Transcript:

Intro (00:01):

Do you struggle with what it means to be successful in your retirement? Trust us. You're not alone. Welcome to the Retirement Success in Maine podcast. Here, you'll go in depth with GuidancePoint advisors, investment consultants to hear stories about how retirees in Maine are navigating a successful retirement. Get insight into the inevitable challenges of aging and define what a successful retirement looks like.

Ben Smith (00:26):

Welcome everyone to the Retirement Success in Maine podcast. My name's Ben Smith and joining me as always is the peanut butter to my retirement planning jelly. The guy who makes this podcast sandwich complete, my cohost, Curtis Worcester. How you doing today, Curtis?

Curtis Worcester (00:41):

I'm doing well, Ben. I'm doing well. Happy to be back. A good PB&J certainly sounds good right now, actually.

Ben Smith (00:48):

Yeah. Yeah. You can't go wrong with classic PB&J. Maybe add a little flop sometimes, but it's a Mainer thing, I think, a little bit. But of course, speaking of retirement and sandwiches, of course, we're going to talk a little bit about something we haven't spent much time on lately is Medicare. And Medicare, of course, been a long, a core benefit for retirees, but just like everything else, it does evolve. The last time we did a Medicare episode was way back in episode 65 in 2021. So we've gone aways without talking about this topic, which I know gets brought up in every one of our client meetings and I think is top of mind for many of us out there as we're either we're approaching Medicare for the first time or every year enrollment time where we're really thinking through what plan maybe works the best for us.

Curtis Worcester (01:39):

Yeah, you're exactly right, Ben. And a lot has changed since then. I know 2021 doesn't feel like that long ago, but here we are in 2026. And we know some of our listeners probably listened to that episode, but there's probably a lot out there who joined us after that episode and maybe haven't heard it. But like you said, it's changing, it's evolving, so always good to just kind of revisit for that updated guidance.

Ben Smith (02:02):

Yeah. So in today's show, we are revisiting Medicare, but with now a 2026 and maybe even a 2027 lens. So what has changed? What hasn't? And what do Maine retirees need to know about Advantage plans switching back to original Medicare or dealing with fewer insurer options?

Curtis Worcester (02:20):

Yeah. And I think as all of our listeners know, Ben and I, we don't claim to be the experts to everything here. So we certainly want to bring in an expert on the topic and to help us through that today as somebody who is actually on the front lines of helping Mainers navigate these benefits every single day. Our guest today is the Medicare supervisor at the Eastern Area Agency on Aging, right here in Brewer, Maine. So she spent most of her career in educational publishing, but became interested in Medicare when she confronted some of those challenges head on while assisting her mother. So in 2021, our guest completed training and certification through the State Health Insurance Assistance Program, also known as SHIP, enabling her to become a Medicare counselor. So our guest joined Eastern Area Agency on Aging as a SHIP counselor, providing Medicare 101 classes for those new to Medicare and meeting with individual consumers to help them understand and assess their Medicare options.

(03:21):

Also in this role, she helps Medicare enrollees report instances of fraud, appeal coverage denials, and even file complaints. So again, she leads the Medicare program at Eastern Area Agency on Aging, which includes coordinating the agency's dedicated ship volunteers who donate time each week to help consumers in Penobscot, Piscataquis, Hancock, and Washington Counties with their Medicare needs. So with that little background there, so everybody, please join me in welcoming Ann Shea to the Retirement Success in Maine podcast. Ann, thank you so much for coming on our show today.

Ann Shea (03:59):

Very happy to be here.

Ben Smith (04:01):

Well, Ann, I know obviously from lots of things we want to get into today, and I know we have lots of burning questions for you, but love to just start with a little bit about your background. I know we had the read in terms of the bio, just get a little sense of what your passion is for Medicare, but also maybe a little introduction on Eastern Area Agency on Aging for those that maybe are unaware what the agency does and how you help people.

Ann Shea (04:29):

So we call it EAA, Eastern Area Agency on Aging, and it is one of hundreds of area agencies on aging around the country. Some have different names, some have area agency on aging and in their name, others do not. And in Maine, there are five area agencies on aging that serve different regions. And as the bio said, Eastern handles works with consumers in the four county area of Penobscot, Piscataquist, Hancock, and Washington Counties. And what these agencies are intended to do, and I should say they exist because of the Older Americans Act, and they exist to provide or resources or connect people to resources that will help them to stay in their communities as they age. So for Eastern Area, that's a wide variety of programs in addition to Medicare counseling. We run a nutrition program that includes Meals on Wheels, a federal program called the Commodity Supplemental Food Program, which comes through the Department of Agriculture, and then an entirely volunteer-based program called Furry Friends, which one of our Meals on Wheels to delivery folks noticed that the recipient of the meals was sharing their meals with their pet because they couldn't afford dog food.

(05:43):

So Fury Friends exists as a way to provide a monthly supply of dog or cat food to people in our community. We have a family caregiver program which provides training to people who are caring for a loved one, and that could be a parent, a child, a spouse, a sibling, it doesn't matter, also support groups and connecting people to respite care so the caregiver can get a little break from time to time. We have a veteran-directed care program, which helps veterans who have got a complicated situation, medical situation with the VA and helps them navigate that. And a MoneyMinders program for folks who are having a little bit of a hard time managing their finances, paying their bills, balancing their checkbook at a very basic level. And so there are folks who will do that. We offer community cafes throughout our region, an opportunity for people to come together and share a meal.

