Medicare decisions can be overwhelming, and with rising costs and policy changes, making the right choice is more important than ever. In this episode, Bryan Gay, owner of Boomer Insurance Group, shares his insights from helping over 20,000 clients navigate Medicare enrollment, insurance options, and the impact of the Inflation Reduction Act. He explains why working with his team can be a game-changer and how choosing the wrong plan could cost you in the long run.

Listen in to learn about the changes in Medicare premiums, why this past enrollment period was the busiest yet, and how the Inflation Reduction Act is shaping the future of healthcare costs. Bryan also breaks down Medicare Part A, the cost of supplement plans, and what federal employees should expect regarding prescription drug prices.

Listen to the full episode here:

What you will learn:

• How Bryan’s business operates. (3:40)
• Applying for Medicare alone vs. using a broker. (8:15)
• Why choosing the right insurance broker matters. (14:00)
• Overview of Medicare options. (18:00)
• How open enrollment and premium increases are changing Medicare. (20:30)
• Will federal employees see higher medication costs? (29:20)
• The long-term impact of the Inflation Reduction Act. (41:00)
• Medicare Part A coverage and costs. (44:00)
• Current costs of Medicare supplement plans. (57:20)

Ideas worth sharing:

• “Because Medicare is individualized, what works for some people might not work for others.” – Bryan Gay
   
• “Not everyone should sign up for Medicare at age 65. There are a whole bunch of people who should not sign up for Medicare at age 65. Just because you can sign up doesn’t mean you should.” – Bryan Gay
   
• “You can be someone’s hero.” – Mason & Associates

Resources from this episode:

• Mason & Associates: LinkedIn
• Tommy Blackburn: LinkedIn
• John Mason: LinkedIn
• Bryan Gay: LinkedIn | Website
• Blue Cross Blue Shield Compare

Did you enjoy the Federal Employee Financial Planning Podcast? Never miss an episode by subscribing on Apple Podcasts, Amazon, Spotify, and YouTube Music.

Read the Transcript Below:

Congratulations for taking ownership of your financial plan by tuning into the Federal Employee Financial Planning Podcast, hosted by Mason & Associates, financial advisors with over three decades of experience serving you.

John Mason: Welcome to the Federal Employee Financial Planning podcast. I’m John Mason, President and Certified Financial Planner at Mason & Associates. And on today’s episode, we have another repeat guest, Mr. Bryan Gay from Boomer Insurance Group. And then alongside us today, we have my normal cohost, Tommy Blackburn, Certified Financial Planner, CPA, and PFS.

Guys, welcome to the Federal Employee Financial Planning podcast.

Bryan Gay: Thanks for having me. Good to be here.

Tommy Blackburn: Yeah. Good to be here. As always, Bryan. Thanks for joining us again. Actually, as we are speaking, I should have had this earlier. I was trying to see when we last had you on and it looks like, or at least we aired the episodes cause we were, I think we did three with you back in September of 2023.

So it has been a little while since we’ve had you a little over a year. So it is great to have you back and we also very much appreciate having you as a resource for our clients and even folks who aren’t clients. You do a lot of good in the community.

Bryan Gay: Well, thank you. Yep. It’s nice to be back on here too.

John Mason: Well, it’s always great to have a repeat guest on the Federal Employee Financial Planning podcast. I guess a disclaimer for our audience, we know there’s clients listening. We know there’s people who never be clients listening. Bryan Gay and Boomer Insurance Group are trusted partners of Mason & Associates.

We’re not affiliated companies. We do not share in compensation in any way, but Bryan and his team have helped several of our clients over the years, and we’ve recommended them a time or two at this firm and prior firms. So, Bryan, thank you for everything you do for our clients and for our community.

Briefly biography from Boomer Insurance Group in Richmond, Virginia, and Bryan Gay specifically. Bryan is a leader in Medicare insurance and the owner of Boomer Insurance Group. For quite some time, they’ve assisted well over 6,000 clients and helped them make decisions about Medicare and other complex topics.

Bryan takes a hands-on approach to Medicare insurance. Rather than meet with a client at an office, Bryan travels around Richmond and throughout central Virginia, visiting with people in their homes. His company has a five-star rating on Google and the Better Business Bureau due to his in-depth knowledge and personal approach.

So Bryan, I hope that biography is still pretty accurate and describes you. I think things may have changed a bit, so why don’t you share a little bit with the audience how your business has evolved over time, how things have changed, maybe how your team has grown?

And then also just want to thank you. We typically attend the FPA of Central Virginia annual forum, which is like a two or three-day event. You typically speak there and provide continuing education to financial planners interested in furthering their knowledge in this space. So like Tommy said, you’re taking care of clients. You’re helping take care of advisors so we can take care of clients better.

But quick, yeah, share a little bit about your firm and how things have progressed over the years.

Bryan Gay: Sure. Well, that reminds me, I got to get updating on the computer. So yes, I’ve been doing this now for 23 years. We’ve evolved over the years. So now we have seven full-time employees, which we’re not a very large company, but we only help people with Medicare insurance.

We are located in Richmond, Virginia, but we service people from Washington, D.C., Maryland area. So from Maryland to D.C. to Virginia, North and South Carolina, Georgia, and Florida now. We were doing only mostly in person meetings for years and years and years. So we would go to people’s houses, they would come into the office, but since COVID happened, back in 2020 and 2021 and moving forward, we did not do any more in-person meetings.

We have very few in-person meetings, and everything’s now done either over the phone, through Zoom, through webinars and things like that, which is bittersweet because we can get a lot more work done while we’re not traveling back and forth to people’s homes or having people drive around to us too. So it’s safer, much more efficient, and that kind of thing. The 6,000 helped clients was many years ago. So as we were talking ahead of time, that picture that’s on there is Probably 14 or 15 years old.

So a lot less gray hair back then, but now it’s over 20,000 people that we’ve helped on Medicare and answer Medicare-related questions. And I’ve also put on a little bit of weight and got a lot more gray hair since that photograph was taken. So I got to update that as time goes on. But yeah, so that’s our firm.

And again, we only do Medicare insurance, which makes us a very niche agency where most people kind of dabble in Medicare and then they’ll dabble in group insurance and they’ll do other things, but we only deal with Medicare so.

