On this episode of A Wiser Retirement™, Casey Smith is joined by Logan Steele from Steele Choice Insurance to talk about medical costs during retirement and preparing for the unexpected. They go over Medicare, long-term care, healthcare costs, Medigap, and traveling overseas for medical procedures.
Related Podcasts:
- Ep 179: Long-Term Care Insurance: To Buy or Not to Buy?
- Ep 188: Current State of Healthcare and Medicare Open Enrollment
Related YouTube Videos:
- What is IRMAA?
Other Links:
- Steele Choice Insurance
Learn More about Wiser Wealth Management:
- Our website
- Schedule a complimentary consultation (learn more about our services)
- Click here to download one of our free guides that covers financial planning topics like retirement, investing, taxes, divorce, and more!
Connect With Wiser Wealth Management:
- YouTube Channel
- Facebook
- LinkedIn
- Instagram
- Twitter
- Casey Smith's Twitter
- Podcast
- Blog
This podcast was produced by Wiser Wealth Management. Thanks for listening!
On this episode of A Wiser Retirement™, Casey Smith is joined by Logan Steele from Steele Choice Insurance to talk about medical costs during retirement and preparing for the unexpected. They go over Medicare, long-term care, healthcare costs, Medigap, and traveling overseas for medical procedures.
Related Podcasts:
- Ep 179: Long-Term Care Insurance: To Buy or Not to Buy?
- Ep 188: Current State of Healthcare and Medicare Open Enrollment
Related YouTube Videos:
- What is IRMAA?
Other Links:
- Steele Choice Insurance
Learn More about Wiser Wealth Management:
- Our website
- Schedule a complimentary consultation (learn more about our services)
- Click here to download one of our free guides that covers financial planning topics like retirement, investing, taxes, divorce, and more!
Connect With Wiser Wealth Management:
- YouTube Channel
- Facebook
- LinkedIn
- Instagram
- Twitter
- Casey Smith's Twitter
- Podcast
- Blog
This podcast was produced by Wiser Wealth Management. Thanks for listening!
I've never had to help a client purchase a long-term care policy to cover the full cost of staying in a long-term care unit, because typically you have subtype of a pension or social security and then you have your portfolio which puts off income, and so you're only ensuring the gap. Exactly Right. And the cost of long-term care is going up about 2% per year, so you can typically solve it between the $2,000 to $4,000 monthly benefit and then, if you're younger, you just add the 2% inflation writer to the policy, exactly.
Speaker 3:And it works.
Speaker 1:And then our software is able to show you. This is where you are. I joke with people. I say it's like the old Nancy Reagan drug campaign from when we were kids. This is your brain, this is your brain on drugs. I say this is your portfolio. Yeah, this is your portfolio in a nursing home. Sure, welcome to the Rise of Retirement Podcast. We believe the best financial advice should always be conflict-free. I'm your host, casey Smith, guiding you to Financial Freedom. Today is my co-host, logan Steele from Steel Choice Insurance. Hi, logan, hey Casey, how are you? This is what Trip number? What 4 or 5?
Speaker 3:for you. I think it's 3.
Speaker 1:Trip number 3. Yeah, welcome back. Thanks for having me back yeah.
Speaker 1:Appreciate it. I'm going to talk about medical costs during retirement and preparing for the unexpected, and it sounds like a boring topic, but it's actually very interesting because people don't really pay attention to this stuff until 64 and a half and then they go oh yeah, when I go to this Medicare or when I leave my employer, this medical stuff is going to be expensive and it's going to be a really bad insurance and I'm like actually no, it's actually not a bad deal. I mean, that's partially why, politically, so many people want Medicare for all right, Right.
Speaker 3:Right, absolutely, and that's, I think, still on the table there. We'll see this next legislation, but when we?
Speaker 1:look at when we do financial planning for like a 25-year-old, 30-year-old, and you project out today's health care costs at 5.3% inflation. Yeah, it's going to have to be a change, because your medical costs are hundreds of thousands of dollars. That's just the premiums.
Speaker 3:Yeah, it's unsustainable, yeah, when your health care inflation is two, two and a half times what it is. Yes, everything else out there.
Speaker 1:Yeah, definitely a problem, but that's not what today's about. Today's about your approaching retirement and what do we need to be doing? Obviously, we're going to sign up for Medicare, we're going to pick a supplemental plan, but in fact, is the system worse than the corporate insurance or is it better than corporate insurance?
Speaker 3:Yeah, so I think what people are, like you said, kind of concerned about but surprised about in a positive way, is coming from a corporate plan. They're used to a PPO plan. The employer's paying, say, 70% 75% of the plan. They have dental, they have vision. They'll might have 100 to $300 per month coming out of their monthly check. I'm going to Medicare. I'm going to lose all my doctors.
