic to talk about, which is that insurance and Medicare premiums are going up in 2026 significantly, like a ton. So we’re going to talk about what’s causing that, but more importantly, we’re going to talk about what to do about it, how to mitigate that, if you can, and to help us to do that. And I’m going to bring in our resident expert, Lynn. Tim. Hi, Lynn, it’s good to have you. Great to be here. Yeah. So are you having more fun than a human being should be allowed to have? This is the third podcast you’ve done with me. I love

Lynn Timm  

our clients and I love being here with you. It’s, I’m it’s amazing. I can’t believe I’m here with you. I was listening to you 20 years ago on the radio. Wow.

Ken Moraif  

Well, I’m very flattered. You know, I have a question for you. You know, you mentioned in our previous podcast that your mother was essentially a victim of Medicare. I’ll call it fraud. Was that what prompted you to go into this business? Did that? Was that part of

Lynn Timm  

the Well, I went into this business about the time of the Affordable Care Act passing, and there was just a need for insurance agents to help people with Medicare. So initially I focused completely on Medicare. Now I do everything, but there was a shortage of people that could help people transition to Medicare, could understand their choices. Lots of you know, insurance agents out there doing life insurance, which was what I used to do,

Ken Moraif  

but it I would say there’s a shortage today.

Lynn Timm  

Still, I think there is still a shortage, and probably it’s getting bigger as the population is aging, and we’re getting more people aging into Medicare. It’s like 10 to 12,000 a day. So it’s a significant amount of people that need help.

Ken Moraif  

Yeah, you know me getting into the financial services, the advisory business that was prompted because of my mother as well. Oh, really, yeah. So she experienced 1973 74 which was a terrible bear market, and so and I was, I was a young man, a young boy. I was a boy at the time, and it, it scared her to death. It imprinted me. And years later, when I started in this business, it’s because of my mother, all the stuff that we do. So, yeah, so if you see your mom experience bad things, it motivates you to I don’t want anybody else to experience that. Protect our moms. We have to protect our moms. That’s right. So let’s talk about so why are insurance, Medicare, going up in 2026 I mean, the news is all about, they’re going up like significantly. It’s a lot. And right now, the Congress is all arguing with each other about how to address this, and you know, all the stuff that’s going on.

Lynn Timm  

Yeah, it’s, it’s, it’s significant. My phone is ringing off the hook with people that are trying to to plan their costs for next year that have just gotten their premium renewals. I mean, most, most of the deadlines have since passed, but there are people that are struggling with, how am I going to pay my insurance next year? Because for, I mean, the big thing is, you know, the expanded tax credits ended this year,

Ken Moraif  

and these, these were the when covid came along, they added additional layers of what subsidies, I’ll call it Yes, and now those the extra layer because of covid is coming off, correct? And so that’s a big part

Lynn Timm  

of a big part of the cost. And so mostly that helped people that were middle income, they could afford their plans, so they would make a decent living, and they would be able to get an advanced premium tax credit that could make it affordable. So now, by losing that, their premiums can double next year. And so for a family of four that was paying maybe 1500 a month, they’re paying 3500 to 4000 Wow, and it’s they can’t afford their insurance, so it’s really hurting people that are more middle income to find affordable insurance.

Ken Moraif  

Okay, so and so let’s talk about, then the Medicare in particular, okay? And then we also, I also want to talk with you about, we’ll call it Obamacare, the Affordable Care Act. And you know, for most of our clients, they’re not on Obamacare, but there are circumstances where being part of the exchange and all that makes sense for our clients, right? And when would that happen? And how do they navigate that?

Lynn Timm  

Yes, so a lot of our clients are retiring early due to great financial planning, of course, and and so maybe one spouse is aging into Medicare and then the other spouse is under 65 if that spouse is coming off a group health plan and. They have any health issues or pre existing conditions, then they really have to go to the marketplace or stay on COBRA. So both are very expensive, so that can add to the cost. So, you know, they come off a group plan, then all of a sudden they have to spend 1000 to 1500 a month to get their spouse covered. So it’s making it difficult for people to, you know, plan to retire early when they’ve got an extra house payment sometimes to consider in their monthly cost.

Ken Moraif  

So why would somebody choose Cobra over the Affordable Care or vice versa?

Lynn Timm  

So, you know, we have to run the numbers to see what makes sense. But usually, if a client is undergoing maybe a cancer treatment, or has significant pre existing conditions, then it might make sense, or maybe they’ve hit their max out of pocket for the year, and then it doesn’t make sense to move over to, you know, the Affordable Care Act plan. So you have to answer medical questions. So there are, there are plans that you can do that maybe are more affordable, but sometimes there’s pre existing condition limitations, or you can’t get the plan because you have to answer medical questions, I

Ken Moraif  

see, and so does, if somebody is on COBRA. Does the Affordable Care Act if they’re on the exchange Obamacare? Does that bridge last longer than than the COBRA does? Because Cobra expires after 18 months, right? Correct?