John Mason: Well, it’s a really neat story on how a business can evolve and change and how things like the COVID pandemic and just general life has evolved over the last four or five years. It’s really helped you scale and serve the community better if you used to be able to do five appointments in a day, now you can do 10 or 15. You’re helping more seniors who are enrolling in Medicare.

You’re helping more people. There’s a lot of benefits to everything that you’ve done. And in the financial planning space, we talk a lot about how registered investment advisory firms, Bryan, like ours, we’re a relatively small company, but you keep doing such a good job. You keep providing so much value that all of a sudden you wake up one day and you’re bigger than what you thought you would ever be just by continuing to do the right thing.

And your story resonates in the same way. Like however old this website is, we’ve gone from 6,000 to 20,000. We’ve gone from however many staff to seven, and you probably never envisioned building an empire or building anything that was going to be as big as it is now.

But by doing the right thing, by just being a good dude and helping people, this thing’s gotten pretty big for you.

Bryan Gay: It has, it’s exhausting. But yes, that’s exactly right. I mean, you can see the bag, that’s why I got more gray hairs, but yeah, I mean, that’s exactly what has happened over the time and it’s been great and we’re going to just continue to grow.

I just hired another employee a couple of weeks ago. She starts in February, so February 2025, and we’ll just kind of keep growing and you’re exactly right. We went from typically five to six appointments a day personally to anywhere from 10 to 15 appointments every single day. So it’s nice and we’re growing.

So thank you.

John Mason: And maybe an immediate shout out for the audience, Bryan, maybe you can share with them a little bit. So a lot of people listening are federal employees, right? It’s the Federal Employee Financial Planning podcast. Most of these folks are not going to enroll in a Medicare Advantage plan or a Medicare Supplement plan.

The folks listening to this are likely TRICARE for Life and Traditional Medicare, or Traditional Medicare and Blue Cross Blue Shield, or some fashion. But they know people. Their neighbors. Their friends. Whoever it may be. They know people who don’t have TRICARE and Blue Cross Blue Shield or federal employee health benefits.

Can you share with our audience really quickly the difference between going to like medicare.gov and applying for insurance by yourself? Like that’s an option. Or using somebody like you who can actually guide them and hold their hand through it, explain the difference quickly, as well as the cost difference, if there’s any, in those two scenarios.

Cause I think if you can find a trusted person like you, it’ll be eye-opening for folks to know that it’s a pretty good deal to work with you.

Bryan Gay: Yes. So with Medicare, it’s a great industry in my opinion. Of course, I’ve been doing it for two decades more. But what happens is people are turning 65 and they’re looking for some kind of advice.

And because Medicare is individualized, what works for some people might not work for others. And that even includes spouses, so a spouse might need a totally different plan than their husband or wife or that kind of thing. So at the end of the day, they’re coming into trying to make these decisions.

They’re getting all these advertisements. They’re getting all these friends giving advice and human resource people giving advice and the military giving them advice and federal employees giving not as much advice for the OEM and OPM and things like that.

But when people are needing Medicare advice, then they’re going to find these Medicare plans, and they’re going to do either Medicare supplement plans, also known as Medigap plans, or they’re going to choose Medicare Advantage plans. And that’s really the Joe public version of what they’ll have to choose from: supplements or Advantage plans. Well, all these plans are done by insurance companies.

So you have UnitedHealthcare Medicare supplements and UnitedHealthcare Medicare Advantage plans. You have Humana Advantage plans and Humana Medicare Supplement Plans and Cigna Supplements and Cigna Advantage Plans.

Well, at the end of the day, a relatively intelligent consumer can spend hours and hours and hours and hours on medicare.gov which is a great website, by the way, but they can spend hours researching days trying to figure out what is right or what’s wrong, and then they’ll end up signing up for that particular company, and hopefully they get it right. Let’s pretend they did it all right and perfect, which is not really likely, but let’s just pretend they did.

And let’s pretend it was a Cigna plan that was right for them that’s 18 bucks a month. The cool thing about our industry is it’s $18. So whether they buy it through my company, they buy it through Cigna, or they buy it on the internet, the plan is the same price, no matter how they buy them. Now when people come to us, because this is all we do all day long, and we know which plans are right for different people with their medications, and their pharmacy, and their doctors, and that kind of thing, if that Cigna plan was the right plan, and we signed them up on that $18 plan, well, Cigna pays us about $75 for us to sign them up.

If it was a supplement plan, and the supplement plan was $150 a month, it was UnitedHealthcare, it’s $150 through UnitedHealthcare, through us, online. Except if we do the enrollment, if my company does the enrollment, then UnitedHealthcare pays us about $250 bucks. So it’s nice that the consumer never pays us anything as a fee.

They’re going to buy some kind of plan, and whichever plan they wind up buying, it’s going to be the same price, whether they buy it through us or buy it online or buy it directly at the company. So it’s kind of a win-win situation. The consumer wins because they can get expert advice coming to us. We do all the different plans, so it doesn’t matter to us if somebody is a Cigna customer, an Aetna customer, or a Humana customer, we’ll just get them signed up on the right plan, and we get paid through those plans, whichever one happened to be the right one for that consumer, so it’s kind of a win situation.

We went as an agency because we can stay in business, the consumer gets expert advice, and they don’t even have to pay anything extra for that advice.

John Mason: I’m sure the insurance company is happy to pay you for you to do the education so they can just sell more insurance plans, right? Like at the end of the day, they’re probably not the ones that want to be providing this education and, Tommy, it strikes me that in the financial sales side of our business because we have to call that out.

Like there are fiduciary financial planners and there are financial sales people who sell products, and a lot of these people will sell index annuities or variable annuities or any kind of commissionable investment product and index annuities are the worst and fixed annuities can be the worst, not in that they’re bad products.

It’s that people market them as no fee. They’re like, Oh, you can have this unlimited upside potential with no market risk and no fee. You get all the wins, no losses, and there’s no cost to you. But there’s surrender charges, there’s loads, there’s whatever it may be baked inside.

Tommy Blackburn: Limits on your upside, yeah.

Or yeah, some complicated formula that wipes out the entire gain you thought couldn’t. So you didn’t lose money, but you also didn’t make any money. Yeah, there’s a number. It’s complicated, right?