(06:33):

Also, opportunities for socialization. So in some places people pay Mahjong or Canasta or we have knitting circles, book groups, whatever people in those communities like to do. We also offer balance and wellness classes, including the Arthritis Foundation class, which are very popular with consumers. So those are the things we offer directly, but we also have a resource center to connect people to things that we do not do. So we get calls from consumers, "How do I build a ramp on my house?" Or, "How do I pay for a ramp on my house?" Or, "How do I find out about senior housing? How do I find out about and connect to people who can provide in- home care? How do I get a living will made?" All sorts of different questions, people come to us and we can connect them to places that will do those things for them.

Curtis Worcester (07:24):

Yeah. Excellent. No, that's so fantastic, Ann. I appreciate you sharing that. I know Ben and I, we know the great work and resources that you all offer, but it's helpful to explain that and hear that for the listeners. And I know you just kind of covered, and I like the acronym EAA, that's easier than messing up all the words here. So I know you just talked about EAAA and kind of everything on a broad spectrum there. And I know today we're here to talk about Medicare and I talked a little bit about your journey and the intro and your experience assisting your mother going through Medicare, and that's when you got the interest in it. I guess leading through that and into your role today, and just want to ask, what do you find most rewarding about helping Mainers in this case or just people in general navigate the Medicare maze, if you will?

Ann Shea (08:14):

I guess what I'd say I find most rewarding is the relief on consumers' faces when they either finally understand what their options are, when they figure out how they can pay for it or how they might be able to get help to afford Medicare because it is not free. And just tremendous relief. I worked, as I said, in publishing for many years and other jobs in my life, I have never had more hugs at the end of a meeting with people than I've had since I've been working with Medicare. People are just so grateful because the federal government does not do a great job at preparing people for Medicare, explaining to them how it works. So we're one of the few places, the area agencies on aging or one of the few places somebody can go to talk to somebody who isn't trying to sell them something.

(09:01):

We have no skin in this game. We take no money from insurance companies or drug companies or anywhere else. Our funding comes from the federal government, the state, and through grants. So we really are there just to give them the information and help them understand what their options are. And I think there's a lot of ... Consumers take a lot of comfort from that.

Curtis Worcester (09:21):

Yeah, absolutely. And I'm glad you pointed that out because that's really important for people to know.

Ann Shea (09:26):

And I'm going to say just a little bit more, what consumers don't realize is that you can sign up for different coverage through different venues or avenues, but they don't realize that if they're dealing with, for instance, an insurance agent, and I don't mean to disparage insurance agents, there are really great ones out there, but they get paid different commissions based on what they sign people up for and significantly different. So consumers may not realize that can influence what an agent might be presenting to them.

Ben Smith (09:59):

Absolutely.

(09:59):

And thanks for highlighting that, Ann, because I think that also happens in the financial services industry as well from advice perspective is understanding what the advice is. And I think following the money sometimes is where you can get the view of where the conflicts of interest might lie because again, it's always important whenever we're talking to anybody is where are the conflicts of interest. And if you're getting compensated to do one thing more than another, you're more likely to have a conflict. So I think those are really important things I think for anybody out there that is considering, whether it be Medicare or financial services, legal advice, anything out there that you kind of understand how people are compensated and what they're pushing you towards. So appreciate you highlighting that. Just another personal question for you, Ann, about obviously in terms of your years in this role, just love to hear what you've seen as an ARC that has maybe changed over the time in terms of Medicare or what people maybe misunderstand or struggle with over this timeframe.

(11:00):

What are the stumbling blocks that you've seen as you've helped people and maybe what's changed there?

Ann Shea (11:07):

I think the stumbling blocks are consumers not understanding the requirements. As of 2006, Congress requires people to have drug plans. Whether you take any medications or not, you are required to have one. You have to actively sign up for your Medicare unless you're already receiving retirement benefits from Social Security or railroad retirement. A lot of people have no idea. They don't know how to do it. Once they're in Medicare, they don't know what they are allowed to do each year, that they are allowed to make changes. They're not set in any one program. They can switch that around. I think another issue is that people hear from a friend or a family member, "Well, this plan works great for me.

(11:47):

" That's not something that works well under Medicare because it's so customized to what your particular situation, your health situation is. What medications do you take? Where are the doctors you need to see? All of that comes into you're really needing to make a very individualized assessment on what you should be doing. And so I think those are places where people can hit bumps in the road. In terms of changes, Medicare Advantage, which started in, I guess Congress created that in 96, has been growing. It now enrolls more than half of people who enter Medicare. And I think the challenge there is there's so much advertising and the consumers are constantly saying, "Is this calling us? Is this real?" Or somebody called me on the phone and they said, "This would be great." And it's just navigating that environment. Medicare Advantage is great. Original Medicare is great.

(12:45):

It just depends upon your situation as to what's going to make most sense for you. And so I guess that's a change. There's just more growth in that area. And so on consumer's part, it's a little more confusion.

Curtis Worcester (12:57):

Sure. Makes a lot of sense there. So I appreciate that little background on you and your role. I know today we really want to get into Medicare and specifically Medicare in 2026 and beyond and changes and new rules and programs and all of that. So I guess I'll just start with a foundational question in terms of the big picture. What has changed about Medicare in 2026 and forward in terms of new rules, new programs, new deadlines, new costs, just anything there that people should be aware of in terms of fundamental new updates, if you will?

Ann Shea (13:36):

Looking at Part A and B, most of us have already paid our premium for Part A. As long as you've worked for 40 quarters or the equivalent of 10 years, either you or your spouse for that matter, you have already paid your premium for Part A, so you don't get affected that way by an increase in the premium. It's only if you're paying in, and that's a very small proportion of people, but that premium has increased. There was historically a more significant increase in the Part B premium this year, so it went from 185 to 202.90, so that's another piece. The coverage under Part A and B remains the same. There really haven't been much changes in terms of what is covered and what is not. Under drug coverage, there have been a lot of changes. There are other things still going into effect from an Act that I think it was called the Inflation Reduction Act that was passed in 2022.