Lynn Timm  

And then there’s certain situations where it can go for 36 months. But let’s say they stay on cover for 18 months, then they can go on the exchange and they can get a plan to cover them till they age into Medicare. So they’ll have a special enrollment window to select a plan with no medical questions, obviously.

Ken Moraif  

So if I, if I’ve been on COBRA for 18 months, and now I start on on the four, on the on the exchange, right? How long can I extend it?

Lynn Timm  

You can stay on that till age 65 oh, okay, so

Ken Moraif  

even if I’m 50, right, I see, so it goes all the way until Medicare kicks in, exactly, I see. So this could be, this is a bridge for a lot of people beyond Cobra

Lynn Timm  

exactly, and it’s a bridge for people that have mainly pre existing conditions.

Ken Moraif  

And you know, for those, let’s define our terms. Can you tell us what Cobra means? You don’t have to tell us what the acronym is. But what is it?

Lynn Timm  

What does Cobra is an extension of your group health insurance. So when, when you, let’s say you retire and your Cobra starts, you know your employer has to pay 50% of the cost of your health insurance at least. So when you go on COBRA, you pay 100% so for people getting their Cobra bill, it might double what they’re used to seeing come out of their paycheck. So it can be a shock. And you know, all of a sudden, instead of 500 a month coming out, they’ve got to spend 1000 to stay on COBRA.

Ken Moraif  

So Cobra was basically developed so that when people retired from work, they still could keep their coverage for 18 months after they’ve left employment. But because we don’t know you anymore, your health could have changed your higher risk. We’re going to, we’re not that your company’s not going to pay for it, right, but you can, you can keep it, but you have to do the math and see, like you said, right, which is the best way to go, right? And that requires planning and all that, which is what we do, right? We help people to decide that. Okay, so let’s talk about, then Medicare, and the parts of Medicare, and how those premiums are going to go up, and if there’s anything we can do about that.

Lynn Timm  

Okay, so of course, you’re going to have your Part B premium to Medicare that comes out of Social Security or your billed for that, and that goes up every year. And so the government tells you what that’s going to be every year, and it creeps up. And for high income individuals, it can be significant. And then you’ve got your well

Ken Moraif  

before you leave, that is there anything you can do about that? Is there any way to reduce the cost of Part B, if

Lynn Timm  

you get Irma, which is income related monthly assessment amount that’s for high income individuals and you fall within certain tax brackets, they have a two year look back. So for people that are retiring that maybe two years ago, they made more than they’re going to make moving forward. Once they enter Medicare, they can appeal that. And there’s a form online. It’s the SSA dash 44 where they can show documentation that I won’t be earning this income moving forward. They can get that adjusted. Yeah.

Ken Moraif  

So that’s a very important point, because let’s say, for example, that you sell something, right, and you show a larger amount of income in that year that you sold a house, you know, or some or your stocks you decided to sell. So in that one year, it shows that so in the following year, earn. Kicks in, you know, and says, Okay, well, we’re going to assume you’re going to make that amount for the rest of your life, and so we’re going to charge you. And everybody freaks out, but it’s only for one year, right? And then it reassesses, right? The following, but

Lynn Timm  

it will reassess every year based on two years ago you were exactly.

Ken Moraif  

So you can go back and and say, No, guys, this was not the rest of my life. This is just as one event, and therefore we can appeal it and get them to reduce that exactly.

Lynn Timm  

And most, most of our clients are successful with those appeals with the proper documentation. You know, when you retire, your income goes down often. So you know, you just show that you’re retiring and you’re not having that income coming in, or whatever it is, and that’s usually successful.

Ken Moraif  

Okay, that’s a great tip. Okay, so let’s talk about after B, there’s what,

Lynn Timm  

then you have a supplement. So you need a supplement to pick up what? Medicare Part A and B doesn’t cover those are deductibles, coinsurance, co pays, and you have no max out of pocket. So it’s really important that you mitigate that risk by either doing a Medicare supplement or Medicare Advantage plan. The Medicare Supplements are getting very expensive, so we’ve seen probably 25 to 50% rate increases in Texas for people that are turning 65 and it’s, you know, I’ve been doing this 12 years, and I’ve never seen rate increases like this. Some companies 25% and so forth. So the, you know, people are thinking, Well, what’s it going to be in 20 years? And so there’s, right now, there’s about 55% of the population that are in Advantage plans, and and then I think it’s 30 or 40% that are in Medicare Supplement, and then the rest maybe have nothing. So we’re seeing an increase in people that are doing Medicare Advantage plans, because those are zero premium and so as people’s Medicare Supplements get more expensive, there might have to move to Advantage plans, because they get priced out of the Medicare

Ken Moraif  

so I guess one strategy, if you can’t afford the increase on the Advantage plans is to move into a plan that has a zero cost. Yes, but then what happens? Then what are you giving up by doing that?