John Mason: So there are these financial planners out there who will market no-fee products, but in Bryan’s case, I just want to make this a comparison or like delineate between the two.

Like this is actually a no-fee for the client. There’s no hidden charges. There’s no surrender commitments. There’s no loads. Like it’s the same cost. It’s the same product and you have the benefit of individualized customer support to help you pick the right product. Now, here is another call to action or another like beware is there are bad people in your business too, Bryan.

Tommy Blackburn: That’s exactly what I was thinking.

John Mason: Who may try to convince our federal employee clients to bail on FEHB or military clients to bail maybe on TRICARE for life, which you maybe that’s not even necessary because everything’s coordinating now, but there are certainly people out there trying to convince federal employees to do things that are maybe not in their best interest. So you have to talk about that too.

Tommy Blackburn: And not even just federal employees, John, right?

This could be the normal retiree because I think there is a conflict of interest I think As we kind of got rolling into this, I was thinking like just how great it is to have Bryan and his group of one, the collective experience they bring that they do what’s best for clients from what we can see. It really seems like it’s unbiased how they’re leading people, but I think there is a conflict of interest in that I think an Advantage plan pays an agent more than a supplement plan.

Is that correct, Bryan?

Bryan Gay: Oh yeah, it’s significantly more, but with Advantage plans, the Advantage plans are going to pay the agent a set amount of money too. So if it’s an Advantage plan, then whether it’s a Humana Advantage plan or an Anthem Advantage plan or a Cigna Advantage plan, the government regulates how much they pay.

But yes, if people buy a Medicare Advantage plan from our company, then on average, we’ll earn about five times the commissions doing Advantage Plans. Now again, it doesn’t matter if it’s Humana or Anthem, we get paid the same commission for Advantage Plans, when it’s an Advantage Plan. But if people choose Medicare Supplement Plans, which are called Medigap Plans, then yes, we make significantly less money doing Medicare Supplement Plans.

So the industry as a whole is kind of geared towards pushing everybody towards a Medicare Advantage plan, which I’m not trying to bag on Medicare Advantage plans, we do thousands of them every year. But a Medicare Advantage plan is not right for every single client where agents and agencies and call centers are really pushing people—everyone—towards Medicare Advantage.

And I don’t think that’s very fair because They’re basically shoveling people into a program just so they can make a higher commission and that’s not really our thing. We’re gonna look at each individual person and say here’s how supplements work. Would you like how this works as your plan or do you like Medicare Advantage plans?

Here’s how they work. Which one do you feel is right for yourself? Here’s the pros and cons of both. And then they can choose. I mean they’re adults so we don’t have a bias one way or the other because to me, it’s not really fair for us to push somebody one way or another just to generate a higher commission.

Like that’s kinda disgusting.

Tommy Blackburn: Yes. And your company is professional, which is why we feel good referring clients to you. You do bring expertise and it doesn’t seem like you push clients. And it really feels like you roll up your sleeves to understand their situation and figure out which plan is best, which is awesome.

And so very valuable and so we recorded Episode 46, 47, and 48 with you. If anybody listening wants to go back to those, and in particular, as we had this conversation, Episode 46, where we talk about Medicare versus Advantage, and we called it the luxury ride or the bus pass. So go listen to that and you can kind of begin to get a feel for some differences between Medicare and Advantage.

And Bryan, yeah, when I think about it, there are some sketchy characters in your—I’m sure there are in financial sales too, but when I think Medicare Advantage, unfortunately, my mind goes to this like really like almost like creepy individual that I know I encountered before that was selling Advantage and it’s not fair of you and others like you.

So I’m not trying to cast that. And I do think Advantage can have its place for many people. But it’s also what’s nice about you is I do think you stand apart is where I’m going from many other people out there who may be dabbling in Medicare or just only interested in putting people in advantage plans.

So you are, I think, rare from our experience and kudos to you. And we do think that folks can trust you.

Bryan Gay: Well, thank you.

Tommy Blackburn: Yeah, a hundred percent.

John Mason: So we’ll link to those prior episodes, a couple of quick hit items, guys, to remind our audience and Bryan, feel free to correct me or elaborate as you see fit here, but quick refresher on Medicare, and then let’s dive into some new topics.

So Medicare Part A is hospital. Medicare Part B is doctors. At 65 years old, we can enroll in both Medicare Part A and B. There’s nuances for disabilities and things of that nature. We’re not going to talk about those right now, but your initial enrollment period, IEP for Medicare. The three months before your birthday, the month of your birthday, three months after.

So Medicare Part A and B, most folks are going to enroll in that, including the people listening to this podcast. In addition to A and B, you will need a supplement or an advantage plan and a drug plan, some combination of those. For most of our clients and most of you listening to this podcast, you’re going to have Medicare A and B.

And either TRICARE for Life as your supplement and drug plan, or Federal Employee Health Benefits as your supplement and drug plan, but remember, there’s thousands of people turning 65 every day that need people like Bryan to help them pick out that supplement and advantage plan. You can go back to those prior episodes.

The biggest difference, my takeaways on advantage for supplement is choice. It’s not that the doctors inside of an Advantage plan are bad. It’s not that the care inside of an Advantage plan is poor. It’s that you are fairly restricted into the amount of locations that you can go versus you pay more for a supplement, but maybe you have more choice.

So I think that’s a good summary of some of the things we’ve talked about before. Bryan, do you agree?

Bryan Gay: Yes. Yeah. That’s a very quick, easy, good recap.

John Mason: Perfect. So let’s dive into maybe something that’s kind of like a political thing. We just got through, we’re recording this on January 14th, 2025.

Bryan, you just made it through the Medicare open enrollment period this year. So you’ve shaved, you’ve showered, you’re looking fresh. You’re ready to start the new year. You’re looking good. You’re feeling good. You’ve got some sleep. The Inflation Reduction Act, increases in Medicare, there’s been changes to drug plans that have resulted in folks, I think we thought maybe the consumer incorrectly thought that we’re going to put a limit on these drug plans as far as out of pocket cost, so everybody’s going to win.

But like anything, when the government gets involved, there’s some unintended consequences, so maybe you can share with our audience a bit how this open enrollment was different. Some of the premium increases that we’ve seen across the board and how the landscape is changing.

Bryan Gay: Yeah, so that’s a long time of a podcast, so I’ll try to condense it down for sure.

