Navigating Medicare: Your 2027 Open Enrollment Playbook

Welcome to everyone who’s joining us today. Thanks for spending time with us this morning.

We’re very excited about hosting today’s webinar. It’s called Navigating Medicare: Your 2027 Open Enrollment Playbook. My name is Colin Day. I’m a Wealth Advisor at Mercer Advisors.

I’m located in Saint Louis, Missouri.

Now most of my job as a financial advisor, it surrounds assisting my clients, being the point person on their financial futures. That encompasses things like investments, estate planning, tax planning, insurance, among other things. And we’ve had a wonderful year here at Mercer advisors. And one of those things that you may have noticed recently is that we were, for the third year in a row, declared Barron’s top ranked or number one RIA in the country.

And one reason that I personally think that we have achieved that kind of of, moniker is we really are designed to help our clients live a simpler life.

And that involves being a great resource for all things that touch a dollar sign, and our conversation today, is gonna be a great example of that. Because as we head into the final quarter of this year, many of my clients are really concentrating on that idea of Medicare planning. And it seems that of all the black boxes that exist out there for retirement planners, this one just seems to rear its head every single year. It lurks in the shadows and then suddenly comes to the forefront and then disappears for another twelve months. But our objective today is to shed some light on those shadows. And because this message, is in the shadows for probably a lot of people that you know, we do want to make sure that you are aware that you could share this webinar after it’s done.

So by the end of this week, you will receive a copy of this presentation. You could share it with other people. It’s also gonna be uploaded in on the merceradvisors.com website.

You navigate to “Sharing Knowledge” and then to webinars, and then it’ll be one of the first things that is there. And as a friendly reminder, the material in this presentation is for educational purposes only, and none of this is to be misconstrued as advice for you. And if you have particular questions regarding Medicare, you, of course, can reach out to your Mercer Advisors, wealth advisor, or Ari will show you in a moment how you can connect with his team at Chapter. Speaking of Ari, Ari Parker is going to lead most of our presentation today.

Ari, how are you today?

I’m doing great, Colin. This is our fifth year presenting to Mercer clients, so I cannot wait to share the updates for 2027 that are in store.

That is awesome. Now if you’re not familiar with Ari or if you haven’t attended one of these many webinars that Ari has been seen on of ours, he’s the cofounder of Chapter. He…

It’s a firm that’s dedicated to seniors that helps them make educated Medicare decisions, and he helps oversee Chapter’s team of a 175 Medicare Advisors. He’s a Stanford trained attorney. He’s also the author of a book, “It’s Not That Complicated,” which helps you simplify the Medicare decisions, making process. And Ari lives in Phoenix with his wife, daughter, and a few dogs.

But today, we are very fortunate to steal him and a couple members of his team, so that he can talk through this very important topic. Now I’m gonna be in the q and a answering some questions along with some of Ari’s team members. If you have questions during this presentation, feel free to use the q and a so that we can address them throughout, and we’ll have some time at the very end to answer a couple more questions. But for now, Ari, I’m gonna hand the reins over to you.

Thanks again for being here today.

Absolutely.

And in the q and a, which Colin and I are monitoring, we have my colleagues, Daniel Galaviz and Doug Hall, to answer your Medicare questions. So if you have Medicare questions that pertain to you, your spouse, a friend, and acquaintance, you can drop those in the q and a. We can’t get into details about specific insurance companies. So if it’s if it’s really tailored to your individual plan, that’s better for a one on one appointment. So let me go over the way that Chapter and Mercer Advisors partner together.

Three buckets of clients that we help Mercer Advisors with. The first, for those of you turning 65, you should book your one on one appointment with Chapter three to four months before your 60 birthday.

Second, for those of you who are past 65 and you’re on yours or your spouse’s work provided coverage, we’ll talk about the rules there briefly, then you should book your appointment a month, two months before you or your spouse are ready to retire. And then finally, for those of you already on Medicare, you’re going to find so much actionable information from today’s presentation, and we are delighted to help you.

Your window to take action ends December 7. So if you’re already on Medicare, 73,000,000 Americans are, your window is underway and it ends December 7.

Let me talk about how to book your one on one consultation.

First, it is free of charge. There’s no charge to work with Chapter, and there’s no strings attached. Book your one on one consultation through askchapter.org/mercer. Askchapter.org/mercer. And if you want your advisor to join the call as well, you can simply add them to the invitation. Do make sure that the time that you’re selecting works for them first, though, and they will also receive an an invitation to the appointment if you book through askchapter.org/mercer.

Let me talk about our agenda for today. First, I’m going to go over the key parts of Medicare. This will be a review for those of you who are… Who have attended previous presentations.

Second, we’re going to talk about the three baby steps of Medicare, the three bite sized decisions that anyone approaching Medicare will go through. And finally, we’ll discuss how to take action and some rules that pertain to 2027.

Picture Medicare as a three legged stool. Three legs. You need all three legs. First leg, what what happens when you go to the emergency room?

That’s your hospital coverage. Second leg, everything outside the hospital. And then the third and final leg is drug coverage. Each of these legs corresponds to a part. So we gotta learn the lingo.

That reduces the complexity enormously.

