This podcast is being brought to you by John Hancock Investment Management Distributors LLC, member FINRA, SIPC. The views and opinions expressed in this podcast are those of the speakers, are subject to change as market and other conditions warrant, and do not constitute investment advice or a recommendation regarding any specific product or security. There is no guarantee that any investment strategy discussed will be successful or achieve any particular level of results. Any economic or market performance information is historical and is not indicative of future results, and no forecasts are guaranteed. Investing involves risks, including the potential loss of principal.

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John

Welcome to the Portfolio Intelligence podcast, the podcast that helps you make smarter decisions about your financial future. I’m your host, John Bryson, and today, November 14, we’re tackling a topic that affects nearly every American planning for retirement, and that is Medicare. With costs rising and new rules impacting how much retirees pay, it’s more important than ever to understand how Medicare works and how to avoid costly mistakes.

Joining us today is Danielle Roberts, a founding partner at Boomer Benefits and author of 10 Costly Medicare Mistakes You Can’t Afford to Make. Danielle is a well-recognized Medicare insurance expert and frequent speaker for both agent and consumer groups. She has appeared on more than 200 podcasts, radio shows, and television programs to discuss Medicare. So, whether you’re planning for your own retirement or working with a financial advisor, this episode will help you prepare for what’s ahead. Danielle, welcome back to the podcast.

Danielle

Thank you. It’s my pleasure to be here.

John

Excellent. Hey, I thought we would start with the basics. What are the biggest changes to Medicare that people should be aware of as we head into 2026?

Danielle

Well, it’s interesting because of the government shutdown, we actually don’t have some of the Medicare figures that we normally would by now. So just be aware that the Part B premiums typically go up a little bit. I heard a projection that they would go from the current rate up to $206 next year, and we are just waiting for them to announce that. But one of the other big changes is that we saw this year, due to some unintended consequences of the Inflation Reduction Act a few years ago, a bunch of carriers that have exited the Part D market. We have fewer choices for Part D plans, and we also have a lot of folks out there who are losing their Medicare Advantage plan. It’s projected around 2 million people have received a letter that their plan is exiting the market. So, if you got a letter like that, it’s important that you shop for a new plan as soon as possible so that you have good coverage in place for January 1.

John

Ok, good insights and a couple of things I want to dig into there. So, you mentioned the Medicare Part B premiums are rising again or that’s the expectation. What does that mean for someone budgeting for retirement?

Danielle

It’s a good point. So, I think the cost-of-living adjustment (COLA) increase I saw, the projection there was that the average check was going to go up around $56 a month. And so if you figure that a $20 hike in the Part B premium is going to eat up part of that, you have to budget for that and know that really your increase was only around the $30 mark.

John

Ok, all right. So, you got to kind of think through those even smaller level details as people put together budgets, which is really important. Ok, all right.

Danielle

Yeah, absolutely.

John

Let’s dig into some commentary around the book you’ve written, the bestseller, 10 Costly Medicare Mistakes You Can’t Afford to Make. What do you think is the big mistake that catches most people off guard?

Danielle

The biggest mistake, in fact—in my book it’s chapter eight, and it’s called ‘The Big Mistake’—that folks don’t realize when they first sign up for Medicare Part B, they get a one-time six-month window to enroll in any Medigap plan in their zip code. And when they use that window, they don’t have to answer any health questions. There is no health underwriting. After that window passes, in most states, to enroll in a Medigap plan, or apply for one, or change from one Medigap plan to another, you’ll answer a whole page of health questions. You have an underwriter looking at your medical records, looking at your prescription histories, and they can accept or decline you.

And people get that confused with the annual election period in the fall, which runs from October 15 to December 7 and actually has nothing to do with Medigap at all, and is not a time when you can sign up for a Medigap plan and skip the health questions. That annual election period in the fall is for changing your drug plan or your Medicare Advantage plan. And that’s because those plans change their benefits each year. They can change their premiums, deductibles, copays, coinsurance, pharmacy network, doctor network, and drug formulary. Because they can change the plan on you, you then get a period from October 15 to December 7 to change to a different plan if the changes to your current plan are not acceptable to you.

And Medigap plans, like a Plan G or Plan N, they don’t change their benefits every year the way that the drug plans and Advantage plans do, so they don’t need an election period. And yet, every year we meet people that will call us in October or November wanting to sign up for a Medigap plan and assuming that means they can do it during open enrollment with no health questions. And in most states, that is just not the case.

John

Ok, that’s really helpful.

So, many retirees that we hear from are surprised by the IRMAA surcharges. Can you explain what that is and how it affects Medicare costs?

Danielle

Yeah. So, the Income-Related Monthly Adjustment Amount, or IRMAA as we refer to it in the agent’s world, is basically, they are charging you for your Part B and D premiums a surcharge based on your income. So, let’s say you were turning 65 in December. You would have already received a benefit determination letter in the mail from Social Security that said, ‘Hey, we looked at your income from two years ago, and based on that income, we are calculating that you will spend X dollars for Medicare Part B.’

