Scott Hokanson - retirement

Health insurance is one of the most confusing systems in America—and Medicare is rarely any easier to understand than the co-pays, deductibles, and other costs that people deal with before age 65. As great as it would be to transition seamlessly into Medicare coverage, few are able to do so without risking being partially uninsured or overinvesting in the wrong coverage.

To better understand Medicare coverage, we’re talking to Scott Hokanson. Scott is licensed as both a Medicare Supplement and Medicare Advantage Expert, as well the Owner of Brabo Insurance, which works with over 500 small businesses and over 10,000 employees situated between Cape Cod and Boston.

In this conversation, we discuss what Medicare is, the penalties and taxes associated with healthcare for retirees, and a wide variety of different strategies you can use to not only get the coverage you need, but reduce your expenses in other ways as you approach and enter retirement.

In this podcast discussion, you’ll learn: 

  • Why Medicare Part A is good (but not fully comprehensive) healthcare coverage.
  • Supplemental Medicare plans Scott recommends to most of his clients. 
  • What makes Medicare uniquely frustrating for doctors and hospitals.
  • The common mistakes that people make with health savings accounts.
  • Why Medicare prescription plans are awful—and how you can find less expensive medicines.

Inspiring Quotes

You would actually be surprised that when you compare with the pre-65 plans or normal health care that people expect, even these lower-priced Medicare Advantage plans are equal, if not better.” – Scott Hokanson

I think HSA is the second-best place to save money. 401(k) is number one.” – Scott Hokanson

Resources Mentioned

Read the Transcript

Keith Ellis: Welcome, everybody, to The Retirement Roadmap. We’re joined here today by Scott Hokanson. Now, Scott Hokanson is a 27-year veteran in the Massachusetts health insurance industry. He spends most of his days helping small businesses and individuals navigate the health insurance marketplace and he is here today to discuss Medicare and things beyond. Scott is licensed as both a Medicare Supplement and Medicare Advantage expert and helps SHP clients when they’re approaching retirement age navigate this crystal clear, right, Scott? Crystal clear, easy-to-understand system. No. 


Scott Hokanson: Job security for me.


Keith Ellis: Yeah, exactly. Exactly. We’re also here joined by Matthew Peck, my business partner, CFP, co-founder of SHP. So, obviously, one of the main questions that we get asked as people turn and look to navigate and get closer to 65 and look to transition from what I call traditional healthcare to Medicare is what’s the best place to start, I guess? Where do you go, besides calling Scott, what’s the next best place to start? 


Scott Hokanson: The best place to start really is just understanding, and this is part of your guys’ whole retirement plan, a big part of the retirement plan is their Social Security and other benefits that they’ve paid for their whole life. If you asked me what health insurance costs today, I would say on average my clients pay about $800 a month for every person that’s on health insurance, and that’s for a plan that’s really not very good right now. You know, $2,000 deductibles, co-pays, big prescription co-pays, and what have you. But one thing that most of your clients, if not all of your clients, have done is they’ve all paid their Medicare taxes, as has their employer for the last 30, 40 years of their working. And what that gets them at age 65, this does not happen if they start collecting early, that doesn’t trigger it, but at age 65 or their Social Security normal retirement age like for me, I think it’s 66 ½ or 67, that gets them access to Medicare Part A. If you think of health insurance and how health insurance has evolved, Part A was the first piece of Medicare, and it essentially covers the big stuff, the hospital stuff, and that’s worth about $500 a month. Okay. So, the reason why looking at Medicare as opposed to COBRA or your employer plan is because you’re getting something for free, and I have air quotes here for those hearing this on the radio, you’ve paid for it. You’ve paid taxes. Your employer has matched every dollar of that tax since you’ve been working. And at 65, you get Medicare Part A and that costs you nothing. 