And I’ll also say I try to be as apolitical as possible and try to keep my political views out of things. Now, as a full disclosure, I’m not a fan of pretty much any politicians. So hopefully that doesn’t really weigh me one way or the other here, but they’re necessary evil like a lot of other things.

So this last enrollment period that just ended a month ago was one of our busiest times ever because of this Inflation Reduction Act. So for those of the people who are not familiar with it, it was an act passed by Biden and Harris a couple years ago, I think it was August of 2022.

And it had some good things and it had some bad things, which as we know, that’s what gets baked into these cakes when they’re passing these laws and acts and rules and things. So with the Inflation Reduction Act, they kept promoting how great and what they’ve done for the consumer by putting a cap on the cost of prescriptions.

And yes, if that’s the only thing it did, that would have been wonderful because it put a cap at $2,000 on the cost of people on Medicare for their prescriptions. So basically, you would not, as a consumer who’s on a Medicare plan of some type of Part D drug plan, the letter D for drugs. But if you’re on a Part D drug plan, in theory, you should not pay your pharmacy more than $2,000 for the whole year.

Well, that’s good for some of the people who hit what used to be called the donut hole. Well, what happens is they were paying a fair amount more than $2,000. But that was heavy users taking heavy prescriptions that are very expensive prescriptions in general. So we’re talking a very small population of the Medicare Group was hitting the doughnut hole, pushing their costs higher, and really the cap was around $3,500 to $3,800 when most people would get to the pharmacy, and then they would realize I’m not paying anything more for my prescriptions. So there was a loose cap. It wasn’t a finite number like $2,000, but most people were capping out their plans who got that far at about $3,600 or so.

Well, fast forward with this Inflation Reduction Act, they put the cap of $2,000, but then they also cut some of the reimbursements to the insurance companies and put a bigger cost of the drugs on the insurance companies as well. So what ended up happening is the insurance companies are paying more than they used to pay for the drugs and then with less money received from the government.

So if you were told you just got a cut in pay, oh, by the way, your bills just increased by 50%, 60%, things are going to have to change around your household, right? So what then happened is the brunt of these changes took effect in January of 2025. Well, you don’t just snap your fingers and everything starts January 2025.

You have a lead-up to that time. So every year, these insurance companies have what are called a bid season. And during the bid season, that’s May and June of every year, these insurance companies who deal with drug plans, with Medicare drug plans, These insurance companies go to Medicare and say, “Hey, look, based on what we have going on, based on the cost of drugs, based on the reimbursement rates that you’re giving us, we’re going to have to have this particular plan cost this particular amount.”

Okay, well, that’s been going on since 2006. And they’ve been very stable since 2006, these drug plans and the costs of these drug plans. Well, back in May of last year. These insurance companies were thinking, well, we’re going to have a big change to our costs in January of 2025, so we need to start making adjustments.

So in May and June, these insurance companies, which I won’t name names, but they’re all of them, all the big ones. The first insurance company came in and said, hey, our plan that was $18 a month is going to have to be $180 a month. Well, that’s a big change. And then the next insurance company came and said, Hey, we have a $30 drug plan and that’s going to have to be $220 a month.

That’s a big change. And the next insurance company came and the next insurance company came during this season that says, hey, these are what our prices are going to have to be starting in January of 2025. And they didn’t go up a little, I mean, we’re talking five times and 10 times the amount. Well, the government, if everybody remembers in 2024, there was this big thing called an election, so they couldn’t have all 70 million seniors prices quadrupling or 10x-ing. So the government hurriedly tried to wrap a bunch of band-aids on all these costs that were skyrocketing because the Medicare season really starts at the end of September or early October.

So if you can imagine 70 million seniors in October, getting a bill in the mail that said your drug plan was $18 and now it’s going to be $170 a month, that would explode all over the news. Not in a positive way. So, the last summer, in summer of ’24, the government came in and tried to correct unintended consequences by putting a bunch of band-aids on things for emergency stipends and trying to, fix some stuff.

So, at least there was a small band-aid put on to it for 2025. Now, it’s just a band-aid, it’s not a cure. So what we witnessed is out of a lot of the plans that were available, a lot of those plans either condensed or canceled. So we had a much busier enrollment season than we’ve ever had. And it was almost unexpected because we didn’t realize that that’s what was going to happen until August, basically.

So then nowadays for people who are starting in the Medicare and who have been on Medicare, unfortunately, a good portion of these people are going to find out they’re going to be spending more over the course of this year for 2025 than they did in 2024 or 2023 or 2021. So if you guys know any older Americans or older adults or your grandparents or whomever that have been on Medicare for a while, the cost of their medications overall as a majority are going to be going up due to this Inflation Reduction Act.

John Mason: So summarizing a little bit of that, Bryan, is that we’ve seen consolidation and cancellation within the health insurance industry based on government intervention. And then subsequently the private sector response to said intervention, right? So we’ve seen consolidation and contraction as far as the plans offered.

We’ve seen potential premium increases, and now we’re seeing drug companies passing on the higher cost or the insurance companies passing on the higher cost by form of increased prices for drugs. So the question I have for you is Blue Cross Blue Shield now has a Medicare Prescription Drug Program, MPDP, Medicare Prescription Drug Program, that’s rolled into Blue Cross Blue Shield now, it’s like an add-on, and you automatically enrolled in it, for those of you who are 65 or older, you can also unenroll or disenroll from that plan, but my question to you, Bryan, is are federal employees who are on Blue Cross Blue Shield and Medicare, are they going to see an increase in prescription drugs too as a result of the Inflation Reduction Act and everything we just talked about?

Bryan Gay: Yeah, probably. It usually takes me months and months to start hearing from the federal people because we don’t sign them up for the federal plans.

They go through Office of Personal Management kind of things. But, at the end of the day, I would say yes. Some of the cost of their medications will be going up, especially if they have that extra add-on plan, because I’m pretty sure that add-on plan is classified as a Part D drug plan. So because it’s a Part D drug plan, it’s going to abide by all these rules for the Part D drug program.

So a lot of people will end up paying more, especially up front, because even most of these drug plans did not have the drug deductible or their medications didn’t go against the drug deductible. So the federal government dictates what the maximum allowable deductible is on drug plans. Well, for the year 2025, the maximum deductible is $590. Well, a lot of people who are taking these low-cost generic drugs, they didn’t go against the deductible.