Speaker 3:I see all these things when I look online that say that doctors are dropping out of Medicare, that they're not going to be covering. So yeah, there's a lot of scare tactics out there. There really are. So yeah, really a lot of my time has spent just kind of comforting folks and say, hey, you got some great options when you're going to Medicare. Now Medicare, of course, is at 65. So somebody's retiring earlier than that.
Speaker 3:Then there's going to be some other things we can talk through. But if we talk about just Medicare, when they move to Medicare whether it be a Medicare supplement, medicare Advantage what they'll find is generally a much higher level of coverage in which they had through their employer. So we're talking about deductibles from zero to usually $240. Chances are that it's much lower than their current deductible, the access to care that you're going to have a Medicare is going to be usually as great, if not greater. Somebody goes with Medicare supplement as long as that provider takes Medicare, which most of them do. Yeah, you're going to have some that are dropping out, but living especially in a metropolitan area like Atlanta and Marietta area, you're not going to have a problem finding a provider.
Speaker 3:All the major hospital systems, of course, are going to be in network with Medicare and accept Medicare reimbursement rates, so they'll be fine with any Medicare supplement as well. Medicare supplements, again, have zero networks. So as long as that provider takes Medicare, they're going to take the Medicare supplement plan. So access to care and then cost of care. So cost of care when you're on Medicare you have that $240 deductible. That's what it is this year under Medicare Part B, and if you have a Plan G, medicare supplement that covers 100% of the rest. So if somebody's concerned about hospitalization, surgeries, major imaging, cat scans, mris, number of doctors, visits their costs are very minimal, especially compared, likely, to their corporate plan that they have now, or even if they're on a individual health insurance plan.
Speaker 3:Prescriptions a bit of a different category. So honestly, we could probably do like a whole podcast just on prescription drug, because it's very complicated and it's a major part of health care costs for seniors. It's going to be higher than it. What is going to be for medical costs? So that is changing. We have new legislation that was signed last year, the Inflation Reduction Act, so that actually capped the cost of covered medications under Part D, which is for prescription drugs for people on Medicare, to $8,000 this year. We've never had a cap on prescription drugs for people on Medicare since Medicare started in 1965.
Speaker 1:That means the max you can spend on drugs is $8,000. Above that it's covered.
Speaker 3:Above that, it's covered at 100%. We had a catastrophic level before that. So this past year you would pay 5%. So nearly covered, 95% covered. But yeah, this year it's capped at the 8,000. Now it does have to be listed as a covered formulary medication, so it's got to be covered under the plan. So not all prescription drug plans are going to be built exactly the same. They need to look up their medications and that's a lot of what I do on my side is we'll look up medications and see which plan is going to be best. But for those plans that cover that medication, yeah, you're capped at the 8,000 amount and that's scheduled to go down to 2,000 next year.
Speaker 1:So insulin's always been a big expense for people. Does that fall?
Speaker 3:here yeah. It will fall into there so yeah, you have the insulin savings program that was signed a couple of years ago so that cap's covered insulin at $35. So that was a big savings for folks that are diabetic and taking insulin. But yeah, that'll be included there as well if it's under Part D. There are some medications under Part B, but for the most part, the sake of this conversation.
Speaker 1:Can you sign up for Part D after the fact? So if you're 70 years old, can you go back and get Part D?
Speaker 3:Is that a one-time election, so usually people would sign up right when they're retiring for Part D. Some people do delay it. That's it's not something advisable in my opinion, because you know you're paying a compounding penalty for For each month that you go without prescription drug covers.
Speaker 3:There is a late enrollment penalty. Some people do that kind of to avoid the Irma with which we've talked about on here a lot. Yeah, and for you know, some seniors, if they're gonna be higher income, higher net worth and yeah, they're gonna be paying quite a bit more for their Medicare. You know, granted it's, it's probably gonna be a smaller percentage of their overall pay.
Speaker 3:Yeah, they're yeah but you know, from that aspect, yes, some of those people choose to go without prescription drug period coverage for that period of time. But again, I wouldn't advise that. But you can get it later on. Yes, to answer your question, it would just have to be during that open enrollment period to do so where somebody had a loss of coverage. Because honestly I mean I mean I work with a lot of people that are, say, retiring at age 70. You know they've carried their corporate plan. We'll do that analysis and I've done that with several of your clients Does it make sense to go ahead and take Medicare at 65 or does it make sense to stay on my company's plan?
Speaker 3:Right like everything else, it depends.
Speaker 1:That's right. Yeah, Every family or sit is. Every situation is unique, right Right right.