(14:30):

That started a lot of changes that have been slowly implemented over the years. And so we're seeing people have the ability to create a payment plan if they are in a situation where they're meeting their deductible and they take a very expensive drug and they get hit upfront with all the costs they're going to have in a year, they can spread that out over the year.

(14:55):

In Maine, there are fewer Part D plans that are available this year than previous years. A lot of the plans are now using the generic medications people take. They're requiring that those be part of meeting the annual deductible on a drug plan. Previously, that was not necessarily the case. We're seeing increases in premiums for the drug plans and the Medicare Advantage plans. Before, there were many more options that were either zero or lower cost, more cost sharing under Medicare Advantage than we've seen in sometimes in the past. Let's see what else. There's a lot of upheaval this year and a lot of attention was given to the fact that there was a lot of change in Maine about Medicare Advantage. And yes, I want to say there were many plans that were discontinued, but what folks don't realize is there were a lot of plans that were created to create them.

(15:51):

They were replaced by other things. So in fact, there has not been a significant drop in the number of Medicare Advantage plans available in the state in 2026. What some people don't realize is the plans by the nature of Medicare Advantage are based geographically. So a plan that might be available to somebody down in York County is not going to be available to somebody up at Penobscot County because it's all based on networks of providers. That created a lot of concern and upheaval for a lot of folks this year. As you know, I'm sure you know there was some communication that perhaps wasn't as clear as it could have been from some of the insurance companies about what was happening. So it was a challenging start to the year.

Ben Smith (16:32):

Gotcha. Yeah. And I do want to keep going on some foundational pieces here. And I know we've talked to A, B and C and D. And so I know obviously we've done a show where we've kind of gone through some of the basics, but it might be good also to take a moment and just do a little quick refresher on what is the difference between part A, B, C, D, and maybe what Medigap is. So we just kind of have some language that we're all working from the same place on. Do you mind just walking us through those?

Ann Shea (17:04):

Absolutely. So Medicare started with Part A and B and back in the '60s, and people can think of Part A as anything that happens on an inpatient basis, hospitalizations, skilled nursing facility admissions, and hospice care, for instance. That all falls under the category of Part A. And as I referenced earlier, if somebody either themselves or their spouse has worked the 40 quarters, you have already paid your premium for Part A. If you have not, you can pay into and get Part A, you're not excluded from it, but it is costly. So we really encourage people, if they're close to meeting the 40-quarter obligation and they are able to continue working, that they do that to get there because it will save an enormous amount of money over the long run. Part B is anything that happens on an outpatient basis. And there you're talking about doctor office visits, lab tests, x-rays, CAT scans, durable medical equipment.

(18:02):

And under that, we all have to pay our Part B premium, and that is the $202.90 a month. Medicare Part A and B, because Part B for instance, covers 80% of the cost of your care, your outpatient care, there's 20% remaining that is the responsibility of the consumer. Under Medicare Part A, if you are in the hospital longer than 60 days, you have significant daily copays. And because of those two factors, that is why people consider supplemental insurance coverage.

Intro / Outro (18:33):

Gotcha.

Ann Shea (18:34):

And I'm just going to go right into there. And here we're again, we're talking about original Medicare.

(18:39):

You referenced Medigaps, also called Medicare Supplement Insurance. These are insurance plans that are intended to work hand in hand with your medical coverage under Medicare Part A and B. As long as you are seeing a Medicare provider or using a Medicare facility, just like Medicare A and B, the Medigap plans will cover those gaps anywhere you are in the United States. You can see any Medicare provider wherever you are. I used to be able to make a blanket statement that says no prior authorizations required, but this is one of the changes in the ... Earlier this spring, the Department of Health and Human Services or the Center for Medicare Services announced that they're doing a pilot program in five or six states to see about the use of AI in doing some prior authorization review

(19:30):

On specific kinds of very high cost or those that are suspected to be the services that are expected to be abused. That does not affect anyone who lives in Maine, and that study's going to go on for five years. So it'll be a while before we hear what they decide. But as a general rule, no prior authorizations are required. It works much more under the traditional fee-for-service model. You go to your doctor, your doctor says you need to see the specialist, you go to the specialist, they do tests, you get them, maybe you need a procedure, you have that done. The Medicare's requirement for approval is that whatever's being done meets standards of medical practice, and that's really what it's going to come down to. And any Medicare provider knows what those rules are. And what it really means is that Medicare will not pay for experimental treatments, anything that's not considered an evaluated and verified use of something, either a diagnostic tool or a treatment or a procedure.

Intro / Outro (20:29):

Gotcha.

Ann Shea (20:30):

The last bit that falls under Part A is Part D, prescription drug plans. These are plans also offered by private insurance companies, but they are vetted by Medicare. There's no Part D plan available for you to enroll in that has not been vetted by Medicare. And I think what's most important for consumers to keep in mind is there is no one Part D plan that is going to cover every prescription medication available on the market, which is why if you take any medications at all, you search for plans based on the medications you take. If you take no medications, you pick the plan with the lowest monthly premium. And this year in the state of Maine, there are at least three plans and possibly a fourth, I'm trying to remember for sure, that have a zero premium. They will not cost you anything to be enrolled, but by enrolling, you will satisfy the requirement that you have prescription drug coverage.

(21:26):

So again, original Medicare, you have Part A, Part B, a Medigap, which is optional. Some people choose not to get it, and a Part D plan.