And if you do nothing else, Medicare Part A is actually pretty good insurance. It covers the big stuff. If you’ve got cancer, you have a hospital stay, it’s going to cover 80% of that bill. Okay. Now, health insurances evolve. We started at MRIs and CAT scans and stuff like that. So, now they’ve created something called Medicare Part B, which you have to choose to elect, and that’s the cost of Part B. You buy that from the government and that is varied based upon your income from two years ago. So, they look at your tax return from two years ago and then based upon how much money you made, they then charge you a dollar amount for Part B. That once again supplements what’s on Part A, then you have the decision, do you want to buy a private plan or not? And 95% of people who do choose to buy a private plan, there are some incentives to do so because if you don’t, there are penalties later on and what have you. And those can range from $0 a month to $200 a month for a Cadillac plan. And the reason why an insurance company can only charge 200 versus the 800 when you are 64 years old is because they’re only making up what Part A doesn’t cover and what Part B doesn’t cover. You know what I mean? So, like you’ve worked your whole life for this stuff. When you choose to collect your Social Security check, that’s a big part of your guys’ financial plan. Also, whether you tap into this $500 a month benefit per person is entirely up to you. And what a lot of people don’t realize is they can do it while they’re working. They can do it after working. But a lot of people that are working, they might be paying $500 a month for a worse plan than what they have through Medicare. 


Matthew Peck: Well, and that’s the thing, Scott. So, let’s unpack that a little bit because I do want to go back to the penalties. I think the penalties, people, they always come in and penalties are there to motivate us, to incentivize us to get on to a plan when the insurance companies or when Medicare sort of, which is basically a government-run insurance platform, they’re pushing us and nudging us to do something. So, let’s talk about first is the income penalty, if you don’t mind, for our listeners and kind of explain that. And then also, I want to talk about the late enrollment penalty because we do have a lot of questions when it comes to, “Hey, Matt. Hey, Keith, I’m still working and I’m 66. What do I do? Do I go on to Medicare? Do I not go onto Medicare?” So, that’s what I mean. If you could just go into those two areas a little bit more. 


Scott Hokanson: Sure. So, the income penalty is the most frustrating one when I meet with people because once again they’ve paid their taxes, they’ve paid a percentage of their income, their higher income, their whole time but still, when they go on to Medicare, there is an incredible difference in what the monthly premium is for Part B. Once again, your Part A, which is free, but Part B has a variable premium based upon your income. If you’re a couple and you make less than $176,000 this year, the cost is $148.50 a month. 


Matthew Peck: Per person? 


Scott Hokanson: Per person. Right. Everything in Medicare is per person so there’s no couple plan. It’s always per person so everybody gets their own benefit. But if you make $250,000, that $148 grows to $328. If you make more than $500,000, then the price goes to $568. So, you can see they’re paying $400 a month, almost $5,000 a year for each of them. So, there are times where I sit with a couple and they might work off two different checking accounts. Mary’s income is higher than Joe’s income and Joe gets mad at Mary because he gets the penalty, too. And I say, “Listen, she comes as a package. You’re going to take it.” If you’re filing jointly, they look at your joining account.


Matthew Peck: So, about that, so literally two years – so let’s say someone retires at 63. They’re a CEO, whatever it is. Here they are at 63 earning a fair amount of income then they retire and at age 64, they earn nothing, let’s just say, for argument’s sake, but at 65, they’re paying the higher penalty because of that two-year… 


Scott Hokanson: Yeah. An even more frustrating example is what if they sold their lifetime house? 


Matthew Peck: Okay. Yeah. 


Scott Hokanson: One-time event. You know what I mean? IRAs counts it, you know.


Keith Ellis: There’s no exemptions for that. 


Scott Hokanson: There’s no exemptions. They sell a business. 


Keith Ellis: It is what it is. 


Scott Hokanson: I got one check, you know, and Uncle Sam got this huge chunk of that then two, you know what I’m saying, because they didn’t meet with you guys early enough. 


Keith Ellis: And they reassess that every year. 


Scott Hokanson: It does reset every year. It’s a one-year sentence. And I kind of use the one-year sentence as both a choice. I have essentially two types of products that we recommend to clients. One’s an advantage plan, which for all intents and purposes cost between $0 to $30 a month, depending on the county you’re in. A supplement, which would be the Cadillac plan, I guess, is $225 a month. So, there’s your variable. The zero-premium plan is endorsed by ARP. It’s UnitedHealthcare national network. I tried convincing people, I said, “Take the less expensive. It’s a one-year sentence. If you’re healthy and if you’ve got a ton of stuff and you’re fighting and you really want no referrals, great. Buy the Cadillac.” But 75% of my clients take that zero-premium plan, and next year we do the follow-up, they usually stay on it. It’s a one-year commitment. So, God forbid, my wife finds a lump and she really wants some more freedom from the Supplement plan. And that’s really the difference. We can go through co-pays. 


Keith Ellis: Correct. Correct. 