Speaker 3:But yeah, I mean just go back to Overall again. I mean concerns for people. Most people are gonna find that they're gonna receive a higher level of care, of insurance under Medicare at a lower cost and what they have now and it's it's yet to be seen kind of you know how that's gonna work with prescription drugs. That's kind of the the big elephant in the room at this point. You know, how is that? When you're putting a cap of two thousand dollars, how is that gonna affect the drug plans next year? Yeah, true, I Don't know. I don't know, we'll see, but there's gonna have to be some, you know, major changes there and there it's gonna be a shared cost, the way as the bill is written. So you know, majority of that Reduction or that cost is gonna be absorbed by the manufacturer, but part of that is gonna be by the plan, part of that is gonna be subsidized.
Speaker 3:So you know, it's gonna be some tweaks over the next few years.
Speaker 1:I have a feeling so it sounds like we should have any fear in transitioning to Medicare because it's a lesser coverage. It sounds like in some many cases, financially it's, it's a Kind of a win-win. But what about? What about? You know, we have Metagap and then we have the supplement, right? So plan G, that's a Supplement plan.
Speaker 3:That's a supplement plan right. Okay, so, 65 year old and Marietta, you know they should expect to spend, you know, 135 to 150 bucks a month. On A and G yeah for plan G that's gonna go up, maybe in addition to the 175, you pay For part.
Speaker 1:B for part B, so you're looking at 300 bucks a month You're looking at. Yeah, as a small business owner, I will take that exactly.
Speaker 3:Yeah, exactly 300 bucks a month for a great plan, for an excellent plan.
Speaker 1:We have really good healthcare here, but we're spending. It's more than 300. Yeah, yeah.
Speaker 3:Medicare is quite a bit better than what you can get for a small business, right, you know? Unless you're spending $4,000 a month for an employee, so right that really makes sense. Yeah, so they'll. They'll find a, you know, a nice benefit at a low cost. Now you know, medicare part B and part plan G premiums are gonna be going up each year. Kind of figure 10% give or take On an annual basis. Prescription drug costs are gonna be going up each year.
Speaker 3:So you know, as you know, most seniors of that total cost they're gonna be spending on health care expenses over the course of the years is really gonna be Weighted in their later years, right, right, yeah.
Speaker 1:Well, in our, in our planning, obviously we we have all the the tables for Medicare and then the supplemental plans or the Medigap plan and then our advantage in Medigap, and then we also budget about $1800 a year per person for out-of-pocket expenses. And Some people go, oh, that seems kind of low. And actually it seems. You know, because you you don't have as much out-of-pocket when you're on the Medicare right program that it seems to be a realistic number. There there is a study that we found in preparation for this by the health and retirement is called the health and retirement study. I assume this is done by the government, but the people that that pulled this out. Basically, you know, out-of-pocket what. What are we expecting? And between $2,000 and $5,000 An increase in the cost. So you have your normal cost. This is not your total health care cost, we just have your normal cost.
Speaker 1:The surprise of hey, we have bigger health care expenses for 65 and older. Only 10.9% of participants which would be, should be everybody, pretty much every US citizen anyway was between two and five thousand dollars. Yep, so 10% of the entire population over the age of 65 had out-of-pocket or an increase in their normal health care from two to five thousand dollars. That was in 2022 that they did the study, but it's the 2012 to 2018 years. So this is in 2012 to 2018 is when the actual data is sure. And then 5.8% had an increase of five to ten thousand dollars, 3.3% of Medicare participants from 10 to 25,000. You kind of wonder in there if they aren't doing something that's Just not covered. Right, doing some type of a care? That's right, that's not.
Speaker 3:Yeah, that would be holistic health kind of stuff, you know two likely, two main categories for those individuals, and I don't know if they're including like long-term care into that like they're not okay.
Speaker 1:There's no long-term care. In fact, that's a good question.
Speaker 3:So prescriptions and dental. I mean you'd be surprised.
Speaker 1:I mean, dental is More than what most people oh, I'm sorry, you know what they do, they do Okay so here's what's included hospital stays, nursing home stays, doctor visits, dental services, outpatient outpatient surgery and prescription drugs or all the things that were Covered in the study, and home health care, which kind of sure in the nursing home category.
Speaker 3:Yeah, so that's gonna be where your bigger expenses? Certainly you're gonna be dull daycare, physical therapy, social worker.
Speaker 1:Transportation for elderly right, and then they have another category. So yeah, anything related to health is what's covered. 2% over 25,000.