Hospital coverage is Part A. Part A visits to the hospital. Then there’s Part B. That’s your medical coverage aka outpatient coverage.

That’s everything outside the hospital, Part B. Everything besides the hospital is Part B. And then the third and final leg of the stool, drug coverage. They made this the easiest, D as in drugs.

Let’s unpack the first two legs of the stool in a little more detail. So Part A is your hospital insurance. This also covers you when you’re receiving inpatient mental health care, skilled nursing facility care, home health care, even hospice, which is an official diagnosis, meaning someone has less than six months to live. That is all billed to Medicare Part A.

You might say that sounds great.

What’s the charge?

For ninety nine percent plus of people, it is $0 per month for Medicare Part A. And the reason why is because you or your spouse have paid federal payroll taxes for at least ten years. So as long as you or your spouse have paid FICA for ten plus years, which Medicare says over ninety nine percent of people have, you qualify for premium free Part A. Now there is a deductible for each trip to the hospital.

It’s substantial. It’s close to a couple thousand dollars. We’ll talk about that a little later on when we discuss your options for additional coverage. Then there’s Part B.

Part B, everything besides the hospital. That’s your outpatient coverage. This is visits to your primary care physician, visits to a specialist, lab work, x rays, MRI, CT scans, even durable medical equipment like a wheelchair or a walker is billed to Medicare Part B. Now there’s a monthly charge for Part B.

Over 20,000,000 people pay approximately $200 per month.

What if you’re a high earner though? If you’re a high earner, you pay even more.

And we’ll talk about the rules for high earners a little later on. Now you might be wondering, what was that announcement that president Trump had over the weekend about a Part B giveback? If you pay the standard amount for Part B already, then you should notice $90 from a a $90 check on your Social Security, or you might receive $90 if you’re not yet on Social Security. So you you have to pay the standard part b premium in order to receive the $90 that president Trump was referring to over the weekend.

Now in unison, Medicare Part A and Part B are referred to as original Medicare. These were the twin pillars established by congress in the mid nineteen sixties. In fact, the first person to receive Medicare was president Truman.

And these two parts are printed right on your red, white, and blue card. They come directly from the government. So you might be wondering, how do I get my red, white, and blue card?

Well, it takes less than five minutes if you do it through your online Social Security account. It’s fast, safe, and secure.

Now let’s talk about the third leg of the stool, Part D, D as in drugs. This is coverage for your prescriptions.

You should get it for at least two reasons, carrot and stick. The carrot. What if you have what if you have a drug that’s added during the course of the year? You need insurance.

You don’t plan to get in a car accident, but you still purchase auto insurance. Same principle applies here. That’s the carrot. Second reason, the stick.

If you don’t sign up timely for Medicare Part D, then there’s a late enrollment penalty. And it is a lifetime penalty. It continues to compound for as long as you delay taking action, and you owe it every month for the rest of your life. So it’s easily avoidable.

You just need to get prescription coverage. Now there’s two ways to get it. What I want to emphasize though is that both of these ways come through a private insurance company.

Part D was added to Medicare forty years after its establishment. Part D only comes through a private insurance company. It doesn’t come directly from Uncle Sam unlike Part A and Part B. That’s why Part D isn’t printed on your red, white, and blue card.

Now let’s talk about some improvements on the horizon for 2027. In order to action these improvements, you need to take action no later than December 7. And don’t wait past Thanksgiving. I’m a procrastinator, and my wife is always on me about it.

The best time to review your coverage, do it before Thanksgiving so that way you can relax over dinner and you don’t need to continue to stress about it as the deadline approaches.

First improvement on the horizon. The maximum annual out of pocket cap on your prescription costs will be capped at $2,400 for next year. So $2,400 is the cap. Now if you’re on inexpensive generics, you don’t come close to $2,400 in costs.

If you added an expensive brand name or specialty medication, though, it would be important that your plan has that $2,400 cap. And in order for that $2,400 cap to apply, each prescription that you take must be covered under the plan that you choose.

The second improvement. Previously, the way that it worked is in January or February, you would fork over thousands of dollars at the pharmacy if you were on an expensive medication. Now that’s been changed. If you do hit the maximum annual out of pocket early in the year, which there’s incredible specialty medications, there are cancer fighting medications that attack the cancer’s metabolic pathways.

Those can cost upwards of $12,000 per month. So we would want to make sure that that cancer fighting medication is on the Part D plan that you choose. And if it is, then your costs will likely be smoothed out over the course of the year. So rather than forking over $2,400 in January or February, instead you’ll owe $200 per month.

The final improvement, Medicare is now negotiating the cost of certain prescriptions on your behalf.

For for the first twenty years of the program, they hadn’t been allowed to negotiate directly with pharmaceutical companies. It was outlawed. That changed under the inflation reduction act. So now pharmaceutical… Now Medicare is allowed to negotiate with the pharmaceuticals.

There are GLP ones that they’re negotiating on behalf of you for… Over, including Ozempic and Wegovy. And also Trilogy Ellipta, which is an expensive medication that will also be negotiated over starting in 2027. Again, the particular Part D plan that you choose has to cover those prescriptions, though. So even if you’re not on, let’s say, a GLP one, if you know that you might want one during the course of 2027, it might be important to tell that to your advisor so that way they can make sure that the plan that you’re selecting covers the prescription that you’re… That you and your doctor are interested in having you receive.