Lynn Timm  

Well, those plans do protect you with a max out of pocket, but your costs can be higher, because when you have a Medicare supplement like a Plan G your your costs are very low. You just have one little deductible each year to meet, and then you’re done. So you know exactly what your costs are going to be in a catastrophic situation. With a Medicare Advantage plan, you’re probably likely to hit your max out of pocket in a catastrophic situation, that can be 10 to $12,000 so on the years when something like that happens, then people might not be as financially

Ken Moraif  

prepared. So how does one go about deciding,

Lynn Timm  

well, it’s a very unique decision to you and your situation. So we look at budget, we look at health. You know, you can’t always listen to what’s good for your neighbor or your sometimes even your relative, your co workers, because that might not be the best thing for you. Everybody’s different. Everybody’s different, and Medicare looks at you as an individual. You’re not priced with your spouse. It’s just you, and it’s based on, you know, what’s good

Ken Moraif  

for you. And these decisions are made during the enrollment period, right

Lynn Timm  

during the enrollment period, or when you turn 65

Ken Moraif  

okay, so when you turn 65 that’s your first time. So you’re making that decision at that point. And this decision, when you turn 65 which way you go, could impact the cost significantly, yes. And then after you’ve done it that first time, then each year during the enrollment period, you’re going to look at it again and decide which way you want to go, right, and if the premium so what you said, If I understood you correctly, is that the premium is lower, but the cost could be higher. I didn’t understand the

Lynn Timm  

well, the premiums with a Medicare Supplement are going to go up. So they start off relatively affordable, and then they creep up over time. So a Medicare Advantage plan in general has zero premium. So on a year that you’re healthy, you’re saving that money that you would have spent on the Medicare Supplement, but on a year that you’re not healthy, then you might hit that max out of pocket. So you’re going to need to have some money available in reserve to meet those costs if something expensive happens when you’re on an advantage plan. So you’re telling me, Lynn, there’s no free lunch. There is no free lunch. And I’ve had to tell people Medicare is not free. People think it’s free,

Ken Moraif  

but it is not. Even the ones that have no premium are not free. Yes.

Lynn Timm  

And you know, we have to help people plan for those costs in retirement. And yes, you know, your planners do a great job

Ken Moraif  

of that, yeah. And you know, one of the things that we do with with clients and prospective clients, is we build what we call. All a retirement cash flow plan. And basically, we want to look at, you know, projecting what is going to be the cost of our insurance, you know, our Medicare, etc, and we build that into our cost of living. And the most important thing in all of the things that we do is, how do we support the cost of living that you want? Right? So you’re going to retire, you’re building towards that, or maybe you’re there already. And how do you support that lifestyle that you want? And a very important component of that is the cost of insurance. It has to be, right? What? So is there you mentioned also about Medicare, Part D. So let’s talk about Part D. What’s going on with that

Lynn Timm  

one that’s been in the news a lot because of some changes that stem from the inflation Reduction Act that affected part D costs, which are your prescription drugs. So prior to last year, the max out of pocket on a prescription drug plan was 8000 and then prior to that, there was no max out of pocket. So this in 2026 it’s 2026 it’s 2100 so Wow, huge amount. The insurance carriers have had to absorb a lot of the cost of these expensive medications. And as we know, the administration is negotiating prices. This is the first time Medicare has been able to negotiate drug prices. So that that has is helping bring those costs down, but the insurance companies are still having to cover more of the cost, so we’ve seen a huge increase in the cost of Part D plans. But then there’s some carriers that are offering zero premium plans, so there’s plans for zero and then there’s plans for 70 to $125 a month. It’s crazy.

Ken Moraif  

Well, if I’m, if I’m looking at zero and $70 a month,

Lynn Timm  

well, it depends on your medications, so your medication, I’m going with the zero. Lynn, well, most people are going with the zero,

Ken Moraif  

but there’s got, there’s got to be a catch here. Why is this 70? That’s zero?

Lynn Timm  

Well, you know, the government subsidizes these carriers on these plans, so it’s very complex, but you know, we’re seeing a huge amount of people move to the zero premium plans, and there’s less carriers offering plans, so not as much competition. And the people that might go with $100 plus a month plan might have a specific high cost medication that’s not

Ken Moraif  

on the zero plan, exactly. So the reason why you go with the more expensive ones is because the medication that you need is not on the zero plan. That’s the thing.