Ben Smith (21:36):

And Amy, real quick too on that. So say I'm a first time enrollee here and I go, "Hey, I don't have prescription drugs, so I've chosen the zero cost Part D plan, but I got sick in October, so I got sick and now I have a whole new range of prescription drugs." Well, it seemed to me that there's an enrollment process that's happening here. So then in the fourth quarter of this year, and I have this new prescription drugs, I'm now searching for a new Part D plan that maybe satisfies my new range of prescriptions that I've been assigned.

Ann Shea (22:14):

Yes. Is that true?

Ben Smith (22:14):

Yep.

Ann Shea (22:15):

Yes, you can do that, but there is only the window of time you can do that is during the fall open enrollment period. And if you make a change during that time, the change takes effect the first of the year because these plans sort of run on a year cycle, if you will. If it happens earlier in the year, this is where you really want to be nice to the people in your doctor's office because they would be going to be the ones who are going to help you get what's called a prior authorization so you can get coverage for that medication until you can get to the point in the year where you can change your plan.

Curtis Worcester (22:45):

Got it. Gotcha. Awesome.

Ann Shea (22:47):

And they are all too familiar with that process.

Curtis Worcester (22:49):

I'm sure. I'm sure. I want to keep going, I guess, on this thread here of changes. So something we kind of see or hear a lot, I guess, from clients and just people we talk to is maybe somebody's currently enrolled in a Medicare Advantage plan and then they maybe want to switch back to an original Medicare. So can you just talk about that process? How difficult is it and what should they really be prepared for to do that?

Ann Shea (23:17):

Yeah, absolutely. But I think it might be useful if I just explained Medicare Advantage first. Yeah,

Curtis Worcester (23:23):

Sorry. Sorry. Yeah.

Ann Shea (23:24):

Yeah, totally. Totally. So Medicare Advantage is known as Part C, and it was created in 96 by Congress to see if private insurance companies rather than the Federal Center for Medicare Services could control Medicare costs better.

(23:39):

And as I said, more than half of people going into Medicare enroll in Medicare Advantage plans now. The way it works is they are required to cover all the same things that original Medicare covers in terms of medical coverage. However, they get to set the rules about how you get those services and they make wide use of things like prior authorizations. They all rely on networks of providers and you're going to get your best coverage if you are in network, depending upon the kind of plan you are in. The only way you're going to get coverage is if you see somebody in network, there's a different category of plan called a PPO preferred provider organization where there's a mechanism to go out of network and at least get some coverage. The plans, as I said, are geographically based, which means you're really looking at seeing providers in the area where you live.

(24:33):

You're not going to be able to get into a plan that covers you necessarily down south. And I'm from Northern Maine, so that's what I mean by down south. No disparagement plan. So you are still in Medicare Part A and B, you have to have them in fact before you can enroll in any Medicare Advantage plan, but essentially whatever company you enroll in, whatever plan you enroll in, they are taking over the delivery of your Medicare covered services.

Intro / Outro (25:01):

Got it.

Ann Shea (25:02):

A lot of people are familiar with them because they offer extra benefits and the big three are vision, dental, and hearing. Now, not all of them offer all three of those or some of those. And then the nature of them varies from plan to plan, which makes it a little hard to compare. You can't really compare apples to apples.

Curtis Worcester (25:21):

Gotcha.

Ann Shea (25:22):

They also offer things like over-the-counter drug benefits or money for membership in a gym, different kinds of things. So for consumers who are looking at them, they just really need to understand how those extra benefits work. If that's what's attracting them to a Medicare Advantage plan, you need to understand how the benefits work, how do you access them, what are the rules about them before you go forward. The other thing is you need to talk to your medical provider's offices. Don't talk to your medical provider themselves. They will not know. Talk to who handles insurance in the office and find out what Medicare Advantage Plan Networks is my doctor in, because you do not want to enroll in a plan and then find out all of a sudden you have to get a new provider. Sure. And if you're interested in dental benefits, talk to your dentist's office as well.

(26:10):

So there are a lot of moving parts. There are more benefits that are offered than under original Medicare, but there's a lot more due diligence that's required on the part of the consumer.

Curtis Worcester (26:21):

Got it. Got it. Okay.

Ann Shea (26:23):

So that's sort of Medicare advantage. No, that's

Curtis Worcester (26:26):

Super helpful. And again, now I can just kind of ... And again, apologies for jumping the gun on my question there. So let's say I have enrolled, I've done the due diligence, I've picked a Medicare Advantage plan, I'm enrolled in it, now I want to switch back or remove it, however, whatever the proper nomenclature is there. So switching back to original Medicare, how difficult is that? What should I look out for? What should I be prepared to do?

Ann Shea (26:49):

It's not difficult at all, actually. You have a window of time every year from January 1st to March 31st, the window we're in right now where if you are in Medicare Advantage and would like to go back to original Medicare, or maybe you started out in Medicare Advantage and never were in original Medicare, this is the window of time you do it. And it's as simple as enrolling in a prescription drug plan, which will then disenroll you from a Medicare Advantage plan.

Intro / Outro (27:18):

Gotcha.

Ann Shea (27:19):

Any change you make during this window of time takes effect the first of the following month. So the, I don't want to call it a rub, but the caveat to all of this is, do you want to go back to original Medicare and get a Medigap plan to go along with it? And that is where a time constraint comes in.

Curtis Worcester (27:36):

Gotcha.

Ann Shea (27:37):

In the state of Maine, you can try out Medicare Advantage for up to three calendar years. And if you decide you would like to go to original Medicare and get a Medigap, you are guaranteed to be able to pick any Medigap plan you want at the community-based pricing rates that the state, which is how the state structures it. I'll just say that every state does it differently about how they do this. I will also let you know that Maine is far more generous in giving you that three-year window to try out Medicare Advantage. In most states, you only get one year.

Intro / Outro (28:10):

Got it.