With that, let’s go over the three baby steps of Medicare. The first is how and when to sign up for original Medicare.

When can you sign up for Medicare if you’re turning 65?

It’s a seven month initial enrollment period that begins three months before the month in which you turn 65, and it extends to your birth month and three months after your 60 birthday. So if Diane were turning 65 on December 23, the earliest that she can sign up is September 1. And if Diane signs up in September, October, or November, her Medicare is starting December 1. Medicare coverage is always dated to the first of the month.

But if Diane waits until December to sign up, her Medicare is going to be delayed by at least a month. And if she misses her initial enrollment period entirely, she may even owe a Part B late enrollment penalty. So that’s a major mistake. That’s so avoidable.

Instead, you just need to know your sign up windows. The best time to sign up for Medicare by way of turning 65 is three months before you turn 65. So that way, you’re ready to go on the first of the month in which you turn 65.

And for those of you who are born on the first of the month, you actually get Medicare a month early. So I’m I’m born on February 1. That means my Medicare will actually start January 1, and that just shifts the window up a month to sign up if you’re born on the first of the month. Who needs to sign up for Medicare by way of turning 65?

Anyone who’s retired, anyone who’s on COBRA. COBRA isn’t considered creditable for the purpose of delaying Medicare. COBRA is designed to be secondary to Medicare, so you need Medicare as your primary insurance. Someone on the Affordable Care Act needs to sign up for Medicare by way of turning 65.

You lose all your Affordable Care Act subsidies when you turn 65.

And someone who works for a small employer or someone who’s self employed also needs to sign up at 65. Anyone who works or their spouse works for an employer with 19 or fewer employees needs to sign up for Medicare at 65. The only people who have an exception to delay starting Medicare are those who work for a large employer or your spouse does. Rule of 20 has to be 20 employees or more.

Here, if you or your spouse work for an employer with 20 employees or more, you will receive a special enrollment period to activate your Medicare.

And the time to do it is a month or two before you’re ready to retire. It just adds one one page form that your benefit coordinator, that your HR department needs to fill out. It’s a one pager, and they just sign the form at the bottom, and we help you submit that to the Social Security Administration so they can activate your Medicare. Just adds one piece of paperwork to the process.

And the biggie… The big reason to sign up before you retire, even though you technically have this eight month period to do so, is what is your coverage going to be in the interim if you don’t sign up?

You’re going to be without coverage because you know that even if you COBRA, COBRA is only secondary to Medicare. So you have to sign up a month or two before you retire to make sure that you don’t have a timing issue and so you have insurance in the first place.

Now for those of you who are on a high deductible health insurance plan and contributing to a health savings account, an HSA, there’s a special rule, and this is the trickiest rule that the Social Security Administration has on the books. If you want to read about this rule, I write about it, and it’s not that complicated.

It’s my short book on Medicare, and you can read it in one sitting in less than ninety minutes. But the way this rule works is you need to discontinue contributions to your health savings account six months before you intend to apply to enroll in Medicare if you’re past 65.

If you’re contributing to an HSA and you intend to take Medicare at 65, you just need to discontinue your HSA contributions the month before you retire. Now HSAs are amazing. Colin has a lot of content that talks about how wonderful they are, and I think they’re great. I contribute to one here at Chapter.

You can use all the money that you accrue in your HSA to pay for any qualified medical expense when you retire. The only thing you can’t use it for is to pay for your Medicare supplement premiums. Don’t worry about that term. I’m going to introduce it to you in the next section.

So HSAs are great. Just know that there’s a special rule. If you’re past 65, you need to discontinue contributions to the HSA six months before you intend to apply to enroll in Medicare.

Now let’s talk about how you’re going to cover your additional costs under Medicare. So in return for paying the Part B premium, you get eighty twenty coinsurance with the government. Government picks up 80%, you owe 20% out of pocket and sky’s the limit on that 20%. Additionally, if you don’t have some type of additional coverage, you owe close to a couple thousand dollars for each trip to the hospital.

What’s more, you know that original Medicare doesn’t cover prescriptions. That’s separate and it only comes through a private insurance company. And finally original Medicare doesn’t cover dental, vision, or hearing and we’ll talk about that later on.

But the biggie, you owe at least 20% for your medical costs and sky’s the limit on that 20%. There’s no cap. There’s no ceiling. So let’s take an example. My mom lives in the Chicagoland area. A couple years ago, she needed a knee replacement. It’s a $50,000 procedure.

My mom would have owed $10,000 for her procedure had she not had some type of additional coverage. The very next month, she slipped, broke her elbow. She needed physical therapy for her elbow. It was a big rigamarole. She would have owed 20% for everything related to her elbow as well.

Your out of pocket cost can spiral if you don’t have additional coverage.

So though there are over 24,000 plans nationwide, we can broadly sort them into one of two flavors.

Option one is to keep original Medicare and add Medicare supplement, which is also known as Medigap. And I like referring to it as Medigap because that allows you to picture through your mind’s eye exactly what it’s doing. It’s covering your 20% exposure you’d otherwise have. If you go with Medigap, you only need to add a stand alone prescription drug plan in order to have comprehensive coverage.