Speaker 3:Got it? Yeah, so that 25,000. Yeah, I mean, it could be on dental, that could be on long-term care, it could be on prescriptions right now, which you know again, like we talked about, prescriptions are gonna go down. I mean that the average cost yeah, we can go through some good statistics, I brought some. So average cost is around $2,700 According to the Congressional Budget Office. That's for prescription drug costs for the average senior.
Speaker 1:It's on.
Speaker 3:Medicare 2,700. So there's, you know, gonna be kind of a big range in there, but if you figure that on the average is 2,700 and it's gonna be capped at 2,000 next year, right, that's a major major change. Yeah, so, and then total there's there's a bunch of studies out there to look at the total health care costs, taking out long-term care and then, you know, including long-term care, how that's gonna look over the course of, you know, individual or couples life from when they retired 865 through the their lifetime, and that number for 3,000, 323 numbers. This was at 315,000 as a total amount for a couple.
Speaker 3:Yeah, on average now that's not including long-term care, it's not including nursing home or assisted living, but 315,000 is basically what to budget there. So that's looking at Medicare premiums, prescriptions in all you know, medical cost over that, seniors lifetime. Once we add in long-term care and we can talk about this and I got some good numbers we can share here, you're looking at double that 662,000 for a couple Now for long-term care. It's only, it's about 70% of people will end up needing long-term care If they are at least 65. Now, right, right. So it's a good chunk of Americans and most people don't have long-term care insurance.
Speaker 3:You know some people think that Medicare covers long-term care. It does not.
Speaker 4:Are you curious why annuities keep coming up as a potential investment option? People are often told that annuities can effectively mitigate investment risks and help secure their financial future. However, annuities often benefit the salesperson. It might not be the best choice for you as a consumer to learn more about the various types of annuities, the negatives of owning them and better investment alternatives. We have a free e-book on our website just for you to download our e-book fire beware. Why do they keep trying to sell you that annuity? Simply click the link in the episode notes or visit wiser investor comm slash guides. Now let's get back to the episode I.
Speaker 1:Just I just wrapped up some planning with the families in Minnesota hmm, and we struggled with how to solve the long-term care piece because I'm like I'm looking at my screen going. This isn't like normal. And so we ended up just kind of punting and scheduling a fourth meeting. Okay, we're gonna. We don't know what's happening here. Well, I'm thinking we entered something wrong or something's going on, and so we we get online with, with, with Randy he's our long-term care guy and I'm showing him my screen and we've realized the cost in Minnesota is double what it costs in Georgia Literally double.
Speaker 1:It's like $89,000 for nursing home here in Georgia, but it's double that it was over 170,000. That was on our table. His table showed 139,000 would be the average nursing home stay in Minnesota. Then you start looking at other states. It's a big difference.
Speaker 3:It's a huge difference.
Speaker 1:I actually brought that list between states and Georgia is on the lower side. Yes, so I was very surprised by that.
Speaker 3:I don't want to put you in a spot, but what would you guess for Georgia? This is 2023 numbers for assisted living.
Speaker 1:Oh, assisted living Probably 45,000?
Speaker 3:Right, boom, You're on it.
Speaker 1:See stuff every day 4,300.
Speaker 3:That's the average in. Georgia. But if you were to go to, you have a lot of clients that are looking to go down to Florida. Oh yeah, I've often another $1,200, an extra $1,000 a month, yeah, done in Florida. I can see that, so that's an extra.
Speaker 1:Florida is also a little complicated because they have a lot of what they call CCRCs. So you pay to get in.
Speaker 3:You pay $150,000.
Speaker 1:Right.
Speaker 4:Initiation fee, right, yeah, I think some of that comes back, and you're starting to see some of that here too.
Speaker 1:Yes, yeah, but one side of the bill not the building, but the property is people coming in and going as a please, and then the far other side of the people who, like, can't leave the bed.
Speaker 3:So it's continuous care, right it's the whole idea Continuous care.
Speaker 1:What I find is that these places tend to be really good at one thing, but not good at all things.
Speaker 3:Yeah.
Speaker 1:So sometimes they still, after I paying all these entry fees, they still end up going somewhere else.
Speaker 3:I've heard similar stories, yeah.
Speaker 1:But yeah, that what's Washington. Is Washington around 160 for nursing home, or is that just? Do you just have? Do you just have Washington? Yeah, so Washington In the end of living.
Speaker 3:Yeah, quite a bit more. So. Assisted living in Washington yeah, 6,700. Per month, per month.
Speaker 1:Yeah.
Speaker 3:So $80,000 a year for assisted living. Nursing home. Nursing home, you're at 10,200 to 122,000.
Speaker 1:Yeah.
Speaker 3:For a that's for a semi-private room. You want a private room. You're up to 140,000.