So, while most people will pay that base rate, which in 2025 is $185, if you have an Income-Related Monthly Adjustment Amount, it will increase that. And for people in really high-income brackets, it can make your Part B premium over $600 a month.

So what you want to know about that is decisions that you make with your money when you’re 63 and 64 could certainly impact your premiums for Medicare when you’re 65 and 66. So it’s a great thing to really dig down on with your financial advisor to plan ahead, to see if there are ways that you can spread out sorts of income or maybe not take a big distribution all at once that could potentially inflate that premium for Medicare two years later.

John

Ok, now these are the insights we really like to get into on the Portfolio Intelligence podcast. So how can somebody avoid being pushed into a higher IRMAA bracket, especially if they’ve taken withdrawals from a retirement account?

Danielle

Yeah. So, I’ll tell you a couple of examples that we’ve seen over the years. Someone might sell a vacation property or a second home that they have as they’re heading into retirement. And if you have the opportunity to do that when you’re 62 instead of 63 or 64, you would potentially avoid that IRMAA bracket because it’s only a two-year look back. And then when you’re taking distributions, maybe instead of taking a big lump sum that all hits one year, maybe you take half of that in the current year and then half in January. So you spread that out over two years, and perhaps that lower amount means that it will impact your premium less. Now, if you’re really high income, you’re probably not going to be able to avoid that, but there are some strategies that are worth a conversation with your advisor just to see if there’s anything you can do to lower that. And then of course, if your income is lower now than it was two years ago because maybe you were still working or you went from full-time to part-time, there is an appeal form for that as well. So, you can file an appeal with Social Security and provide documentation saying, ‘Yeah, I made pretty good money two years ago, but since then I have retired or I’ve gone part-time or my income changed due to marriage, divorce, or death of a spouse.’ There are some reasons that are valid for appeal, and those are listed on a form called SSA-44. That’s the appeal form. And you can Google it and take a look at those reasons to see if any of those apply to you. And if they do and you appeal, it’s possible that they may lower that IRMAA right away instead of you having to wait two years for that lower income to catch up to you.

John

Ok. Again, great insights. Thanks for sharing that.

Let’s pivot a little bit here. How do supplemental plans like Medigap or Part D fit into a smart Medicare strategy for folks?

Danielle

Well, the thing about Medicare is, unlike insurance under 65 where you had a deductible and then a stop loss, an out-of-pocket maximum to protect you from spending beyond a certain amount, original Medicare doesn’t have that. Outpatient coverage on Medicare only covers 80%, so you pay the 20% forever without end. If you end up needing something like a lifetime of dialysis or long-term treatment for cancer, chemotherapy, or radiation, that 20% could be a significant amount of money that you would pay out of pocket. So, it’s important to sort of bolster that coverage and bring something in that’s going to pick up that 20%.

And so Medigap plans, also called Medicare supplements, what these do is they will step in to pay the deductibles, copays, and coinsurance that normally Medicare would assess to you. So now when you have that kind of plan, Medicare gets the bill, processes the claim, pays its share, and then instead of sending you the rest of those expenses as a bill in the mail, they’re actually going to send it over to your Medigap company which will step in to pay some or all of that for you. So, a healthy Medigap Plan G or even a Plan N is going to help you account for that 20% so that you don’t get stuck with it when a health condition may arise. And we never know when we’re going to get sick, so it’s good to purchase that insurance ahead of time so that you have it when you’re healthy so that you’re in good shape.

And then, when it comes to the Part D drug plans, I think a lot of people don’t realize that some chemotherapy treatments today are oral pills or oral chemo medications. And so, Part D is a really important piece of your coverage—even if you’re healthy at the time that you enroll—and you don’t take any medications or just take one or two meds and maybe you’re getting them at Walmart for $4. We don’t know when we’re going to get sick and you can only enroll in drug plans at certain times of the year.

So, I have an example in my book of a client years ago who skipped the drug plan and then was diagnosed with cancer and ended up spending around $20,000 in four months for her medication until we could get her into a drug plan. So, you need to know that without Part D, without drug coverage, you are uninsured for potentially very, very expensive medications that may be lifesaving that you really need.

John

Yeah, lifesaving. And they sneak up on you super fast and can be really expensive. That’s great insights.

So, I got a couple more questions for you. You’ve helped thousands navigate Medicare. What’s your one piece of advice you wish everybody knew before they enrolled?

Danielle

I always say that I wish there was a class that you had to attend, like it was mandatory, when you turned 60 to start your research early. Because you spend your whole life working for an employer who chooses all of your healthcare options for you, and then you get thrown into this national healthcare system at 65. It has four parts, 10 supplement options, literally hundreds or thousands of Advantage plans and drug plans. And this is just really overwhelming. It’s going to take you more than one sitting to sort of bend your brain around how all of this would work.