Ann Shea (28:12):

So if you want to be guaranteed to be able to pick the Medigap of your plan of your choosing and not have to go through medical underwriting and perhaps have your rates differ because of that, you have to do it within three calendar years. That said, if you exceed that time limit, it doesn't mean you can't get a Medigap plan, but it's going to really depend on what your health status is. Sure.

(28:35):

If you have a very complicated medical situation and use a lot of healthcare, you're going to find yourself in a situation where you may not be able to do that. But I've had consumers, I remember working with a woman who, I think she was about 79, and she had only ever had Part A and B. She didn't even have Medicare Advantage. She had only ever had Part A and B, and she was in very good health. And she said, "I'm thinking I'm getting older. I might need more healthcare. Can I get a Medigap?" Well, she did. She picked the plan she want, and because her health was good, she wasn't paying more for it. So a lot of people think, "Well, maybe I'll defer getting a Medigap till I really need that coverage." But then that usually means you're a lot sicker and that's where you're going to run into problems.

Ben Smith (29:19):

Yep,

Curtis Worcester (29:19):

That makes

Ben Smith (29:20):

Sense. So in that case, so if I've signed up for that Medigap plan, and again, I got the community rate pricing, is that changing every year where, so if all of a sudden every year I re-enroll into it and now there is a health-based component to it where it is measuring, or I signed up my first time, I was fine, and as long as I was in this window, it was the first time and then I'm fine forever or is it, "Hey, now I've signed up and next year I'm sick and now it's a different rate because of this. "

Ann Shea (29:51):

The state of Maine and all of, I should say, all of the Medigap plans are not administered by, but are regulated by the Main Bureau of Insurance. They oversee all of that. In Maine, if you are in a Medigap, you can't lose it. As long as you pay your premium, you're good to go. There are increases that the plans will submit to the Department of Insurance every year saying, "Okay, we're going to charge this amount for this Medigap and that amount for that Medigap." And those can change every year. We didn't see much change until the last few years, and now we're seeing more significant increases in the cost of the premiums. What a consumer needs to know is that if you are enrolled in a particular plan and say you enrolled in it because with the type of plan you wanted and it was the lowest premium, you can switch it to a different company offering exactly the same plan at a lower premium.

(30:46):

You're allowed to change your plan or move to a different plan once every 12 months. The premiums are all publicly published. This is what the company says, this is what we're charging for this plan. And so therefore it's all public record and you can be guaranteed that this is what I'm going to be paying for my plan. Got it. Some of the plans, you'll give you a little bit of discount if you pay a premium for the whole year. Others of them will give household discounts of five or 7%. So if there are two people in a household who are enrolled in the Medigap with this company, they can get a discount off the premium. But your health status as you're using the healthcare is not going to matter.

Ben Smith (31:28):

Gotcha. Okay. So I want to keep going on the Medicare Advantage piece for a moment or two. So of course we're hearing from some of our clients, relatives, friends, family, all that, that there are fewer Medicare Advantage plans. So again, I know asterisk there based on what you said is depending on what county, depending on what's happening and their specific geography that could be true or not true, can you explain maybe why that's changing in particular places in the state of Maine and what's impact that's having on those evaluating or currently enrolled in Advantage plans?

Ann Shea (32:06):

Why it's happening is speculation on my part. So let's make that clear. I think part of it has to do with in previous years that there were many more extra benefits that were being offered

(32:17):

And people were taking advantage of them and companies saw that that was perhaps costing them more money. And the reason I'm thinking this is because the plans that are available now have many fewer of these extra benefits or the benefits that are there are of far less value. So I think that's part of the realignment or whatever was happening behind the scenes. I think it also has to do with availability of providers. Northern Maine is particularly affected by this, many fewer providers available than in Southern Maine. And I think that also played a role in what was going on. I think ultimately as economics that are at play is my opinion on why there was so much change this year.

Curtis Worcester (33:02):

Sure.

Intro / Outro (33:02):

Gotcha.

Curtis Worcester (33:02):

Sure. So continuing on here, I think of course the whole conversation is a through threat here, but cost-related considerations is something that I think is pretty important for everybody in today's world, but specifically retirees, Medicare. What are some cost-related considerations that people should be thinking about? You're right. We think of in terms of inflation and rising prescription costs and premiums changing. Just what are your thoughts there on what people should be doing or thinking about that can kind of help anywhere it can?

Ann Shea (33:34):

I would say as consumers evaluate their options, the first piece of information they need to have is, how much healthcare do I use?

Intro / Outro (33:43):

Yeah.

Ann Shea (33:44):

Because that will have a big impact on your thinking about which way you should go. If you use a lot of healthcare and you say you're undergoing chemotherapy for treatment or you are under dialysis or you have any kind of condition where you're getting a lot of expensive tests regularly, you're seeing a lot of medical providers regularly. Know that in Medicare Advantage, you're going to be paying copays and co-insurances as you use that care, essentially for anything other than primary care.

Intro / Outro (34:14):

Got

Ann Shea (34:14):

It. And that every Medicare Advantage plans has an annual out- of-pocket maximum. So there's a limit to how much you will be on the hook for in a calendar year, but do the math. How much of those copays and co-insurances are you going to be paying and what is that going to look like for you? Because if you're looking at this as in a totally financial economic framework, it could actually be less expensive for you to be an original Medicare and pay an annual premium on a Medigap than it is to be in Medicare Advantage if you are using a lot of healthcare. If you are really healthy or relatively healthy, your upfront costs are going to be probably less expensive in Medicare Advantage because you're not going to be a big utilizer of healthcare. You're not going to have those copays and co-insurances. But if you are, then do the math to see how that works out.

Intro / Outro (35:10):

Sure.