Speaker 1:Yeah, so that's one of the states where they mandate you carry long-term care. So it's kind of becoming like a blue versus red thing Too many red states that have mandatory long-term care. That means if you're 25 years old you got to be carrying like a one year, at least a one year long-term care policy. Everybody has to do it. So it's not a bad idea. But what we see is, for whatever reason, the states that are mandating it just before they mandate it, the costs keep going up.
Speaker 3:So I thought that was strange.
Speaker 1:And I don't know how to resolve that in my head, like, how can the government make the costs go up other than fees, regulation, I don't know, but they, they all of a sudden the costs go way up.
Speaker 1:And then government says, okay, everyone has to have a policy now, but in the states where they're not even thinking about mandating it, the cost is lower. Yeah, yeah, so it's really, it's really strange. But like, okay, so you know, we can take a side. We have lots of podcasts on the long-term care insurance. But we can take a side note here and just just say I'd never, I've never had to help a client purchase a long-term care policy to cover the full cost of staying in a long-term care unit, because typically you have subtype of a pension or social security and then you have your portfolio which puts off income, and so you're only ensuring the gap, exactly, right. And so the cost of long-term care is going up about 2% per year. So you can typically solve it between the two to $4,000 monthly benefit, and then, if you're younger, you just add the 2% inflation writer to the policy, exactly.
Speaker 3:And it works.
Speaker 1:And then our software is able to show you. This is where you are. I joke with people. I say it's like the old Nancy Reagan drug campaign. From from when we, when we were kids. Yeah, this is your brain, this is your brain on drugs. Yeah, I say this is your portfolio. This is your portfolio in a nursing home.
Speaker 3:Sure Right. Yeah, that's a great way to explain it.
Speaker 1:So I'll show you what the drawdown is in a nursing home. And then you overlay the new policy on top of it and it'll show you what, how much money, more money, you would have by having this policy. And then this is the part that interest agents don't show you is. I show them this is what the difference is between keeping that money invested versus pulling it out of the portfolio, right, and then the cost is well, it's better to staying in the portfolio to cover it, and so you can kind of self insure it. And then in some cases it doesn't work that way, and that's what I was stuck on in the Minnesota situation, cause, like holy crap, I can't.
Speaker 3:I can't solve this thing.
Speaker 1:This is a very wealthy client and we ended up backing into they needed a policy of about $7,500 a month in today's dollars, cause if they're 57 today, which is the time you should be buying it, we don't. We're not really assuming you're going to use it tomorrow, we're assuming you're going to use it at around age 80. Right, and?
Speaker 1:so anyway, it's. It's it's. If protecting your assets is important to you, in passing that on to the next generation, you're going to have to have some type of a long-term care policy to help ensure that. Exactly, yeah, no, I no. If you're okay with going to zero and leave them with nothing, right? You're okay with potentially going on state care which is not, which is not the end of the world.
Speaker 3:It's not the end of the world, but yeah, there is a big, very big difference between going to a nursing home that's $4,000 a month versus $12,000 a month. I've been in those $2,000 a month places and it's sad.
Speaker 3:It's sad, unfortunately, yeah, it is, but no, I 100% agree with what you're saying. You know, and that's how I usually advise most of my clients. I don't specialize in long-term care, but yeah, it is, you know, part of my business, and having it as a supplemental to their self-insurance aspect is really making it a little bit more aspect is really makes the most amount of sense for for most folks.
Speaker 3:But you know, long-term care is not what it used to be either. Um, you know, 20 years ago you could get you know an excellent plan. It would pay unlimited amounts and you're paying, you know, $100, $200 a month. Some people were locking in those premiums, but companies lost so much money. They lost a ton of money and they lost a ton of money. There was a family.
Speaker 1:They've uh, husband and wife have passed away now, but they had a CNA policy which they got out of long-term care like decades ago. And CNA found every reason not to pay it, oh yeah.
Speaker 1:It's like we got one denied one time because, uh, the nurse same nurse, it was in home, in home care Same nurse, uh, just signed it slightly different, like her signature was a little different. So they denied it because the signature did not look the same as prior signatures. And I was like, good grief, this is, this is tough, that's tough. Yeah, uh, no, eventually it was approved, but they look for every reason not not to pay.
Speaker 3:Yeah.
Speaker 1:The newer policies don't seem to be um that way at all, uh, and, and that's because they've built them where they're profitable for the company now or received to be.
Speaker 3:Right, yeah, and those premiums are going up each year. You're getting that notice saying which one do you want a higher premium or a lower benefit? That's right.