So if you value choice, flexibility, freedom, option one is for you so long as you can afford the premiums for Medigap. And we’re not talking about outrageous sums here. Typically, Medigap in many, many states costs approximately a $150 per month if you’re turning 65.

There’s a lot of factors involved, but broadly about a $150 per month unless you live in a high cost state.

Then there’s option two. Option two is a replacement for original Medicare administered by a private insurance company aka managed care. So option two is what’s heavily advertised on television. Joe Namath, Jimmy Walker, William Shatner, you could pick your favorite Medicare Advantage spokesperson. And you might hear Medicare Advantage referred to under synonyms. Part C, that’s Medicare Advantage. When the spokesperson is talking about an all in one plan, that’s Medicare Advantage two.

Medicare Advantage can work really well if you don’t go to the doctor very often.

But if you see a lot of doctors, and again, if you value choice, comprehensiveness, freedom, you probably want option one. Over 85% of Mercer advisors clients choose option one rather than option two. And the reason why is option two is managed care. So if you’re on an HMO advantage plan, you can only go to in network doctors unless it’s an emergency. So if all your doctors aren’t covered by the particular advantage plan that you choose, you can’t see those additional providers.

Even if you’re on a PPO Advantage Plan, you pay less when you go in network, you pay more when you go out of network, and if your out of network provider doesn’t accept the advantage plan’s terms and conditions, you can’t see them.

The second reason clients of Mercer advisors tend to choose option one is because Medicare Advantage is subject to prior authorization.

And in 2023 alone, there were over 50,000,000 prior authorization claims according to the Kaiser Family Foundation.

Now option one tends not to advertise. Option two is heavily, heavily advertised, especially right now.

So let me go into why most Mercer Advisors clients choose Medigap. First, you appreciate not having to worry about whether your doctor is in or out of network. It’s networkless coverage.

It works with any doctor who accepts Medicare nationwide, and over ninety three percent of physicians do. The primary category of doctors that don’t, pediatricians, doesn’t apply to your circumstance.

Second, you value the freedom to see any specialist you want nationwide without a referral. So if you want to go to the Mayo Clinic, Mayo doesn’t work with any Advantage plans. You definitely want a Medigap plan if you want the freedom to go to Mayo.

And there’s other institutions that work the same way. So it’s very important that you have your institutions in mind because that will help frame which…

Whether you should choose option one or option two.

Third reason, though you owe a premium with Medigap, there is cost certainty. Because once you hit the Part B deductible, which is $283 in 2026, under the most comprehensive Medigap letter types, you’re done. So your deductible is $283 for this year. Your maximum out of pocket is $283 for this year.

And by the way, we don’t know what the Part B deductible will be for 2027 yet. That’ll be announced in the coming weeks, but assume it’s $300. Point is, it’s still a bargain. Here at Chapter, I have a $6,000 deductible for my wife, daughter, and I.

Our out of pocket maximum is almost $10,000 I can’t wait to be on Medicare.

And then the final reason that Mercer advisor clients tend to choose Medigap is because it’s designed to last a lifetime.

The Medigap plan letter type that you choose is probably what you’re going to have for the long haul. And if you’re turning 65 today, you have over a fifty fifty shot of living into your nineties. So you’re not just making a decision based on your health needs for this year. You’re making a decision for what your health… How your health will evolve over the next decade or two.

With Medigap, even though you marry the Medigap plan letter type that you choose typically, we do want to help you review your drug plan every year. And just by taking ten to fifteen minutes to review your stand alone prescription drug plan, we help Mercer advisors clients save on average $1,100 per year. That savings goes directly into your into your pocket. So if you and your spouse review your stand alone prescription drug plan, you might save over $2,000 together.

The most comprehensive Medigap plan letter type that you can choose is plan letter g. G as in great.

This is the most comprehensive option for someone who recently turned 65. So previously, plan f was the most comprehensive option. Plan f was sunset for people who were turning 65 as of 01/01/2020. So since 2020, the most comprehensive Medigap plan letter type is plan g.

Now here’s how plan g works. You don’t have a network restriction. Go to any doctor without any doctor who accepts Medicare. Nationwide.

You’re free to move about the country. You don’t need a referral in order to see a specialist. You don’t have to ask for anyone’s permission. Under Medigap plan letter g, you don’t have any additional bills or co pays to deal with.

All that matters is hitting the Part B deductible, which is $283 for 2026. Once you hit that deductible, you will not see another Medicare approved expense thereafter for the remainder of the calendar year.

And then the final thing that I wanna mention is Medigap plan letter g comes with 80% international coverage when you go abroad. This really helped a client a few years ago who was traveling in France. They suffered a heart condition. They were hospitalized for nearly two weeks outside Paris.

Because they were on Medigap plan letter g, our member advocate team was able to help them get $24,000 in reimbursement, so it didn’t ruin their trip. Literally, the claims were written in French. And and that’s something else I wanna emphasize. It…

It’s not just that we review your coverage once or we help you choose coverage once. Our relationship is ongoing. You can always reach out to your Chapter advisor or your Chapter member advocate. So you have two line of defenses, and the member advocate team will help with any hiccups that come up surrounding your coverage.