They were covered before the deductible. So they were paying nothing for some of these drugs, or they were paying $5 for some of these drugs, and these people didn’t even know their plan had the $590 deductible. Well, now, more and more of these companies are making their drugs go against the deductible in the beginning.

So they will see a higher cost for their drugs in January, February, March, and April. And especially the people who have been taking the higher cost drugs, they’re really going to get hit hard because, same thing, some of those drug plans did not have the $590 deductible, and now pretty much all of them do.

So as people are filling their prescriptions in January and February and March, they might have a sticker shock seeing the cost of their medications jump so high. Mainly because of The Inflation Reduction Act and that deductible that’s put them there.

John Mason: Well, Tommy, we should make sure we link in the notes and the description and everything that Blue Cross Blue Shield, Medicare prescription drug tool where folks can actually go in and they can type in their prescription and they can compare Blue Cross Blue Shield basic only to Blue Cross Blue Shield basic with Medicare and then Blue Cross Blue Shield basic with Medicare prescription drug plan and Medicare, and we can actually compare all three of these to see what the difference is and if you find yourself, right, Tommy? If clients find themselves in a situation where their MPDP, their drug skyrocketed, they can bail on this throughout the year. They don’t have to wait for an open season.

Tommy Blackburn: I believe that is correct. And yeah, there’s a dedicated website on FEHB or FEP Blue about the Medicare Prescription Drug Plan, MPDP, that you’re talking about. As we were going through this, I’m thinking, this is just gonna prove the stereotype correct.

So for many of our federal employees, retirees, maybe it’s people in general, change is usually viewed as not positive. So when these came out, many were very suspicious and were like, nope, I’m happy with the coverage I’ve had and I don’t trust that they’re ever gonna do anything that’s for my benefit.

And I think John and I we probably believe that to a degree, but we also just more optimistic, look for opportunities and I think try not to just immediately dismiss things. So it’s like, hey, let’s, let’s give it a fair shake. And now as we go through this, you’re seeing more and more, it’s like, yeah, maybe you guys are right.

Maybe you should just stay out of this because we’re beginning to see some more unintended consequences ripple through. So we’ll link to it, John, and we’ll certainly be talking with our clients. And as you said, the nice thing. For our clients, and I guess to a degree, the general public is they have Part D plans, that’s the world they have to live in, I believe our clients don’t have to necessarily do that, but you have an annual decision, right?

And as you said, sometimes you can even, it’s not even just an annual decision, you could potentially drop one ever throughout the year and fall back into your original coverage.

John Mason: And for those highly compensated federal employees listening to this podcast, Medicare Part B is subject to the income-related monthly adjustment amount or IRMA.

Well, your MPDP through FEHB, any more acronyms we can throw out there, you guys just go have at it. That’s also subject to IRMA, so for those of you who find yourself in an IRMA threshold, that’s a very good chance that you would maybe want to opt out of that Medicare prescription drug plan. I wrote down—oh go ahead Tommy.

Tommy Blackburn: I’m sorry. Well, my mind was going a couple of places. One is you and I have a new client situation that we were already leaning against going Medicare for them because they have this choice. Again, this is federal employee-specific. They don’t have to go on Medicare. And that one, they actually file separately, married filing separately.

And so with the IRMA thrown in there, it seems like, yeah, we’ll definitely be sticking with just good old fashioned FEHB. And the other one I was thinking about maybe it’ll be a different episode is talking about the postal service and Bryan, I don’t know if you’ve had much exposure to it yet or if you’re getting more since they’ve been changing things and I don’t know how much of an option they have at this point.

Bryan Gay: Yeah, that post office thing is a whole another podcast, but yes, the postal people, they were never required to pick up part B and they had a pretty robust retiree health plan, but as costs keep going up, the postal service was self-insured.

So they were trying to find ways to save money, so then they look at the federal government to pick up some of the tab. So these people who have never had Medicare Part B for years and years and years, now they’re required to take Medicare Part B. And they had to submit a document to Social Security specifically to get their penalty waived.

They actually did a fairly decent job on administering that change, but it’s a lot and it’s as people can understand as a small train wreck of them, filling out forms, sending the forms back to the post office, the post office, getting it to the social security administration and hundreds and hundreds and hundreds of thousands of people who are on that program inundating the social security administration. It’s a lot.

John Mason: When did all this go into effect again with the post office?

Tommy Blackburn: It’s been in the works. I mean, it’s been at least a year lead up, but I think it went live this January.

John Mason: Oh, that’s perfect timing. So it went live the same time as Social Security Fairness Act was passed. And, and you take the Social Security Administration and the workers who are I had no doubt trying to do their best now have to figure out how to pay benefits to all sorts of people who weren’t eligible.

And then they have to increase benefits to all those who were impacted by Windfall Elimination. And then you throw in the wrinkle of having to override the system for these part B premium penalties for 65. I mean, how much more can we—my cousin Benny, is there anything else we can throw on to the top of this case?

Like, is there anything else we could put on this administration, social security administration right now? I mean, this is a lot.

Tommy Blackburn: We definitely want to break it. Let’s throw as much as we can at it.

Bryan Gay: Yeah, an already broken system of—Try to bite my tongue. I’m so scared.

Tommy Blackburn: Let’s just overwhelm it more because it’s already doing such a great job.

John Mason: We can’t venture down too many paths as it relates to medical coverage and care because none of us are doctors or practitioners in that field. field. But I think it’s interesting. I was meeting with a physical therapist and his opinion of how his reimbursements are being impacted by changes to Medicare.

And he communicated to me that over time, his reimbursement from Medicare goes down every year or reimbursement from TRICARE goes down every year to the point where he was making less as a physical therapist in 2024 than he was in 2014.

And, again, I can’t fact check all of this, but if the government does things and their choices and whoever sets these reimbursement rates, like this guy, this physical therapist, other physical therapists like him may have to choose one day not to be in business for themselves because of the things that the government is doing and how they’re affecting the private sector, which, as I think about contraction, consolidation, and elimination of certain industries or drug plans, we’re seeing that outside of just Medicare, as far as practitioners go, like physical therapists, doctors, et cetera, who may not be able to keep the doors open if the government keeps doing this stuff.