Scott Hokanson: The major difference is a supplement lets you go anywhere in the country that takes Medicare and the Advantage plans are going to limit you to a network of doctors. 


Matthew Peck: That’s interesting. So, Keith, kind of for all of our listeners it’s like an interesting kind of recommendation there and everyone’s situation is different and unique and all that stuff. But it’s more the idea that, okay, since it is really a one-year sentence, if for any of our listeners that are facing that, that penalty that one-year sentence and you’re in sort of penalty jail and paying significantly higher Medicare Part B premiums potentially take that year off, go for a lower-priced Medicare Advantage plan, which is you were saying, Scott. I look at some of these benefits too. Remember, as I was sort of coaching people on transition to Medicare, they say, “Oh, my goodness, it’s $25 a month. I mean, I must get terrible coverage.” And it’s like, “Whoa, you would actually be surprised that when you compare with the pre-65 plans or as you were saying, Keith, at the beginning kind of like normal health care that people expect, I mean, even these lower-priced Medicare Advantage plans are equal, if not better. 


Scott Hokanson: And they’re certainly better than what I’ve sold their employer, okay. And that’s why I’ve done health insurance for 27 years but I only started doing Medicare about six years ago. And that’s because even with the employer paying half the premium, anybody over 65 is usually better off leaving the employer plan and paying the whole premium themselves for Medicare. And the reason why is because for $148.50 that most people making under $175,000, that group of people, they get Medicare A and B something worth $650 a month out of their Social Security. They’re getting something of such value from the government. And once again, there’s one thing that everybody that’s on Medicare does every November. They vote. Okay. Nobody’s messing with this. So, when you talk about, is the plan good enough, the $29 plan? It’s not really 29. It’s Part A at $500, Part B at $150, and Part C, D, whatever you call it, whatever mine is at $29. So, you’re really at $670 a month plan compared to what their employer was paying $800 for. 


Matthew Peck: Interesting. 


Scott Hokanson: Then you have the government’s buying power that bought all this. Okay. Now, this creates an interesting question that we can talk about or not. So, why don’t we all do this? Why doesn’t Medicare just cover health insurance for everybody? Why don’t we have health insurance? 


Matthew Peck: Here we go. You’re going down a rabbit hole here, Scott, but alright. Go ahead. 


Scott Hokanson: The reason is because there’s a hidden tax that people don’t know about. Medicare doesn’t pay our doctors and hospitals enough. If a hospital only had Medicare patients, they’d be out of business. They don’t pay the hospital. They don’t pay Beth Israel here in Plymouth enough money to stay in business. So, Beth Israel has to charge Blue Cross, Tufts, Harvard, United Healthcare on the employer side more money. So, there’s another hidden tax out there for the working people that are paying for health insurance because Beth Israel has to make up the shortfall of Medicare by charging ABC employer more money. And that’s the frustrating part. That’s why national healthcare won’t work in this kind of stuff. But we’re not going down that rabbit hole like you said. But my point is that a lot of people think they have to wait until the end until they retire to access this plan or they’re super worried about these penalties. The penalties are voided 100% if you have creditable coverage. So, if you’re still working and you have good coverage, you do not have to leave your plan at 65. 


Matthew Peck: Well, and that’s this idea. So, now we’ve completely explained, and thank you for that, talking about the penalty of higher income and as you were saying, Keith, about they sell their home or what have you. All right. So, yeah, let’s talk about the late enrollment penalty. So, how does it apply? When does it apply? How do you avoid it? Because we definitely get a lot of questions on that. 


Scott Hokanson: Yeah. One of the things I’m most frustrated about my industry is we highlight this penalty relentlessly to people about approaching 65 and the not clear, there is an explanation, but if you have creditable coverage, the penalty is waived. The government is doing what it thinks is right, and it’s saying, “Listen, if you don’t do this, you can get penalized.” We want to help avoid these penalties so everybody gets worried about it. But the penalty is waived if your employer-sponsored plan is creditable coverage, which for 98% of people in Massachusetts if you have an employer plan based in Massachusetts, that is the case. One area where it might not be the case is if they’re on a health savings account. So, a health savings account simply has an automatic, they are compliant, they’re MCC compliant, but sometimes people think they’re on a health savings account but they’re on just a high deductible plan that is not technically a health savings account. And so, sometimes where somebody said, “Oh, I’m on HSA.” “Well, let’s look at that clearly, because if it is a licensed HSA plan, it is compliant.” But sometimes people are just on a high deductible plan, and in their mind, somebody told them it was HSA compliant or something like that and that’s where sometimes we see people getting penalties. 