Whether it’s an absurd copay at the pharmacy, we’ll call the pharmacist and help it get adjusted based on your plan.

Whether it’s losing an ID card, we’ll help you get another. You don’t have to call the insurance company. Instead, you call your Chapter member advocate and we will help you fight, fight, fight to make sure that your Medicare is working for you.

Let me say a little bit more about Medicare Advantage because you will just see so many advertisements about it right now.

Remember, Medicare Advantage is managed care.

It’s subject to a private insurance company’s terms and conditions, and there’s hundreds of pages of terms and conditions. So first, it’s managed care. Second, it’s subject to prior authorization, which means the insurance company gets a veto over the care that you and your doctor think you should receive.

Now the goodies that you’ll see advertised with advantage plans, oftentimes dental and vision, maybe even over the counter benefits or a gym membership. It’s not worth choosing one of those goodies to sacrifice your hospital and medical coverage.

With that said, advantage plans have their use case. If you are living off a fixed income, if you don’t go to the doctor very often and you expect your good health to continue, Those those are classic instances for advantage plans. We advise on both types of coverage. So whether you’re interested in option one or option two, we can help you.

But just know that we want to make you aware of the trade offs inherent to Medicare advantage. And, again, the reason that I’m dwelling on the distinction between option one and option two is because there are just so many commercials promoting advantage plans, and it is one or the other. You can’t have both. And by the way, if you’re listening to this presentation and you say, wow.

I had no idea about option one and Medigap, then your time to act is during the Medicare open enrollment period, which ends December 7. So you can do something about it after today’s presentation.

With that, I want to turn to the final baby step of Medicare, which is taking action. How do you choose across the 24,000 plans plus nationwide?

Here at Chapter, we use the three p framework. Three p’s. First, your priorities. What’s important to you? Are you looking for the lowest cost plan? Are you looking for the most comprehensive plan? Are you looking to promote flexibility, choice of doctor, comprehensiveness?

All of that factors in to whether you should choose option one or option two because that helps filter which plan is for you. Second p, your providers. What doctors do you see? What institutions would you want to go to? For example, is it important for you to go to Mayo, Sloan Kettering, or a different institution like MD Anderson, which is perhaps the nation’s… One of the nation’s leading cancer research institutes?

And then the third p, your prescriptions. What medications do you take? Brand name or generics?

What dosage matters too? And then, of course, your pharmacy. Do you like a national chain or a local mom and pop drugstore? Is mail order acceptable?

All of that helps us narrow to the single best fitting plan for your needs, and our advisor’s incentives are aligned with yours. The only thing that matters to a Chapter Medicare advisor is making the single best fitting recommendation based on your three p’s. Nothing else matters. They are blinded.

Our advisors are blinded as to which insurance company’s Chapter earns revenue from and which ones we don’t.

Now it is important to review your coverage every year. If you’re on Medigap, you probably are happy with it. You might just wanna check if you’re overpaying because Medigap… Each Medigap letter type is standardized under federal law.

So one supplement insurer’s plan letter type doesn’t vary on its hospital or or medical benefits compared to a different insurance company’s Medigap plan letter type. So any Medigap plan letter g is the same as any other insurance company’s plan letter g as it goes for hospital and medical benefits.

If you’re on an advantage plan, you know that the benefits are changing each year.

So even if you were on an advantage plan that you were perfectly satisfied with for last year, perhaps it’s changing in a way that’s suboptimal to you. And we need to make sure that that advantage plan is going to cover your doctors again. We have to do another network check to make sure all of your doctors are accepting that plan for next year. Whereas with Medigap, we just need to confirm that they accept original Medicare.

And, of course, if you have drug coverage, need to confirm your list of drugs, that you haven’t added any prescriptions, and we need to see how your list of medications will be covered for next year. That’s another way in which we help you save. So it’s really important to do a review. This doesn’t take very long, probably fifteen minutes. And look, I might be the only person who enjoys talking about health insurance. I know. It is even challenging for me to do my own health insurance at Chapter.

But take the fifteen minutes, and then you can ignore all the commercials that you see, and do it based on your three p’s. Write out your priorities, your providers, your prescriptions. And so when you meet one on one with Chapter, you’re ready to get down to brass tacks and find the single best fitting plan for your needs.

So here’s your open enrollment checklist. First, if you’re on a standalone prescription drug plan or a Medicare Advantage plan, read through your annual notice of change. This probably arrived in the mail already. This is your Medicare renewal letter for next year, and it describes how your plan is changing for 2027. It puts your 2026 plan side by side with your 2027 plan.

Second, write out your three p’s, priorities, providers, prescriptions. Third and finally, schedule your free Medicare consultation with Chapter you can do a review in roughly fifteen minutes and be done with speaking about health insurance for the rest of the year.

With that, Colin, I wanna turn it back to you.

Awesome information, Ari. Really top stuff. And I also wanna give a quick shout out to Doug and Daniel on your team. They are doing what I would call hero’s work in the q and a right now.

They’ve addressed already 50 questions, and they’re they’re working through this very steadily. I’ve chimed in, where appropriate. But, really, hats off to those gentlemen, and thank you very much for answering those questions. Keep the questions coming in.