Ann Shea (35:11):

In terms of drug coverage and the costs, I'm going to go back to that legislation that was passed in 2022.

(35:17):

It got rid of what was called the donut hole. And I don't know if you are both familiar with that or your listeners are, but it was a system whereby once a certain amount of money was spent on prescription medications, both by the consumer and the insurance company, you would go into this place called the Donut Hole where the consumer's costs would be much higher until they reached an out- of-pocket cost of, I think it was $8,900 for the calendar year. And then after that, you would be in what was called your catastrophic phase where you would pay nothing in copays for the rest of the year. The legislation from 2022 changed all of that. Now some plans have a deductible, some do not, but there's that deductible period if your plan has one. There's the period of coverage, and then you go to what's called right to the catastrophic phase.

(36:13):

And there's an out- of-pocket limit that's set for everybody, doesn't matter who you are, of $2,100 in the calendar year. So in 2026, if your out- of-pocket costs hit $2,100 for the remainder of the year, you will have no copays. Now, I'm not saying $2,100 is not a significant amount of money, but it's a huge change from what was there before.

(36:37):

So I guess you could say there's a little bit more financial protection for consumers with the change, and it's a known quantity. You know how much it is that you're going to be at risk for in any given year. Now, that number is not static. Last year it was $2,000 cap. This year it's $2,100. We'll see where it goes next year.

Curtis Worcester (36:57):

Sure.

Ann Shea (36:58):

But those are some of the pieces that you want to think about.

Curtis Worcester (37:03):

Yeah,

Ann Shea (37:03):

Absolutely. And also the other pieces, if you're in original Medicare or looking at that at Medigaps, there are very specifically defined kinds of plans. And unfortunately it involves more letters, which only adds to confusion. But what I'd like consumers to know is that if you are looking at a plan A, a plan A is a plan A, is a plan A. It makes no difference what company you're getting it from. You get nothing more. If you pay more, you get nothing less if you pay less. If you get a plan G, it's all identical coverage as long as you're looking at the same type of plan. So it's a rare opportunity where consumers really can shop solely based on price and compare Apple staples. Yeah.

Ben Smith (37:43):

No,

Curtis Worcester (37:43):

That's all pointed

Ann Shea (37:44):

Out. Yeah.

Ben Smith (37:46):

And I know there's a piece here in terms of income-based premiums, and this issue has come up with us with our clients, and there's an acronym of IRMA. Yes, indeed. IRMAA. So where higher income retirees can face larger premiums. So if a retiree takes a large distribution from a retirement account, especially one year, can you just talk about how does that impact Medicare costs in IRMA and what planning strategies they might be able to think about that can help minimize surprises there, if any? Yep.

Ann Shea (38:22):

So IRMA stands for income-related monthly adjustment amount, just so you know. And one thing I think it's important that people understand is people at higher income levels and those numbers are clearly published and they're different whether you're unmarried or you're married, essentially means that you are getting less of a subsidy from the federal government because the Part B premium is not that of $202.90 that most people pay is not the true cost of Part B. And the higher your income goes, the less of a subsidy you get. And that's what the IRMA is about. What I think

(39:01):

Folks that you work with should consider is be aware of where those lines are, what are the triggers for the premiums? And the increases, I should say, because there are different thresholds. And if you are aware of them and you can see, okay, if I do this, then my income for the year is going to go up to that and I'm going to cross that threshold. I'm going to go into a different band, if you will. And so what's considered or triggers that is income, and it can be earned income, it can be distributions from retirement accounts, it could be interests or capital gains that are realized. All of that goes into that picture. And so it's really just working the numbers. If you really want to stay out of going up to the next band, you got to do the numbers. And those numbers change every year.

(39:55):

This year they start at people, if somebody's unmarried and they have income between more than $109,000 up to 137,000, or if they're married and then it is from above 218,000 to $274,000, that's the first band. The last band is anything greater than or equal to $500,000 a year. And then there's different steps between those two bands. So it's really just being aware of what that's going to look like. For those that don't know, Social Security automatically reviews this every two years. So for a lot of folks, they're perhaps at their highest income earning when they get into Medicare, but then their income's going to drop. There's an automatic process on Social Security's part where they're going to review that every two years. So they're going to see your income has dropped and your premium will drop if you fall into a different band or below that threshold at all.

Ben Smith (40:53):

Right. I don't

Ann Shea (40:54):

Know. Did that answer your question?

Ben Smith (40:56):

It does. Yeah. And I guess what I wanted to say too is obviously there's, and you can encapsulate what IRMA is and how it's looking at lots of different ways of receiving income. And a lot of times I think just from our role, it's just unavoidable, is that there could be something like, I like working part-time. It keeps me busy. It keeps me able to stay active and social and especially in the Northeast. It's sometimes tough to stay social. So there's ways like, yeah, but I do want to make a little bit of money if I'm going to be doing a certain job. So it is going to mean that I have maybe an IRMA premium that is increased because I got some more income as I have required minimum distributions from my IRA or all those things. And you go, I think you've got to look at it holistically and kind of look at this and not just say, "Hey, I'm doing whatever I cannot to just have, again, government subsidies pay for my part B, so I'm just going to take as much or less as income as I possibly can.

(41:57):

" It's like you got to look at all of that together and try to think about that, which is, again, what we try to do for our clients as well. And again, make a good financial decision, but make a good life decision I think is more important there. And I think that's just IRMA is, I think, on the table to be just considered, but maybe not to have that tail wag the dog, so to speak.