Keith Ellis: So, if you’re listening to this and you want to reach out to Scott to get some help, visit Scott Hokanson is the owner/Medicare expert here joining us today. Scott, you just mentioned something that I think, whereas, I’m actually starting to see more and more folks as they come in, families that we’re working with come in, they’re actually saving this way, and that is HSA. So, I was wondering if you could expand on that, like maybe how they work, the power of them, the pros and cons because I really think they are available to folks. People don’t really know what they are. They don’t know if it’s an advantage to them. They don’t know if they should be taking advantage of it. And I think maybe in some cases or maybe in a lot of cases, they should be. 


Scott Hokanson: Sure. So, for instance, once again, I’m not the financial planner here but, to me, I think HSA is the second-best place to save money. 401(k), number one. If you’re working, an HSA, it has a triple tax advantage. The money goes in tax-free, it grows tax-free, and it comes out for the right reasons tax-free and the right reasons are medical. It has medical, dental…  


Matthew Peck: Qualified medical expenses.


Scott Hokanson: Section 213 of the IRS. 


Matthew Peck: There you go. Did you get that? Section 213, Keith. You write that down? 


Scott Hokanson: So, it’s the same list for flexible spending accounts, whatever else. But the way an HSA works, remember I said that most employers, an average employer pays $800 a month for a single plan. That single plan has a $2,000 deductible. A health savings account would only cost $600 a month and it has a $3,000 deductible but it has one big difference. That $2,000 deductible plan also gives you office visits for $25 and prescriptions for some co-pays. The health savings account does not. Okay. You go to the pharmacy and your drug costs $100. You pay $100 out of your $3,000 bucket that you have to do. But remember, you saved $200 a month. So, if you put that same $200 into your health savings account, you’re spending the same $800 you were before. Your net deductible is lower than it was before. And if you don’t spend it, you keep it. So, to me, you got two choices. You can give $800 to the mean ugly insurance company or you give them $600 and give yourself $200. Now, the negative is when you show up at the pharmacy and they ask you for $400, you have to have it. 


Matthew Peck: Be prepared to pay that bill.


Scott Hokanson: Be prepared to pay that. So, that’s the negative and that’s why a lot of my lower-income employees can’t afford to do this because they don’t have money in their paychecks at the end of the day. So, to me, a health savings account is seldom the sole solution for an employer, but I love it as an option. 


Keith Ellis: Yeah. It’s interesting because sometimes you’ll see people in a health savings account, but then they never realize that they’re supposed to fund the actual account. So, really what it is, it’s a way to invest your money or grow your money however you feel comfortable, market fixed rate. But you’re right, you’re putting money aside for you to use later in life. I’ve seen folks walk in with $50,000, $75,000, $100,000 in health savings account and they’re like, “Well, this is my Medicare premium or Medicare Supplement premium for the next however many years.” 


Scott Hokanson: Well, that’s just it. I’m at the stage now where I’m 49 years old so now I’ve got nieces, nephews, and kids getting jobs, and I’m now getting the calls from them. I had a nephew who took a job at a very large employer locally here that has amazing benefits. 


Keith Ellis: SHP Financial.


Scott Hokanson: You know, he was a C student. 


Keith Ellis: Touché, Scott. Well-played.  


Scott Hokanson: He wouldn’t make the cut here but he’s a hardworking kid and he maxed out his 401(k) and then he was looking at his health insurance. Of course, I get the phone call and he’s old enough to buy me a beer so I made him buy me a beer and bring it with him. And they matched half of the deductible. So, he had a $5,000 deductible but they also matched half of it. So, he’s getting $2,500 and he’s a 23-year-old invincible. 


Matthew Peck: Yeah, right. Absolutely. 


Scott Hokanson: I mean, he might break his leg skiing once every five years. So, I’m like, “Dude, just do this for five years.” 


Keith Ellis: Yeah. Put it away. 


Scott Hokanson: And then when you’re married, have kids, we may make a different decision. But even then, at that point, he’ll have, you know what? He’ll have $10,000 in there assuming no market growth, and he’s got a $5,000 family deductible. So, if he keeps putting the money in, he’d never hit his deductible again. So, like I said, now this is a responsible kid with a good job, good salary, and he can afford to put his $200 a month. It’s $50 a week for him to put into this plan. And he’s got one of those jobs where they send him off for six weeks and gets a week off so they’re paying all his living expenses, too. 