Lynn Timm  

And people have to use medicare.gov now, because most of these plans aren’t working with agents. And so, you know, we’re asking them to look at their medicare.gov because some of the plans for us aren’t showing up. So we’re not even able to enroll in everything that’s out there anymore. On Part D,

Ken Moraif  

you know that is super important, so let’s, let’s say that again. Tell us that again. I want to repeat that in case somebody we didn’t realize the importance of it. Say that again.

Lynn Timm  

So with Part D plans. An agent like me cannot enroll people in all the plans anymore. So some of the plans are being suppressed by the carriers because they don’t want people to enroll in them. And there’s very complicated but so now, so if

Ken Moraif  

you’re talking to an agent, you’re basically only seeing part of the universe that you could sign up for Part D because they can’t see the other parts, because it’s being suppressed, right?

Lynn Timm  

Okay? And we can’t really be the agent on their policy, because we can’t enroll them in a plan. So for moving forward, unless something changes, people need to check their Part D plans in their medicare.gov accounts, and it’s very easy, so I’ve been helping people understand how to do that, where they can just go into their account, log in, shows their medication, shows the plans. You just click Enroll. It’s very easy.

Ken Moraif  

So when it comes to part D, the big tip is go to medicare.gov, in your specific account, in your specific account, and with all due respect to people who are in the insurance business, don’t talk to them because they had, don’t have access to the other stuff. They have incomplete information, right? Okay, that’s very important. You said also in our when we were talking earlier about Part F, what’s part F, and what happened to Part F Plan F

Lynn Timm  

is, is a Medicare supplement plan that was sunset by Medicare January one of 2020, so plan F covered all the deductibles

Ken Moraif  

also pays. Why do we care about it?

Lynn Timm  

Well, because they closed off enrollment in Plan F,

Ken Moraif  

it’s so people who are in it could continue in it.

Lynn Timm  

They can continue. Yes, once you sign up for Medicare Supplement, you can stay in it for the rest of your life. They can’t kick you out unless you don’t pay your bill. I see So the plan coverage never changes. The premiums just go up. But because that population is getting older and sicker and they’re not bringing in new people that are turning 65 that can elect that plan, we’re seeing claims go up. Obviously, as the population ages and that plan is affecting other plans. So if you have a carrier, obviously they had offered Plan F and they offered the other plans. Now the Plan F claims can help, you know, bring up the cost of everything, right?

Ken Moraif  

Because those are lost. They’re losing money on those Exactly. So people who were on Plan F are going to see that go away.

Lynn Timm  

No plan f will continue. And if they want to stay on it, they can stay on it until they die. But, and the company still has to, you know, they have to honor them, manage

Ken Moraif  

it, okay. But going forward, Plan F is gone.

Lynn Timm  

It can’t be sold to new people after 2020. Okay, any

Ken Moraif  

other parts of this that we should know about?

Lynn Timm  

Well, some of the other things that are driving these cost increases are, of course, post covid utilization. So people when, when we were locked in our houses and your businesses were closed, you know, you weren’t going to your doctor visits, you weren’t getting that surgery, maybe that you needed or you were putting it off. So what we saw is, when we came out of the covid era, medical costs skyrocketed, because people were all of a sudden going to the demand exactly, and all of a sudden they’re getting everything done. Also, medical costs are increasing inflation. You know, all of these things are factors that are affecting the cost of Medicare Supplements.

Ken Moraif  

So when a when a client, talks to you about that, what’s, what’s your advice in terms of those things?

Lynn Timm  

Well, we talk about, you know, we shop the different companies because different carriers have different pricing. So they’re not all priced the same. We look at, maybe statistically, what is their history of rate increases that doesn’t predict it’s like the stock market. You can’t predict what they’re going to do moving forward, but we can kind of get an idea of this financial stability. There’s other plans to look at, a high deductible plan, maybe that’s going to be a fraction of the cost, and yes, you’re protected with a max out of pocket that’s relatively low. So those are some of the things you can do to try to keep costs a little bit lower moving forward.

Ken Moraif  

Okay, yeah, so, and I think the important thing for everybody who’s listening slash watching this podcast is to talk to a professional about it, because it is very complex. There are so many moving parts. It’s like it’s a puzzle, and all the different pieces have to fit together. And then there are some parts that even talking to professional can’t help because they can’t even see it, and you have to go to Medicare, Medicare, medicare.gov, easy for me to say, but you know what we do, obviously, is we help clients who the whole thing, even the medicare.gov part? Yes. So ladies and gentlemen, as usual, I hope you had more fun than a human being should be allowed to have when talking about Medicare and Obamacare and how to keep your costs down, and if we could help you to keep your costs down or save some money, then you know what? It was more fun than a human being should be allowed to have. So I hope this finds you healthy, wealthy and wise. Make sure you like and subscribe to our podcast. It helps us tremendously, and we’ll talk soon.