Ann Shea (42:17):

And I would also put out there that if somebody is perhaps not subject to the IRMA or maybe in one band and doesn't want to go up to another in a totally self-interested way, I'm going to throw out there that there's volunteering as a way to stay socially connected. Our agency, there are over 400 people who volunteer with us and help us deliver our services, including as ship counselors, believe it or not. And so if you want to stay active and engaged, just keep that in mind. That's another way to do it, to meet that need without changing your income. And it's a totally different question if you need the income, that's a different conversation.

Curtis Worcester (42:57):

Yeah.

(42:58):

No, I think there's a common through thread here of due diligence, looking at the numbers. I think the good part about the IRMA piece is it's all, as you said, public. You can look it up, you can plan for it and all the information's there. So hopefully there's not surprises, it's just planning so you know what's there. I want to change directions a little bit. So just in our world, and we see this with our clients and their financial planning, and then we have estate planning and the theme of reassessing things and making sure what we're doing is still appropriate. So in your world, how do you advise people to reassess or update their Medicare coverage as they age? I know we talked about it a little bit ago in terms of their certain windows, but are there kind of common triggers for people where you're like, okay, you're this age, let's make sure ... I know you mentioned you worked with a lady who, as she was getting older, even though she was healthy, she wanted to add it, so it was there.

(43:56):

Health changes or we move. I know different states have different things going on, but is there some kind of magic scenario that prompts a review for you and what you're advising people to do?

Ann Shea (44:08):

If you move, that's a trigger, especially if you're in Medicare Advantage, because you may move to a place where your plan is no longer available, even within the state. If you start changing, say you are moving into a phase where you're snowbirding or sunburning, that's another thing. How does my coverage work in both places where I'm going to be?

Ben Smith (44:29):

Good question.

Ann Shea (44:30):

If you have a significant change in your health status and all of a sudden your medications have changed, we really encourage people annually to review their coverage because there's a lot of movement there from year to year and then formularies change and you can find yourself paying a lot more than you need to, for instance, for a plan or be in a plan, but all of a sudden your medications aren't covered. So it's a really just good practice to review that every year. We also encourage people every year or two to, if they're in a Medigap plan, look at that, look at whatever kind of plan it is and say, "All right, what are all the companies charging for this plan?" And if it's a plan that all of a sudden you may find your plan is no longer the one that's not at the lowest available premium, you're not with that plan or that company, I should say.

(45:21):

And you can switch to the company that is currently charging the lowest premium for that kind of plan. And a lot of people are surprised by this. The rules are different in other states. In other states, you may not be able to do that, but in Maine you can. So I really encourage consumers to take advantage of that.

Curtis Worcester (45:37):

Yeah, no, that's super helpful. Similar lines. I know we were just talking about moving in different locations, and I know that affects plans, but I think something certainly our listeners in the state of Maine are probably aware of, there's a lot of financial pressure on rural hospitals and rural care providers, right? Provider networks probably getting a little smaller. How do you advise Medicare beneficiaries to think about, I guess, access to care and not just price of care, right? I know sometimes they can't break apart, but if it's something we can think about, just what are you seeing there? And of course, the healthcare environment in the state of Maine, as we said, there's a little pressure on it right now.

Ann Shea (46:19):

There really is. And it's a long-term problem. It's not going to get solved quickly. So for consumers, what I would say is, it all goes back to what is your situation? Where are the providers you need to see or where you know you're going to be able to get in to see providers? Or do you go down to Portland for care? Do you go to Boston for care? Do you go to the doctor once a year and primary care and nothing more? All of that influences how you think about or should be taken into consideration when you think about what you should do. It really is so individualized. We can't do anything about the healthcare situation or access to care here in Maine, but we can think about what are we going to need and how do I maximize my opportunity to be able to get that?

Curtis Worcester (47:09):

Yeah, I like that.

Ben Smith (47:10):

Yeah. And I think you just said it, Ann, is I'm just thinking about a fine living in Dover Foxcroft and maybe there's less providers there. And now I'm having to travel to Bangor now to go see my PCP because there's less PCPs in Dover Foxcroft there. And I think what you're saying is continue to just reassess your network, your plans, what's covered, where things are, because it's just as your providers are changing, as your coverage is changing, you just need to be keeping in alignment, I think your medical coverage to maybe what the provider's access is, their services are, what you're using of those services, right? Would you agree with that statement?

Ann Shea (47:58):

I would definitely agree with that. And I think if you are in original Medicare, it's not going to matter where you go for a provider. As long as you're saying a Medicare provider, which is the vast majority of providers in the state of Maine, and I'm fairly certain every single hospital, that's not so much of an issue. It's if you're in Medicare Advantage, that's where those networks change a lot and can change from year to year. And so that's where you just need to double check, is my provider still in network or all of a sudden are the only providers who are going to be in network, say in Bangor, for instance, Bangor Brewer, or is my provider in Portland, can I still access them? Those are the pieces you really need to stay on top of.

Ben Smith (48:38):

Yeah. Awesome. Okay. So want to ask another question, just kind of first time enrollees here. So I'm turning 65 maybe within the next year. And what would be your best advice for someone that says, "All right, I don't know what I'm doing. I don't know where I'm going. I want to make the best choice available here, not make mistakes right out the gate." What would you advise them to do to approach Medicare confidently and avoid being overwhelmed by this whole process? Because I know we just spent a lot of time talking through all this, but if someone can- And

Ann Shea (49:09):

This is where your listeners or eyes are doing the equivalent of glazes. Yeah,

Ben Smith (49:13):

Exactly.

Curtis Worcester (49:14):

Exactly.

Ben Smith (49:15):

It sounds like a lot, Ann. Come on. So if I want help, what do I do? Where do I go?

Ann Shea (49:22):

Number one, don't wait till the month before you want your Medicare to start. Start doing your research six months beforehand.