Speaker 1:And you can pay not to get it, to have a guaranteed premium. There's also hybrid policies where you can basically um pay for 10 or 20 years and then you're just paid up. Those are more expensive, but if you die, uh, you get um family gets a death benefit. So in most cases most of your premium goes back to the beneficiaries if you never use the policy. But again, that, that that's, uh, that's a whole separate podcast on long-term care.
Speaker 1:So is this safe to say that you think that it would be more of a long-term care scenario? Is better to be planning to hedge versus your actual health care cost on Medicare?
Speaker 3:Yeah, absolutely. I think for most people that is gonna be the best way to go is to hedge their cost on it. I mean, just look at the statistics.
Speaker 3:I said so 70% of people are you know, expecting to need long-term care at some point in their life. Now, you know, if you have a plan for it, which most people don't, but if they're sitting down with you, they do have a plan to potentially self-insure and if that aligns up with their needs, absolutely, but most people don't have a plan for it. You don't have a plan for it, then one way to easily get a plan for it is with a policy, and, yeah, there's a bunch of different ways to skin it, so it needs to be something that's affordable. But, yeah, for people that are purchasing it, they should have the understanding that the plan is not gonna pay 100% of what they might end up needing it for, Right, so they can't rely fully on the policy for that.
Speaker 1:Yeah, but you have so much lost money. If you're insuring it, I get it. I've eliminated a few salespeople in conversations very quickly when they said, oh, they should just go ahead and get a policy for $12,000 a month and this will fully cover it. And then you look at the premiums. You're like they're gonna give up a vacation a year to pay this premium. I know that's great.
Speaker 3:Yeah, and you have to look at your own situation too. What is your family health situation? What kind of health are you currently in? It can be difficult to get a long-term care policy. So even for people that it's a great fit for them, or they financially is a great fit for them, they just may not be eligible for it. So there's a lot of people now that are getting it in their 40s. Ideally, you wait till your 50s and try to delay that as long as possible, but I mean honestly, it's probably close to almost half of the people that I talk to that are looking in their 50s and 60s that they don't qualify.
Speaker 1:Yeah, yeah.
Speaker 3:I mean if there be a medical side. Yeah, because we're looking at really the top carriers. Now you can get in certain kind of compromise plans that have a lot of exclusions and at that point, no, it's just, you know, try to self-insure if you can. But yeah, it can be kind of difficult. You know somebody takes a lot of medications, that their BMI is high. If they've had a heart attack in the last five or 10 years, if they've dealt with cancer before, you know, with a lot of carriers that's going to be automatic exclusion. Otherwise it's going to be a tiered rating, so that that rate is going to be higher.
Speaker 1:Yeah, and long-term care can be built on different platforms. There's actually long-term care annuities which we've used one time in 24 years here, and that was with a person who had triple bypass. Nobody would.
Speaker 3:Sure.
Speaker 1:We'd cover them, yep, but annuity doesn't have that type of that's true.
Speaker 3:It's not going to have that same restriction, same restriction.
Speaker 1:There's ones built on whole life and they're just traditional buying a policy. I think for more wealthier clients it makes sense just to write a check one time for a paid up policy. That's a hybrid policy, Knowing that you get that money back or a little bit more. If you don't use the policy, then it hedges the cost of the long-term care expense.
Speaker 3:Sure there can be some tax benefits there to do a qualified plan yes.
Speaker 3:Yeah, true, very true yeah you're right, a bunch of different ways to skin that. But knowing what the potential exposure is, I think, will certainly help individuals make that determination on what it's going to be. And it's something between men and women too. So women are going to be living longer, which means they're more likely to be in long-term care for a longer period of time. So you're looking at longevity. So it might be something where you're speaking with a couple and perhaps it's just the wife that's receiving long-term care and the husband chooses to self-insure as an example.
Speaker 1:Yeah, there's ways to mitigate health care costs. Unfortunately, it requires staying healthy, which is not as fun it is for some people. Some people love working out and exercise and kind of make it their passion, but I am not that person. I have to have the podcast on when I'm on the elliptical or something to distract me from the fact that I'm actually working out.
Speaker 3:Right, yeah, Well, I mean honestly, that's probably one of the biggest controls you have on your health care expenses Staying healthy, staying healthy, staying out of the system, staying out of the system.
Speaker 1:That's right, yeah, I get. We just hear horror stories, even this, like I struggle, because you have Well-Star here, marietta, which is right in our back door, and you have Piedmont, which is down in Atlanta, and then you have North Northside Hospital, which is.
Speaker 3:I guess Northside and Emory. Yeah, those are four big ones, yep.