Tommy Blackburn: Taking us back to the Postal Service, and we’ll maybe circle back to them in another episode if we have time, but I was just reading on, because I was looking through the tool to make sure we had the link to share with comparing costs for our federal retirees. And then there was a special like, Hey, if you’re a postal service, go check this out on your drug costs, cause it’s different.

And they’re just saying if I’m reading this correct, if you opt out or disenroll as a postal, you will no longer have any prescription drug benefit. So they don’t have a choice. They have to go into part B and they have to do the Medicare prescription drug plan.

John Mason: Yep. Good info, Tommy. So we’re going to go through a unique scenario with Medicare Part A that we recently went through with a client. So I want to talk about that scenario. And again, I’m not trying to be like the political guy. Mike Mason’s typically that for us. But as I think about Bryan, the band-aids that you said that were put on for 2024, 2025, it strikes interesting to me that if some of these band-aids get ripped off in the fall of ’25 leading into ’26, how many consumers are going to wrongfully or rightfully, depending on how you feel about it, blame the new current administration. So President Trump is going into office. And if these Medicare premiums go up in 2026, I guess what I’m just trying to say is that it takes a while for these changes to ripple through the industry. So things that happened in 2022 are coming to fruition in 2025 or 2026.

I think wrongfully as the public, we typically just associate whatever is happening right now with the current administration, where we probably need to look in the rearview mirror a few years to understand how we got to this place.

Bryan Gay: Yes, that’s not going to happen because everybody’s looking to the current people, and right now, I wasn’t a big fan of Biden. And I don’t want Donald Trump to come to my house. I don’t want to have dinner with the guy. , he’s not going to be my best friend. So, I’m not a huge—I think he has some very weird ideas as Donald Trump. But I will give blame where blame is due.

And, I have actually said that exact same thing, John. I’m like, if they might just get blindsided like this, the administration that’s taking over in January of 2025, they might get totally blindsided by the band-aids that have finally worn off. They weren’t ripped off. They just kind of wore off. And if nobody understands the ramifications of that Inflation Reduction Act, then there’s going to be some huge changes in costs and plans in 2026.

And it’s going to look like Trump’s administration just totally screwed up everything relating to Medicare when that has nothing to do with the current administration now in 2025. I mean, there’s a good chance I’m going to probably have to hire a couple more people before 2026, just for the fallout that’s going to happen in 2026, if things aren’t corrected.

John Mason: But we don’t have a dog in the fight. I don’t know if that’s even politically correct to say anymore, but we just want to educate and want people to be informed and even something as simple, Tommy, as like the Federal Reserve changing short-term lending rates and things like that, like that’s not instant, right?

It takes months or years for those changes to ripple out through the stock market and reverberate.

Tommy Blackburn: And it’s complicated, right? It’s like one factor of many, so it certainly influences things, but there’s many others that are, they’re all piling on together.

John Mason: So very fascinating conversation. Let’s transition to a unique scenario, which for our audience, we’ve been specializing with federal employees, Mike Mason since like 1990, Ken Mason since ’92, me since 2010, Tommy since 2019.

So we have a lot of experience helping federal employees enroll in Medicare. And we have a lot of experience in understanding social security and the nuances around these systems. But admittedly, after all of that experience, we were stumped a little bit recently in a very, what we would call semi-unique situation.

So Medicare Part A, Bryan has correctly helped us over the years, Tommy. It’s not free. It’s premium-free and—

Tommy Blackburn: No additional cost I suppose you could say you’ve already paid for it, right? Yeah, so as we work through our careers, we already pay Social Security and Medicare taxes FICA, OASDI as part of your normal payroll tax. That Medicare piece is paying for your Part A in retirement, so it’s 100% not free.

You’ve just already paid for it.

John Mason: So you pay for it over your entire career. Medicare and then Medicare Part B has its own separate like additional premium when you get to retirement. So you pay for medicare Part A, 1.45% of your check goes to Medicare every month, or every quarter, or every two weeks.

Tommy Blackburn: And maybe, John, as we were looking, it’s just a natural curiosity, right, for those folks. Because you had to have paid for it throughout your career. So say you didn’t, which is rare, and kind of leads us into this scenario. Or if you just want to even know, what does it cost if you hadn’t already paid for it?

And it appears that if you haven’t had at least 30 quarters of coverage, 30 quarters of work, which is seven and a half years, it’d be $518 a month. So very expensive. I mean, not an inexpensive premium there. And then they have another break point, which is seven and a half to 10 years.

It’s $285 a month. Almost seems like they should put that number out there more just to let people maybe understand, like, what does this, even though you’re not paying for it now, because you already have, like, what is it, what does it cost?

John Mason: It’s a big number. So there’s no additional premium for Part A because you paid for it your entire career.

But like social security retirement benefits, you had to have paid in a certain amount of quarters or years to be eligible for premium-free Medicare, just as you become eligible for Social Security retirement benefits. So $518 a month is your Part A cost, plus you would still need Part B, which I think is over $180 now, if I’m not mistaken.

Bryan Gay: $185.

John Mason: $185. So you’re at over $700 a month just in Medicare A and B before you tack on these prescription drug plans. So significant cost if you don’t qualify for premium-free A. So let’s paint the scenario a little bit for our audience. And I’m going to make the couple a little bit older and younger than they really were.

So Spouse 1, 65 years old, eligible for Medicare. Does not qualify for premium-free Part A on her own. Does not qualify for Social Security retirement benefits on her own. Younger spouse, 61, has 40 quarters for Social Security and has paid Medicare his entire career. We know, as financial planners, that if your spouse has paid into Medicare their entire career, that spouses are also eligible for premium-free Medicare.

So that’s something that we’ve encountered time and time again, year after year after year after year. We see the same scenario. But, Tommy, what was unique about the scenario I just painted? 65-year-old spouse, 61-year-old worker who has been the one contributing to both systems.

Tommy Blackburn: Well, I guess there was a few things that were unique that we learned about it.

What’s unique there? From our experience, in particular, is that the non-covered spouse, the one who didn’t have the work record with Medicare, was the older one. Typically, just stereotypically, you tend to see that person be the breadwinner, the work record individual, the older of the spouses.