(49:29):

Number two, contact your local AAA, your local Area Agency on Aging in Southern Maine Area Agency on Aging, Spectrum Generations here in Maine, Seniors Plus, Roostick. I mean, contact them and find out about their Medicare 101 classes and go to a class. It's an overview. It says, this is the structure and these are your options in the big picture terms, and then make a ship appointment for one-on-one consultation about the particulars of your situation because that's how you educate yourself and you can do it in the big picture first and let that sit a little bit and then come about the particulars of your situation. And that's what I would recommend is just do it that way because if you are talking to somebody who enrolls people, they have skin in the game. And I'm not saying there aren't excellent, excellent people like that, but you just need to be aware of that and we just don't have any skin in the game.

Curtis Worcester (50:26):

Yep,

Ben Smith (50:27):

Agreed.

Curtis Worcester (50:28):

I appreciate you bringing that up again. I know we opened with a similar dialogue there, but it is really important for people to know and understand and to think about when they're doing this.

Ann Shea (50:36):

If I can, one other thing just in this process, for a lot of consumers have no idea, you sign up through for Medicare through the Social Security Administration. If you are already receiving Social Security or railroad retirement benefits, for at least three months before you turn 65, your enrollment's going to be automatic. You're going to get a package in the mail for Medicare Part A and B. If not, you have to actively sign up and you can do it online versus via the Social Security website. You can do it through your local Social Security office over the phone. That is still a possibility. Do not under any circumstances call the National Social Security office. The staffing cuts have been so severe. I mean, there've been cuts at our local offices too, but it's not as backlogged. And when you sign up with them, you need to do that at least two months prior to you when you want your Medicare to begin because again, they've had cuts, there's backlog there for getting things in the works.

(51:35):

It goes faster if you can sign up online, but not everybody's comfortable using the internet in that way.

Curtis Worcester (51:41):

Sure. Or able to points. Or able to. Yeah. Yeah. No, I'm glad you brought that up because that's really important for people to know. So I have one final question for you, Ann. It's probably a little on topic, but it's a little bit of a pivot. So I'll pause and of course just say thank you so much for this dialogue up to this point. And it's been super helpful. I know for Ben and I, and I'm hopeful everybody tuning in as well, but we have to ask you another question. So this one's directed at you personally here. So of course the name of our show is The Retirement Success in Maine podcast. So I have to ask you a retirement success question. I ask every guest. So Ann, how are you going to find your own personal retirement success when you get to that point?

(52:27):

What does that look like for you?

Ann Shea (52:29):

I imagine it's not so different from a lot of other people. Do I have the enough resources that I can support myself? Is my health good enough that I can engage in the activities I like to do? Can I interact with my friends and family, visit them when I need to? I think that I don't have any big retirement dreams. I just would like to be able to do the things I like to do. And that's it. That's what my husband and I are working toward.

Ben Smith (52:57):

Yeah, I love it. I love it. Which another way to say this, maybe retirement freedom is that you have some freedom there to do what you want when you want to do it and you have all the potential and opportunities that would be available. So really great answer. And thank you. Thank you for coming on our show again.

Ben Smith (53:14):

I know we want to, obviously we'll give links to Eastern Area Agency and Aging and the resources that are available there and also, but I really appreciate you coming on our show and sharing your wisdom because it was really helpful, I think, for both of us, but also I know from listeners in 2026 and beyond of Medicare questions are coming up quite a bit. So I know it's a very valuable resource going forward. So thank you for that.

Ann Shea (53:37):

You're very welcome. Very happy to do it. All

Ben Smith (53:39):

Right. Well, we'll catch you next time.

Ann Shea (53:40):

Bye-bye.

Ben Smith (53:41):

So Curtis, that was a really great reminder that even though Medicare is a benefit, it's also really a big decision-making process that needs guidance and review, right?

Curtis Worcester (53:49):

Yeah. Yeah, absolutely. Absolutely.

Ben Smith (53:52):

And I know obviously we're talking with Ann a little bit offline and one of things that we wanted to make sure that it's mentioned here is obviously there's some scams that can go along with Medicare. So just keep in mind that Medicare is never going to call you. They're not going to text you. So if that happens, I think don't kind of call them back as I would go to, again, go through Social Security and kind of figure that out is get a real number out there and don't just reply. But also is that scammers really want to get a hold of your Medicare number. So it's just as valuable as your social security number. So make sure those numbers are protected here as you are kind of thinking about fraud that might happen. We will have on our show notes, Ann's going to give us all the contacts for all the area agency and aging for you to reach out to anywhere you are in the state of Maine.

(54:46):

You can find the local one to you and get guidance from folks like Ann to help you out with those Medicare decisions. We'll also have a little fraud hotline too if you think there might be something that might be happening fraudulently around Medicare for you. We give you that resource. So you can go to blog.guidancepointllc.com/120. So 120 for our 120th episode and kind of get a little bit more on the show notes from Ann and the resources that we'll put up there. But we really appreciate you all tuning in. Thanks to Ann Shea for coming on. I really appreciate you all tuning in to Retirement Success in Maine podcast and we'll catch you next time.

Outro (55:30):

Ladies and gentlemen, you've just listened to an information filled episode of the Retirement Success in Maine Podcast. While this show is about finding more ways to improve your retirement happiness, GuidancePoint Advisor's mission is to help our clients create a fulfilling retirement. We do financial planning so that people can enjoy retirement and align their monetary resources to their goals. If you're wondering about your own personal success, we invite you to reach out to us to schedule a 45-minute listening session. Our advisors will have a conversation with you about your goals, your frustrations, and your problems. Make sure you check out GuidancePoint advisors on our blog, Facebook, and LinkedIn, and you can always check out more episodes of this podcast on iTunes and Spotify. And of course, keep on finding your retirement success.