Speaker 1:So you know, I sit in a very unique position and I get to see all these families that are way older than me, where I'm getting closer to them, it seems like. But the point is, is that quality of care? Like I I've say this publicly all the time I would not go to a Well-Star facility. Piedmont has all the money, but I still see clients who had issues. This diagnosis down there Northside seems to have it together, but then I hear people complain about that too, and so then I come all the way back to full circle, saying the best thing to do is stay out of the system.
Speaker 3:Stay out of the system and really I mean all four of those hospital systems. They're gonna have specialists that are gonna be, you know, some of the top in their field. But I understand what you're saying and it can. It certainly can be easy to paint a broad brush and I speak with clients about all of the different hospital systems and there's a lot of positives to say and a lot of negatives to say about each one. So it's just that, each individual situation. But yeah, piedmont for heart, they have a great, you know, heart institute. You got Emory for Cancer, wind Shape Center, which is excellent. Yeah, northside kind of does it all baby factory and everything else.
Speaker 3:But yeah, you're right, are you? I'm curious because I've heard more clients that are now going out side of the United States for care. Do you ever have that conversation with?
Speaker 1:clients? I haven't. I've had a few that have threatened to say well, we're thinking about doing this because I get this procedure in Mexico and it's temporary or it's not approved here, or something like that. But no, I haven't. I had someone that went out to Arizona. Would that be the Mayo Clinic? Maybe?
Speaker 2:out in Arizona.
Speaker 1:They've done that, but no, for the most part I think everyone has stayed pretty local.
Speaker 3:I'm having more clients that are telling me that well, prescriptions in the category of dental that they're going outside of the United States for it.
Speaker 1:Interesting.
Speaker 3:So yeah, you're seeing a lot more.
Speaker 1:Wait a minute. Why dental? That seems really easy.
Speaker 3:Yeah, you would think, but I mean, you know some of these dental procedures. You know, somebody needs multiple crowns or veneers or implants.
Speaker 1:It's all costs, not quality of care.
Speaker 3:I mean, they are claiming many are claiming that they can receive comparable quality of care at a far drastically reduced premium. So you have this kind of whole area of medical tourism where people are going down to Costa Rica or going to Japan or whatever.
Speaker 1:They come back with gold teeth.
Speaker 3:Yeah, I talked to a client yesterday and they go over to Japan excuse me, to China every year.
Speaker 1:China. I know they're like $8,000 to get there.
Speaker 3:Yeah, they go over there, they see family, they get their dental work done they save a few thousand dollars in their dental.
Speaker 1:Well, they're seeing family. They're going to see family and their idea of fun is get some dental work while they're there.
Speaker 3:Costa Rica is a big one.
Speaker 1:Yeah, a lot of people just go down to Costa Rica for that.
Speaker 3:Give a lot of expats there anyway, yeah you can hop down there in two hours and, you know, not a very expensive plane ticket down there. But yeah, you're saving quite a bit by doing it. Medications is a big one too. I mean you're seeing far more international pharmacies that are popping up that give very easy access for Americans to do so.
Speaker 4:Canada.
Speaker 3:India. Those are really kind of the two main ones. But yeah, I have a lot of clients, for example, to take Eloquist. Eloquist is one of those medication you probably saw. That's on that top 10 list. That Medicare is going to start negotiating. That's going to go into effect in 2026. But it's a crazy number. It's like between what beneficiaries are spending and what the plans are spending and what Medicare subsidizes is over $16.5 billion when they did the study that was between, I want to say, like June 2022 to last year.
Speaker 3:So 12 month period, $16.5 billion for one medication, yeah, yeah, so you think they're printing money? They're just printing money? Yeah, but I have clients that get it from India for 50 bucks a month.
Speaker 4:Oh, wow.
Speaker 3:Yeah, now whether it's the exact same ingredients.
Speaker 4:I don't know.
Speaker 1:I was about to say. Yeah again, it's not something I endorse them doing, but I'm saying people are moving towards those efforts, but are they having it shipped here and calling it something else? Or they're just hopping and playing and going to India?
Speaker 3:No, they're having it shipped here and that's legal. They're able to get it.
Speaker 1:Interesting.
Speaker 3:Yeah, you're seeing a lot of it and you're starting to see it even on a group basis now as well. Some groups are using international pharmacies. So, again, prescription is. I talked about it a lot, but it's a big portion of it. It's one of the biggest problems that we have in our healthcare system right now and it is actively being addressed as a matter of is it gonna actually work or not.
Speaker 1:Yeah, well, it sounds expensive if we're basically would be subsidizing all that, not the India part but just the real cost of those drugs. And then we're the max out of pocket said. Is it gonna be $2,000 for?
Speaker 3:Yeah, $2,000 next year.
Speaker 1:Yeah, so in 2025.