Matthew Peck: Oh, man. Where does he work? 


Keith Ellis: That is not SHP Financial. 


Scott Hokanson: That’s right. Exactly. But like he’s a safety guy, so he goes to projects. He’s doing clean-ups and he is a safety guy and just super interesting how with him before he has family or any other medical expenses I bet he’ll have $10,000, $15,000, $20,000 in that account. And put things in perspective. 


Keith Ellis: It’s a great way to start. 


Scott Hokanson: Yeah. My wife and I have five children. We use medical care. We’ve been on a health savings account forever. And after all of our expenses every year, I’ve still got a good amount of money in that account. Now, what my wife and I do differently is if it’s anything under $100, we just pay for it out of our regular checking account. 


Matthew Peck: And, Scott, definitely not to interrupt, I mean, that’s the one extra part of it because as you were saying, you can’t stress enough that the triple tax action here. You deducted on the way in, it grows tax-free, and then it’s tax-free on the way out. And my wife and I do something similar. Again, same idea, fortunate enough to do this but in the sense that everything, I think, what’s the family? Is it 7,000? 


Scott Hokanson: $7,500. $7,550 I think this year. 


Matthew Peck: Yeah. $7,550. So, Diane and I were putting in that full $7,550, and then for just odds and ends, we’re not dipping into that, the HSA, and just letting that $7,500, whatever, $7,550, whatever it is, accumulate and certainly hope continue to, obviously, it goes up and down the market. But that’s the part, Keith, that you said that I really want to make sure our listeners know and the question I get a lot is like, “Okay. So, it just sits in a bank account?” I’m like, “No, no, no, no. If you want to buy Amazon,” that’s not a recommendation, just saying, “You can buy Amazon stock. You can have a mutual fund. You can buy the S&P 500 index fund. I mean, you certainly should have some set aside in cash in case there is an emergency of emergencies.” But this is accumulating. This is investing. And so, it could just compound and you’re talking about your nephew. I mean, we all know I think it was Einstein or Franklin just talked about the beauty of compounding interest. I mean, that’s like the eighth wonder of the world or whatever it may be. I mean, imagine that. He’ll probably have $200,000 when he’s ready to retire. Sorry. Just to keep going on my soapbox but I figured that that Fidelity study where they’re saying like, “Okay. Most retirees are going to need like $250,000 to cover costs, deductibles and copays and whatnot.” And so, yeah, I mean, whether it’s a 22-year-old nephew or anybody that’s under 65 because I do want you to dig into that about how it’s a little bit different. It’s like you can only do the HSA until 65 and then… 


Scott Hokanson: You can only contribute more money into it. You can only contribute qualified money until 65. 


Matthew Peck: Okay. And then, Keith, you mentioned it too but it’s like what always confuses me is that so now let’s say your nephew did it. He’s now 65 years old. You can use the HSA money for Medicare Supplement or Medicare Advantage or it’s one of the other, right?


Scott Hokanson: Medicare Advantage. 


Matthew Peck: Only Medicare Advantage? Okay. 


Scott Hokanson: Not the Supplement. So, the Cadillac plan, you’ve got to pay with post-tax dollars. 


Matthew Peck: Okay.


Keith Ellis: But you can imagine as you get older, things are going to happen. You’re going to need that money most likely. 


Matthew Peck: Yeah. You’re still going to use it. 


Scott Hokanson: Deductibles, co-pays. And let’s say you use it for the wrong reason. You buy a 1970 Corvette like some people have done. All right. And you pay your taxes plus a 10% penalty. So, it’s like a 401(k) penalty or something like that. It’s not like you don’t have access to the money. The taxes you haven’t paid plus a 10% penalty. So, it’s still your money. It’s not the government’s money. It’s not your old employer’s money. Health savings account is your money. It goes into your account and you are vested 100% day one in any HSA deposit. 


Keith Ellis: So, as you can see, Scott is very well versed. Matt and I over here scratch our heads in this industry. So, again, to get a hold of Scott and if you are looking for help on Medicare health insurance, business health insurance, this is where he is focused. This is what he’s been passionate about, him and his team, for 27 years. Scott, we’re going to transition here. So many times, folks come in and say, “I am on this drug or that drug, and the cost is through the roof.” Why are prescriptions continuing to just be more and more expensive? I know Medicare, they have a plan as well. It’s Part D. Am I correct there? 