So, my one piece of advice is don’t wait until the last minute. You wanna start looking into these things at, say, 64. You can go online. You can go to Medicare’s website. You could go to our company’s website, boomerbenefits.com. You can go to YouTube where there are literally hundreds of great Medicare videos that will walk you through how things work. There are books that you can purchase. There are free Medicare one-on-one webinars that you can go to. And if you start learning it early, you won’t feel such a sense of panic and overwhelm as the people that wait until the very last minute, two days before they turn 65, because they’re dreading learning this big national healthcare system. I get it. But the more time that you give yourself, the better that you are going to be educated to make a choice that is the right fit for you, your personal needs, your health, and your budget.

John

That’s such good advice. I mean, you’re basically saying the resources that are out there, make sure you take advantage of them. Give yourself enough time so you’re not feeling that stress in the last few minutes.

Ok, so Danielle, tell me also, how can working with a financial advisor maybe help somebody make better Medicare decisions?

Danielle

Well, a lot of financial advisors really care about the whole picture for you, right? They’re not looking at just one piece of your retirement. They are going to know to guide you through things like how do we pay for long-term care? What kind of Medicare plan do we have in place? Do we need to have a rainy day fund if you have a certain type of coverage that is high deductible? And when you’re working with an advisor, many of whom go through Medicare training on their own because they want to learn about this, they want to help you plan for that. So, when you have an advisor, they’re going to have great resources for you to put you in touch with, of course, agencies like ours and other places where you can get that information. And they’re probably going to be able to warn you about some things that you maybe didn’t know about. I mentioned long-term care. A lot of people think that Medicare pays for that, but most financial advisors know that Medicare doesn’t. So, if you’ve been working with an advisor in the years leading up to Medicare, you’re not going to be caught off guard for the fact that there needs to be a solution for a potential long-term care stay that is outside of Medicare someday.

John

Yeah, Danielle, you’re absolutely right. Some inside baseball here, folks. We do a lot of work with Danielle, with financial advisors. Her webinars are some of the most popular and most well-attended webinars that we do because those financial advisors really want to understand Medicare for their clients. So, so I totally agree with you there.

Hey, last question. I want to look beyond 2026 into 2027 and further. What trends or potential changes should people be watching for in the Medicare landscape?

Danielle

Well, one of the interesting things we saw this year as the carriers are sort of finding their new normal…and what I mean by that is those unintended consequences that I mentioned from the Inflation Reduction Act a few years ago…hey basically put the squeeze on the insurance carriers on the drug coverage side. And so we saw a bunch of insurance companies leave the market when it comes to Part D. And then the Advantage plans that have a built-in Part D—those insurance carriers are still trying to find their footing, and I think we will continue to see disruption on that for the next year or two.

So, if you go the Medicare Advantage route, it’s really important that you look in the mailbox every September, carefully read your annual notice of change, and make sure that the plan that you’re on is renewing for #1 because we know that some have left the market. And #2, we may see bigger changes than usual. There could be bigger premium hikes, and you could see that some of the copays on your plan for hospital and doctor may go up. You don’t want to miss your opportunity to make a change.

So even though it’s never fun to get this big door-stopper packet—the annual notice of change from your carrier—you don’t want to set it aside on your desk or kitchen table. Take a few minutes, sit down, go through it carefully, and call your agent if you have questions about what’s changing. Be aware of anything that’s changing, that may mean you need to make a change in your coverage. With Medicare, it’s not a set-it-and-forget-it kind of insurance. You really need to be actively involved in managing it from year to year.

John

Danielle, it’s so good to talk to you again. You’re always bringing great insights to the podcast. We really do appreciate it.

Folks, if we can help you understand the real cost and complexities of Medicare in 2026 and beyond, we want to help. Reach out to your local John Hancock business consultant. We’re here to help you navigate this.

We have resources on our website. We have resources like Danielle that we can bounce questions off of. So, if you're nearing retirement or helping a loved one plan for it, we hope this was helpful for you today.

Folks, if you like this episode, please subscribe and share it with others who may find it beneficial. And as always, if you check out our website, you can find a number of tools that can help you with your practice and to deliver better outcomes for your portfolios. Thanks, as always, for listening. Thanks, Danielle.

John

This podcast is being brought to you by John Hancock Investment Management Distributors LLC. Member FINRA, SIPC. The views and opinions expressed in this podcast are those of the speaker, are subject to change as market and other conditions warrant, and do not constitute investment advice or a recommendation regarding any specific product or security. There is no guarantee that any investment strategy discussed will be successful or achieve any particular level of results. Any economic or market performance information is historical and is not indicative of future results, and no forecasts are guaranteed. Investing involves risks, including the potential loss of principal.

John Hancock is not affiliated with Danielle Roberts or Boomer Benefits.