That tends to be what it is anecdotally. So this was unusual from that and then as we found out and specifically, John, is the one who was on the lead on this. So he just shared all the information with us. We learned that his experience You cannot apply online if you, in this scenario, if you don’t have a work record and And in particular, too, because the other spouse wasn’t even eligible for Social Security yet.

See, all of these various things here that were so unique, you can’t apply online. And so then it ultimately led to, John, if you want me to complete it is stop me if you want me to. Yes, eventually we had to get involved with a local Social Security office to push that application back through and I believe in this situation, it just happened to line up luckily enough.

I say luckily enough, but lined up that the younger spouse was going to be shortly eligible for social security. So that ultimately it was still a premium-free. I think that’s the way we’re saying it. No additional cost to Medicare Part A in that situation.

John Mason: Yeah. So admittedly, we’re not perfect and we learn every day. Okay. So the 65-year-old non-working spouse. In order to be eligible for premium-free Medicare Part A, her younger spouse needs to be 62 years old. If he’s not 62, she does not get premium-free Medicare. He doesn’t have to enroll in Social Security, but she just does not get premium-free Medicare.

So, luckily, her initial enrollment period and his age, 62, coincide. But if he was 45 or 55, like, that’s a game changer. , and it’s just admittedly something that we haven’t seen very, very often. And then the other nuance, Tommy, like you mentioned, is not being able to apply for Medicare online in this specific situation, which caused all kinds of hassle.

And so just calling out the unique situation and calling out that Mason & Associates continues to get better every single year. And just when you think you’ve seen it all, Bryan, it’s just not something that we’ve seen in our career.

Bryan Gay: Yeah, and I’ll say, like, that particular nuance is not something that it’s very well seen at all.

I mean, like, we will see that maybe twice or three times a year. And keep in mind, we’re seeing thousands and thousands and thousands of people coming into Medicare every single year. So, I mean, that exact scenario is probably less than 1% of the time, definitely less than 5%, but what Tommy mentioned is a lot more often than this is the person who doesn’t have enough work credits to apply for Medicare based on their own work history.

Because remember, you got to have 40 quarters or 10 years of work history of personally working to get Medicare on your own work history. Well, for those people who don’t have those quarters, who don’t have those credits to get Medicare Part A as a premium-free, then they depend on their spouse and their spouse’s work history.

Well, the only way currently, again, this is January of 2025, but the only way currently for the person who does not have enough work credits to enroll into Medicare Part A or Part B is they have to physically go down to the Social Security office, give documentation of being married, like marriage certificates and things to prove that they have been married to this spouse and their spouse has enough work credits, for me as a non-working spouse with not enough credits, for me to sign up for medicare. So they got to do it manually at a social security office.

Well, the problem with that is the social security administration, I’m going to just say they’re overworked I think they’re also under-motivated in terms of employees, but that’s how much as I’ll say on that. So what ends up happening is you call to get an appointment. Well, around the Virginia area right now, it’s taking 45 days to 60 days to get an appointment just to go into social security to get signed up manually for Medicare.

Well, when you’re talking a month and a half to two months, well, as John, you were saying, people can sign up for Medicare three months before they turn 65. And I’ll be the first one to tell people, not everybody should sign up for Medicare at age 65. There’s a whole bunch of people who should absolutely not sign up for Medicare at age 65.

Just because you can sign up doesn’t mean you should sign up. Now, there’s people who should actually be signing up for Medicare in the three months before their birth month, before they turn 65. So people hear this all the time. You can sign up for Medicare three months before your birth month. Three months before your birth month.

So imagine if I was a non-working spouse who didn’t have enough credits to apply for Medicare online, and everybody’s telling me, “Well, I did it online. I did mine online. I did mine online.” And I’m thinking, Gosh, am I an idiot? Like I can’t figure out how to do it online. So I’m going online. I’m calling the people at Social Security and some of the people at Social Security at these call centers don’t know this either.

So they’re trying to help me figure it out. I’m online and if I started in the third month before my birth month, like say I’m born in March, So I started it in December, I get through the end of December, I still haven’t figured out how to sign up, and then here it is January 1st, and I now found out I have to manually go into the Social Security office, and they have to do it internally inside the office, and I call in January asking for an appointment, and they tell me, well our next available appointment is March 15th.

And I’m like, wait a second, you guys told me I can sign up in the three months before. And they said, well, yeah, that’s true. You can. But we don’t have availability for you until X amount of time. So then that puts a lot of stress and angst on that person who’s now thinking, well, am I going to be penalized?

Which they’re not going to be penalized, but they feel like they might be penalized. They’re worried about their health insurance not starting. They’re worried about what documents do I need to take down there? And it’s just causing a lot of undue stress because now they have figured out they have to physically go into the office and have those people do their Medicare based on their working spouse’s health work credits.

John Mason: Well, calling it out is, you only live, retire, and die one time. You only apply for Social Security and Medicare one time. And we do these hundreds of times, Bryan’s thousands of times. And this is a unique nuance where you think, like, maybe my website’s wrong. Or I’ve tried to reset my password.

And you just start, like, looking at all these unique things that are contributing to the stress factor. Call social security. They don’t know this nuance. They don’t know this rule. Everybody’s sending you in the wrong direction and it’s not a pleasant experience. So I’m sorry to my client that I serve directly that I wasn’t better in this scenario.

I wish I would have been able to be more in front of it and more proactive and helping them through it. But luckily, through their patients and through our proactive work together, we were able to get to the bottom of it before her 65th birthday. And then you throw in the nuance of her military ID card’s about to expire, she needs to get on TRICARE for life, and all of these things, and long and short of it, audience, is you can be somebody’s hero.

Lynette O’Berry, who used to work here recently retired has shared our previous episodes with several of her friends that we’ve recorded with Bryan. And everybody says that these Medicare episodes are the best and best way to learn about Medicare, how Medicare works in retirement. Federal employees, non-federal employees. Lynette was so cool sharing these episodes and and she just would always come back and say, “My friends love it. They say they learn more in the last 45 minutes than they’ve learned in all the hours they did this by themselves.”

So audience, you can really be somebody’s hero. By just sharing the podcast, sharing these recordings, sharing Bryan’s expertise. This is a really, really fun episode.

Tommy Blackburn: It has been fun. I think it seems like are approaching the end and Bryan definitely want to know if you had anything on your mind or questions.