We are gonna start to answer a couple common ones, that that Ari wanna make sure that we addressed. We’ll continue to use the q and a function, and then I’ll have a couple extra bonus questions for Ari at the very end. So if you don’t mind, Ari, we’ll take a look at your first question that you got there.

And that is, if you have a preexisting condition, can I be denied option one, which is Medigap and Medicare Supplement?

The answer is yes in 46 states once you’re outside your Medigap open enrollment period, which coincides with when you start Medicare, either by way of turning 65 or past 65 and retiring. So in 46 states, the answer is yes once you’re outside your Medicare… Medigap open enrollment right. Your Medigap open enrollment right is your golden ticket to get a Medigap plan the Medigap plan letter of your choosing without any questions about your health history. So if you have a preexisting condition, and a preexisting condition can even be considered diabetes and hypertension in combination, which is very common. Thirty five percent of seniors have diabetes and hypertension. That could be something that a Medigap insurer denies you over. So you don’t wanna miss your Medigap open enrollment period if you’re on option one.

And I know the terminology is confusing, but just remember, 46 states, your Medigap open enrollment right coincides with when you first start Medicare.

Now what are the four states that are an exception here and allow you to choose Medigap without any questions about your health history? They are New York, Connecticut, Massachusetts, and Maine. New York, Connecticut, Massachusetts, and Maine. If you live in one of those four states along the Northern Atlantic Seaboard, then you can sign up for a Medigap plan without questions about your health history.

And the the time to make that transition would be no later than December 7.

So what are these health history questions? Like, what if what if you just learned about option one? You’ve been on Medicare for several years. What can you do about it? Each Medigap insurer’s health history questions are a little different from the others.

But it’s typically seven to 10 questions about your recent health and a prescription check. It’s not like a a a life insurance examiner comes, takes your height and weight, your blood work. It’s it’s not it’s not as onerous as that process. It’s just seven to 10 questions about your last two to three years of health, and they vary insurance company by insurance company. So if you get denied with one insurance company, another insurance company might be delighted to offer you Medigap coverage. So if you’ve said… If you’re saying to yourself, wow. I do want Medigap.

Book a one on one consultation, and we’ll see if we can make it happen for you.

Very good.

What about this one? You know, I selected option one, Medigap. Should I get stand alone dental and vision coverage?

This is a question we get a lot. Now some of you are going to ignore what I’m about to say. If you just must have a stand alone dental plan, here’s how you do it. You go to the insurance coordinator at your dentist’s office and you say, which dental stand alone plan provides the best reimbursement at your practice?

That is source of truth. Go to the insurance coordinator at your dentist… Your dental practice if if you just simply need to have it.

Now let me provide the rule of thumb that we use here at Chapter. In general, stand alone dental plans are the most lucrative product that health insurance companies sell.

We get addicted to dental plans when we’re working, and our employer is subsidizing them.

And we want that dental coverage when we go on Medicare, but original Medicare doesn’t cover dentistry.

In fact, dentists did a great job making sure that they weren’t subject to Medicare’s rules back when the program was first established in the mid nineteen sixties.

So stand alone dental insurance, very good value for insurance companies, oftentimes not a good value for you. You don’t get back in benefits what you pay in premiums, especially if you’re just going for cleanings. On vision, I recommend Costco, Sam’s Club, you name it. It is oftentimes less expensive to pay out of pocket for your prescription lenses than to purchase stand alone vision coverage.

Very interesting. Several clients… I I have personal experiences with family members that, that are frequent flyers of the Costco, vision and hearing desks, here at our local Costco. So it’s important that we are surrounding ourselves with all the kinds of health programs, right, that we need, not just the medical side of things. As as Ari just put it, you know, when it comes to the the subsidizing of our vision and dental care, it’s not that we wanna skip on those because, obviously, we still wanna be able to chew. We still wanna be able to see and get coverage over time as our health deteriorates and necessitates more care. But it takes a lot more decisions and maybe contacting your current providers to make sure that what you have currently is the best fit for you going forward.

So finally, Ari, I know we have at least one more question here.

What is the Medicare high earners tax?

And can I appeal it?

The Medicare high earner tax is the income… So so this is what the government calls it. The income related monthly adjustment amount. The income related monthly adjustment amount. That government’s acronym here, IRMAA.

That is what they call it, IRMAA. And it is a a high earner tax, and there’s actually two taxes. There’s one on your Medicare Part B, and there’s a second on your Medicare Part D. So two high earner taxes, two surcharges is is the polite terminology the government uses. You are subject to IRMAA if you are a solo filer and you earned more than a $109,000 based on your 2024 tax return.

You are also subject to it if you are a joint filer and you earn more than $218,000 modified adjusted gross income based on your 2024 return. The point is it’s a two year look back. And the reason they’re looking back two years is because so many people file an extension for the most recent previous year. So that’s why they look two years back.

Now your circumstances may have changed. What if you retired at the end of twenty twenty four or you retired at some point in 2025? Then you can absolutely appeal. There are eight life changing events that the Social Security Administration spells out for the purpose of appealing your IRMAA.