Scott Hokanson: Part D, yep, which is included in the Advantage plans that I use. 


Keith Ellis: So, why are they – go ahead.  


Scott Hokanson: Yeah. So, it’s tough. The prescription plans on Medicare are just as bad as the prescription plans that I have for employer-based coverage. 


Matthew Peck: Okay. So, no one is safe basically. 


Scott Hokanson: Nobody is safe. 


Keith Ellis: Target on everyone’s back. 


Scott Hokanson: So, I’m 49 years old and I have arthritis. I have moved from Humira to Enbrel so I’m now on something called Taltz. Taltz is over $2,500 a month. So, if I retired today and I had to go on Medicare, I would be hit with the donut hole. Donut hole is a couple of thousand dollars a year that you get hit with if you’re on expensive medications. So, one thing that you should always be doing when you’re considering, if you have access to employer coverage and you’re considering transitioning to Medicare, I’m happy to do it for you or you just go on, you put your actual meds in and it spits out what your out-of-pocket costs will be both for premium and for out-of-pocket costs, co-pays, and deductibles and what have you. The site is awesome. And the clients of mine that have 20 medications, it actually creates a little number for you so you never have to type that in again. You just type in that number and it repopulates to those 20 medications. And I tell you, when we’re in that position, I had a situation where there’s a gentleman on the Cape and he just happened to use CVS and he had a couple of expensive meds. It was just a killer for him and he was retiring. He didn’t have access to any of the coverage so we had to do Medicare and we’re looking at different options. 


But the town he was in was in Falmouth. I’m like, “Listen, let’s just click off every pharmacy as an option.” And for some reason, Walgreens, and I don’t mean Walgreens versus CVS one being cheaper than the other, but in this particular instance, there was a different national pharmacy that had a better contract for that drug than the one he was going to, and it saved him about $250 a month. You know what I mean? So, it was real money and it was just like just doing that exercise and clicking a couple of extra boxes. If we hadn’t done that, it was one of those things where I had to email our team. I said, “Listen, guys, from now on, we’re not asking people whose pharmacy it is. We ask their town and click them all.” You know what I mean? 


Keith Ellis: Yeah. It’s your job to find the best. 


Scott Hokanson: I used to ask people, “What pharmacy do you like to use?” “I don’t care.” Like, I would say CVS on Pilgrim Hill Road in Plymouth but there’s literally a Walgreens across the street. 


Keith Ellis: Which one’s cheaper? I’m going there.


Scott Hokanson: Let’s click them all. Just click them all. 


Matthew Peck: And also, is that the same with mail order or no? 


Scott Hokanson: Sure. Mail order help. And once again, you can have a mail-order contract through Express Scripts or SilverScript or something else like that so that would automatically be in there. So, the way the drug programs work is you’re hiring one drug company to manage both your retail and your mail order. So, you might be forced to use mail order, depending on some insurance companies, whether people like that or not. But the CVS and Walgreens have gotten better. They’re now letting you dispense 90 days at the site for one copay. 


Matthew Peck: Oh, interesting. Yeah. 


Scott Hokanson: So, the market’s reaction to that. But I just encourage you, if you go on and you get stuck with some of those high out-of-pocket expenses, a nice little trick is go back to the first page and don’t click your one favorite pharmacy. Click your town and click stop and shop. 


Keith Ellis: Heck, I’ll go to the next town if it’s going to save me $250. 


Scott Hokanson: But like click any of these 20 pharmacies and you’ll see and I can’t say this enough and this is especially true for, I’m sure a lot of your clients, Vietnam-era veterans have a very unique relationship with the VA. And I can only appreciate that and I can understand it. They had a very different experience than I think a lot of the Afghanistan veterans have. And lots of times I’ll meet with people, I’m going to get emotional here, a lot of times I’ll meet with veterans and they don’t want to use the VA. And they should. You earned it. You deserve it. And lots of times they can do it through mail but have your wife go pick it up. If you don’t want to show up there because of what happened when you came home, we understand but you’ve earned it. And lots of times the VA, especially people in those situations that are on difficult medications, you might be able to get them free from the VA. And once again, the Vietnam-era vets have a very unique situation, and I’m not old enough to understand. My father is a veteran and that’s a very unique relationship. I understand it’s not as positive as it should be, but they have access to, you know, they can get you the Enbrel for free. And viewing it as you’re sticking it to them for $250 a month so, like I said, if you have a veteran and you ask them if they utilize their VA benefits and they say no, just try and talk to him about it. Again, I can only convince people to do so much. 