Speaker 3:In 2025, correct. Okay, yeah, and then 2026 is when they're gonna be able to Medicare is gonna start implementing the negotiation practices on at least those first 10 medications.
Speaker 1:Okay, yeah, so when did all this start? Like when was this the prior administration, or is it the current administration that's doing this?
Speaker 3:Well, you had the Inflation Reduction Act that was under Biden, so yeah, so that was part of.
Speaker 1:That's what this is. That's the majority of it.
Speaker 2:Yes.
Speaker 3:Okay, that's the majority of it. But yeah, the Insulin Savings Program, which is a portion of it's a separate bill, but yeah, that was back previous administration, so I mean it's really somewhat of a bipartisan issue. I mean, both sides are kind of on board with it.
Speaker 1:There's a lot of bipartisan issues actually that don't get enough credit.
Speaker 2:Right.
Speaker 1:But we just got the world we live in right now. Unfortunately, it's not.
Speaker 3:Yeah, it's not, you know it's. When it comes to Medicare Social Security, it's. You know it's the third rail. Yeah, yeah, Nobody, no politician, wants to touch either of those. So, I don't see those going away.
Speaker 1:Yeah, that's. The other thing is actually I'm doing a little video on that after our show today talking about Social Security and what happens when the trust fund runs out. And it kind of falls right in line with all the Medicare stuff too.
Speaker 3:Sure.
Speaker 1:Okay. So I think what we've learned here is Medicare is not scary. Actually, it's a really good plan.
Speaker 3:It works.
Speaker 1:Yeah, it works, you know. This is why they want Medicare for all. Some people call it universal healthcare, but to get it at 65, you can't get Medicare earlier if you're disabled.
Speaker 3:You can right. Yep, yeah, disabled Social Security, disability after two years yeah.
Speaker 1:Medicare kicks in.
Speaker 3:So and those individuals will be eligible for all the same benefits that you know. Someone over age 65, except for Medicare supplement premiums, are a lot more expensive when you're under 65. When you're under age 65. Yeah, and it's a little bit different state by state. So most of those people go with Medicare Advantage, which is fine. I mean, usually that's financially makes sense versus paying $1,200, $1,300 a month for a Medicare supplement premium.
Speaker 1:Right. Well, Logan, how do they find you? How do our clients find you other than calling us Sure?
Speaker 3:Absolutely, they can go to my website StealChoicecom. I have my phone number, of course, on their email address they can schedule a call, a 30 minute consultation, go through their questions. So yeah, happy to help out in any way I can.
Speaker 1:Well, you've been a great help to the client base already, so we appreciate that You're always very prompt with emails and phone calls, and that's huge. In this business, it's really hard to find people that return phone calls and emails Like I don't understand it.
Speaker 3:I try to be. Not perfect, but to do my best. I understand All right Well thanks for your time today.
Speaker 1:If you want to keep listening more on this topic, we have episode 179. You can go back to. This is episode 212, which is crazy, 212 times. We've done this. 179, Launcher and Care Insurance to Buy or Not to Buy Pretty sure that was with Randy. Episode 188, Current State of Healthcare and Medicare Open Enrollment I think that was one of ours we did. We also have a YouTube video. We referenced Irma earlier. If you want to learn what Irma means and you can find that on the YouTube channel AYZER Retirement, Linked also in the show notes. Here we also link to Logan's website, Steel Choice Insurance, that you can find there as well. Thanks for listening today's episode. If you're interested in learning more about Wiserwealth Management, I want to schedule a consultation to meet with one of our fiduciary financial advisors. You can do so by going to wiserenvestorcom or you can click on the link in the episode notes. We'll see you guys next week.
Speaker 2:Thanks for listening to AYZER Retirement podcast. We hope you enjoyed today's episode. Make sure to subscribe wherever you're listening, that way you don't miss any new episodes. We'd also appreciate if you could leave a rating and review. If you have any questions about anything that was discussed today, head to wiserenvestorcom and reach out.
Speaker 3:This episode was produced by Edward Versundes.
Speaker 2:This podcast is strictly for informational purposes only and is not to be considered as investment advice or a solicitation to buy or sell any financial products, securities, digital assets or any other investment vehicles or a basis to make any financial decisions. Wiserwealth Management Incorporated is a registered investment advisor with SEC. The host and or guest may personally own securities, digital assets or other investment vehicles mentioned on this podcast. Neither the host nor guest of the show are compensated for their participation and no referral fees are paid to or received by any host or guest for clients, listeners or similar interests. Investments involve risk and, unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial advisor, tax professional, insurance professional and or legal professional before implementing any strategy discussed herein. Past performance is not indicative of future performance.