The two most common are work stoppage or work reduction. Sadly, the third most common is divorce. Now don’t get a divorce just to save money on your Medicare high earner taxes. However…

Although if you’re looking for a reason. If… However, for IRMAA, it is important to know that you can appeal and instead request that the government look at a more recent year. When you first go on Medicare, this is something that we’ll walk you through and will tell you what Medicare… What high earner bracket you’re in because it’s graduated. If you just earned a hair above those threshold amounts, you just owe a little more. But if you earned a lot more, then you owe a lot more. So for example, a standard… The standard Part B premium for 2026 is approximately $200 per month.

If you or your spouse earn more than $750,000, you’re actually paying close to $700 each for Medicare Part B in addition to a $91 surcharge each on Medicare Part D. So it can really save a lot of money to appeal. Now we don’t know what the 2027 Irma brackets are yet. They haven’t been announced. But when they are, please feel free to email partners@askchapter.com. They should be announced in the next several weeks, and we can… We’re we’re going to update this chart because we just don’t have the 2027 numbers yet. The government hasn’t set them.

And it’s interesting, Ari, that you’re not recommending divorce in this situation, but I I… What I didn’t hear you say is that you’re recommending marriage perhaps, which might actually…

Which in theory could help your Part B and your Part D premiums. We talk a lot with our clients about the realities of their Irma surcharges, and how…

Where we pull money from investment accounts in retirement directly reflects this. So we have these two competing ideas. Right? We have the competing ideas of I don’t wanna have to pay more for federal and state taxes, but I certainly don’t wanna pay more for my Medicare charges.

And for most of…

At least my clients that I I speak to who live all across The United States, there’s a lot more sensitivity to pay more for Medicare than paying more for your federal and state taxes for whatever reason. But this is where your advisor is supposed to help, where we’re supposed to come in and provide you with that kind of income planning, so that you’re making the right kinds of decisions. It’s also why we ask for our clients’ tax returns because it helps us forecast what might happen in the future because there is this two year look back that we have to deal with. Like you could see on Ari’s screen right there, that’s the 2024 numbers, which affects this year in 2026.

What we do in the past affects the future. So it’s this marriage of various ideas that know, if we don’t wanna pay a lot in tax, we don’t wanna pay the surcharges, we have to be proactive as your advisors to make sure that we’re getting out ahead of those types of things.

Alright. Well, Ari, I’ve got a extra questions, some bonus questions for you. I see that you threw something up on the, the page though about booking a consultation with Chapter. I’ll let you maybe, you know, harp on this for a a quick thirty, sixty seconds, and then we’ll get to some extra bonus questions.

Yes. If you’re hearing of Chapter for the first time, thank you so much for attending the presentation. And please, to discuss your situation more one on one, book a consultation through askchapter.org/mercer.

And and with that, let’s turn to some of the questions that you received in the q and a, Colin.

Yeah. So there’s, there’s a whole bunch of questions. I think we received over a 150 questions ahead of session. And, again, hero’s work is being done by your team right now.

They’ve already answered, I see, 84 questions right now. Wow. Many open and outstanding. Keep those coming.

If we can’t address your questions directly in this conversation, we will do the best that we can to have your advisor be aware of your questions if you’re a Mercer Advisors client, and they will address them directly with you after this webinar. One of the questions that we got, Ari, of all the loaded questions that I saw, this is the most loaded. Okay? So I want you to prepare yourself.

Question from Terry, which is, are Medicare costs going up again in 2027? And what I really would like from your your guidance on maybe what you’re telling the individuals and families that reach out to you, Ari, might be what what is the forecast?

When you’re thinking about where costs might go in the future, do you have any general guidance that you share?

Yes. In in general, you can assume that costs will go up each year for the simple reason that inflation is is is probably forcing them to go up. And one of the fastest growing segments of inflation is that…

It has…

Is related to health care. Health care inflation has actually outpaced inflation across sectors as…

Colin, I know you’ve mentioned this too. So in general, yes, we can anticipate that costs are going up. And and also for the costs that the government has released for 2027, we’ve seen that they’ve gone up. So your Part D deductible for 2026 was $615.

For next year, your Part D deductible is going to be $700. Now if you’re on inexpensive generics, you probably…

They probably aren’t subject to that $700 deductible, But that’s something we want to review. We don’t want to make sure that one of those generics, you actually have to meet that $700 deductible just to receive it.

So this is a long way of saying yes.

Costs are going up.

And and would you say, as a follow-up to that question, Ari, are they even across the board? So if I live in Maine or if I live in California, is everybody’s cost going up the same amount every single year?

So Medicare is administered by the federal government. So someone in Maine pays the same Part B premium as someone in California. So those costs are set at the federal level.

We’ve seen that those costs are going up for next year. And now in terms of the individual plans that someone in Maine can choose, very different than the plans that they can choose in California, though there are, broadly speaking, you know, they still have to choose between option one versus option two. Does the person in Maine want Medigap plan letter g? Guess what? In California, it’s Medigap plan letter g two. So in broad strokes, they have… There’s there’s some similarities on the pricing level, and there’s also similarities in the types of coverage that they choose.

But it goes to the three p’s. And and one’s three p’s, if they’re a Mainer, are very different than if they’re a Californian.

Absolutely. Great. Speaking of living in various states, I’m gonna create a variation on a question we got from Bruce.