One thing that popped into my mind is maybe just an update. From a cost perspective, what does the supplement route look like these days? And by that, I mean, Part A shouldn’t cost us anything. Part B, $185, and Part D, what is the typical premium? And I realize I’m asking you. That that can vary, but like on average, what do you see for Part D and a supplement?

And my guess would be like, I think it’s a Plan G is the more comprehensive one. Just use that as an example.

Bryan Gay: Yes, so I’ll have three real quick things to talk about. I’ll hit that one first, the question. So the main question is, what does it really look like in terms of cost as a new retiring person to come on to Medicare and get kind of the top level of medical health insurance?

Well, that would be Medicare and a supplement and a prescription drug plan. Well, that all varies based on location and state that you live in. But I will say probably for the majority of these listeners, they’re going to be from Maryland down to Florida for the majority of them. So I would say Medicare by itself, by the time you have pre-paid for Part A, so you won’t have anything to pay for Part A, 999 people out of a thousand, that’s their way, so they don’t have to pay for Part A.

Part B, currently, this year for 2025, the base rate that everybody has to pay is $185 a month. Then you have a supplement plan, also known as a Medigap plan. And in most of the states, they range for a 65-year-old person.

They’re ranging around $140 a month, again, is a good average, unless you live in Florida or New York or in the Northeast, then they’re more like $250 or $300 a month. But that’s, again, New York and above, north towards Maine and New Hampshire and that kind of thing, or Florida, then they’re a higher cost. And of course, if we have people in California, then those costs are very high in California, 200 something bucks, but the majority of people are going to be paying around $140 bucks for a 65, 66, 67 year old retiree. And then their drug plan is going to be, I would say again, on average this year is probably $20 a month. So across most states, people are going to be paying between $310 to 350 per person per month by the time they get Medicare at $185, a supplement for 140, and a drug plan around $20.

That’s about that $300, $350 range, so that would be it in a nutshell. We’re not talking about Advantage plans right now. They could save money, but again, like John mentioned, they do have nuances with Advantage plans.

The second thing I’d like to hit real quick is John fell on a sword. It’s not his sword to fall on. So he apologized for not knowing about a very rare nuance of Medicare. And I’d like to just clear that up for the listeners. You guys are wonderful financial planners and already go so much farther beyond what a normal financial planning company does.

Like, you guys have to keep in mind, we work with hundreds and hundreds and hundreds of financial planners, and almost none of them care about people’s Medicare, the cost of their Medicare, how to sign up for Medicare, and absolutely do not help any of their clients sign up for Medicare Part A or Part B.

So don’t beat yourself up too much, John, because you guys are so far above and beyond at helping your customers, even understanding Medicare for the first part, and then helping them enroll into Medicare is something that just nobody in your industry does. So kudos for you guys to actually take a big personal investment into your clients to help them navigate something that’s very problematic for most people to navigate.

I mean, we do it every day, all day long, but that’s our job to do the Medicare side of things. So you guys are doing wonderful. The last thing I would say is if people want to be very proactive about this, and you guys can look at this with your practice as well, but to get ahead of this whole premium-free Part A or can they sign up for Part A or Part B online, if people created an online social security account by just going to www.ssa.gov for government.

But you go to the Social Securities Administration’s website, you create an account, you can log into your account, and then as soon as you’re able to log in to your Social Security account, it would say, like for mine, it says, “Welcome Bryan,” and then underneath Welcome Bryan, it says, “Congratulations, you have the 40 quarters required to claim social security income.”

Well, the reason I have 40 quarters is because I have personally been in the workforce for 10 years or more. And then if you start scrolling down the page again, this is all in your social security website, but if you scroll down the page far enough, it’ll say Medicare and it’ll say, “Congratulations, you have the 40 quarters required to receive Medicare.”

Okay. Well, now we know that I’m eligible for Social Security based on my own work history, and I’m also eligible for Medicare based on my work history, when it’s time for me to sign up for either of those things. So for your clients, if you wanted to have them do an extra step and say, hey, look, you’re 60 years old today. You’re 62 years old today. You’re 63 years old today. Why don’t we log into your social security account?

And let’s see if you’re available for social security and also Medicare, which is further down. And then that way it can help people identify “Can I sign up for Medicare Part A and Part B online?”

Because if I can do it online, it’s so much easier to click a few buttons and do Medicare enrollment online as opposed to try to call the wonderful people at Social Security Administration and have them manually do it. That takes forever and it’s a very frustrating experience for most Americans. So if you see that ahead of time, then you can plan accordingly and say, okay, well I need to get ahead of this prior to the three months before my birth month.

I don’t want to start a month before my birth month of 65 or I don’t want to start two months ahead of my 65th birth month. I need to do it earlier and get ahead of it quicker because I may or may not have my work credits required to do it online.

Tommy Blackburn: That’s awesome advice.

John Mason: Yeah. So I think audience, if you can do all the things for us, like subscribe, hit the bell notification, share this with a friend or family and help them because Medicare is stressful.

Change is stressful. These one time life events are stressful. If you like this episode with Bryan, if you like the episodes we’re doing with guests, we’d love to see that in comments or emails to give us encouragement to keep doing some more of this. But Bryan, thank you so much for joining us on another episode here on the Federal Employee Financial Planning podcast.

Bryan Gay: Thanks for having me.

John Mason: Tommy. Thank you, sir.

Tommy Blackburn: Thank you guys. It was a blast. Bryan, I hope you’re with us to do, or you’re down to do some more of these in the future. It’s always very valuable

John Mason: Audience, thank you so much. We enjoyed this episode. Thank you again for being on this journey with us.

Thank you clients for being a part—listening, tuning in, sharing this with others. It’s truly amazing that we’ve been doing this for over three years now at Mason & Associates. Remember this. We’re financial planners. First, we do this second, and we hope to support, empower, educate, and motivate you, our listeners, and our clients to make positive changes in their financial plan, either through individual customized advice, or at least through this podcast.

Thanks for being with us on another episode of the Federal Employee Financial Planning podcast.

The topics discussed on this podcast represent our best understanding of federal benefits and are for informational and educational purposes only, and should not be construed as investment, financial planning, or other professional advice.

We encourage you to consult with the office of personnel management and one or more professional advisors before taking any action based on the information presented.