What happens to Medicare if I relocate to a different state during the year, including a potential supplemental policy?

So your Medicare Supplement, aka Medigap, is portable.

So if you make a move from Texas to Arizona, no issue.

Now it might make sense to reshop it to see if you might pay less switching to a Medigap plan letter g on the move to Arizona, and we do that all the time. If we can help you save money, we’ll absolutely help you execute the transition. We take care of all the paperwork. On the drug side, for your stand alone prescription drug plan, the move does create a special opportunity for you to switch your Medicare Part D plan. And just actually last month, we were helping someone who moved from Tampa to Saint Pete, which isn’t very far of a move. But because of that move, they’d… They were able to get their Repatha.

They were able to save $2,000 on their Repatha for the last four months of the year. Three months for the last three months of the year. So it was it was it was a big deal.

Great.

Let’s see here. You you talked a bit about international coverage, and, Douglas asks, what does Medicare cover when out of the country? And I know you mentioned Part G specifically might offer some international coverage. But if we don’t have Part G or, or or a Medicare policy for that matter, what kind of coverage can an American expect as they travel abroad or potentially move abroad?

In general, if you just have original Medicare, don’t expect any coverage when you’re outside the country. There are now… There are some limited there are some limited, limited scenarios. Like, if you’re driving in Washington state and you cross over into Canada and the the Canadian emergency room is closest… Is is closer than going back into Washington state because you intended to remain in Washington state and you only exited to make the transition to that little island near Canada, that would be a situation where it covers. But but that exception almost proves the rule. It is so limited that you should not expect any coverage when you’re abroad. Now there are some Medicare Advantage plans that do provide benefits when you’re outside the country.

This would be something if you are interested in Advantage. It would certainly be important to mention that as one of your priorities too in your one on one consultation.

Absolutely. Great. We have lots of clients that are spending more time abroad because they are traveling to visit, you know, either family members or they’re just… They have a lot of free time on their hands as retirees, of course, and they wanna explore this wonderful world of ours and they wanna get out, but there is the health care component, component that we have to consider here. So if you’re approaching a large or long international trip, definitely a good time to consult with Ari’s team.

Another question for you, Ari, and we have time, I think, for maybe one or two more. Can a Chapter representative help me better understand our federal health care benefits, especially around TRICARE For Life?

For TRICARE For Life, it’s super straightforward. So TRICARE For Life is for retired service members who served our country for twenty years or more.

All you need to do is activate your Medicare Part B. That’s all you need to do. Once you activate your Medicare Part B, you then receive a $0 Medigap plan from the Department of Defense along with excellent drug coverage. So that’s all TRICARE For Life people need to do. In terms of federal retirees, if you have the option of federal employee health benefit insurance, oftentimes, it’s a really good idea to take that. Now in terms of deciding whether you want Medicare in addition to your FEHB, that’s something to speak to the office of personnel management with. That’s not something that we can help you, choose between.

Great.

Kenneth asks, and this is a question for me, Ari. I’m gonna give you a break. I’ll let you take a drink of water if you need for this one. Thank you.

How how do we minimize Medicare premiums in the face of large RMDs?

So RMDs, if you’re not familiar with that acronym and a whole presentation full of them, required minimum distributions. So this affects our clients that have pretax money in retirement accounts, whether they’re still connected to our employers or something that we’ve rolled over into an individual retirement arrangement or IRA. These accounts have minimum withdrawals that the government says, you’ve enjoyed tax free growth long enough. It’s time for us to collect that tax revenue.

We’re gonna make you start taking those withdrawals. And that’s the time where many of our clients end up facing those Irma surcharges where the traditional Medicare premiums for both Part B and Part D shoot through the roof potentially. This is where proactivity comes into play. If this is something that is on your mind, this is exactly what we’re here to do as your wealth advisors is to help assist you to determine are there ways that we can mitigate that.

If you’re a decade before required minimum distributions, we have a decade to figure out some of this stuff ahead ahead of time. So this is why it’s important that you engage with your advisor to help address some of these things before it rears its ugly head. K? Alright.

I think that’s all the time that we have today for q and a’s. If we have not addressed your question or if you sent one in previously and if you’re…

Especially if you’re a Mercer Advisors client, your advisor will reach out to you, with hopefully an answer with that or to provide you with a resource that can help answer them, like Ari’s team. Ari, do you wanna share your screen one last time with that last slide so people know how to get into contact with your group?

If I share it, I would have to go into presenter mode. So let me say it’s askchapter.org/mercer. Askchapter.org/mercer. Or you can just reach out to your Mercer advisor, and they will help connect you with Chapter.

Absolutely. I’ve got a feeling, Ari, you are…

You guys are gonna be very popular in the next couple of weeks.

It’s it’s been such an incredible partnership over the last half decade, and thank you so much for having me back to present.

Yes. Thank you, Ari, for attending and for presenting and doing such great work for us. Thank you again to Doug and Daniel as well who have done, as I will continue to say, hero’s work in the chat to provide us with a lot of good information. Again, you’ll get a copy of this presentation by the end of the week.

It will also be hosted on the merceradvisors.com website in case you’re not able to catch the whole thing or if you wanna go back to any things that you thought were particularly of importance. So until then, thanks so much for attending. Have a great day.