Matthew Peck: But it does show, and I’m sorry to interrupt, Scott. It’s obviously an extremely important point. So, it really is multifaceted. So, you have veterans and they have their choices. They have the VA system or they have potentially Medicare. And whether or not they’re veterans or not, then you have people that are still working, and then they’re also kind of in a specific situation because they should look at, “Okay. Are the prescription drugs covered under the Medicare system or should I stay on my employer plan?” So, it’s like really everyone is such in a unique and then as you mentioned about what prescriptions they take are impacted by what pharmacy they go to and whether or not they do mail order. 


Keith Ellis: Not the easiest thing. Call Scott.


Matthew Peck: That’s what I want to kind of try to put a bow on in the sense of like, I guess, it’s just because at the very beginning, Keith, you mentioned about, okay, where does someone start? I mean, is there any really kind of like nice general rule of thumb besides calling Scott? You’re absolutely right as to how people approach this situation or is it really, truly unique and everyone has to find their own path? 


Scott Hokanson: Yeah. Obviously, we’re here to help. Let me preface that. We’re here to help for SHP clients. I don’t take appointments off the street. Okay. I take appointments from referral partners, clients. So, that is a very important distinction. So, you call our office and you say you’re an SHP client, then you get access to me. But a really good place to start is that site and put your prescriptions in if you’re on a lot of medication. If you’re on heart medication, cholesterol, you’re good. But if you’re on something unique, do that site and put your prescriptions in and see what you’re up against because that could be a couple-of-thousand-dollar hit. You’re hit. Then also google Medicare income penalty and you’ll understand better about Part B. And I should have brought this part up earlier. We are going to bombard you. We, being the insurance, we’re just going to bombard you about these penalties if you don’t enroll in Part B when you’re supposed to and there’s a 10% penalty per year, all the stuff. If you stay on employer coverage, you should not elect Part B. 


So, as long as you have creditable coverage, ask your HR person, send it to me and I’ll tell you whether you have it or not. But if you have creditable coverage and you’re staying on it, there’s absolutely no reason for you to elect Part B. And people do it out of fear because they got the penalty. They googled penalties and all this kind of stuff. They don’t want them. I just transitioned somebody, a couple, from employer coverage to he retired, October 1st, and I have to get their Part A and Part B effective date. And they both had their Part B effective date of January 1st. They wasted $300 a month for nine months. And like they hadn’t called me in the fall and whatever else. 


Keith Ellis: Let me guess, the government gives it right back to them. 


Scott Hokanson: No. It’s gone. And it’s so frustrating. Especially higher-income folks, to be that successful, sometimes you have to be a type-A personality. You don’t read the fine print as much. “I have to do this. Press the button.” 


Matthew Peck: “I have to get it done.” Right. 


Scott Hokanson: So, they end up paying $500 a month for something they get no benefit from because your employer coverage is always primary. Another good point is you’re over 65. Your spouse is not. That spouse, if you ever opt off your plan and you’re covered by employer coverage, you going onto Medicare entitles your spouse to 36 months of COBRA versus just 18. So, if your qualifying event was you leaving the employer plan and going onto Medicare, your wife can stay or your husband can stay on the plan for 36 months. So, then that spouse who’s 62 has two choices, COBRA or a marketplace solution from a guy like me, which is going to be close to $800 a month for a $2,000 deductible plan. 




Matthew Peck: I already wrote that down, Keith. It’s something else he learned something new. So, obviously, Scott, thank you so much for coming on. I mean, you could tell and hopefully, you can come back again because I think we barely scratched the surface honestly on one of these issues. I mean, we were even talking about the wormhole of nationalized healthcare or why our system is as sort of dysfunctional as it is. I mean, there are so much other areas to get to and I think even the whole penalties and how you avoid them and what’s creditable coverage again. I mean, I think those are just such amazing and great information for everyone to have, and just being able to synthesize it and kind of just really get it to just easily understood is just so important. So, thank you so much personally, and I can’t wait to have you on again. 


Scott Hokanson: Thanks a lot.

Keith Ellis: Thanks so much, Scott. Take care.

No statements made during the Retirement Road Map® podcast shall constitute tax, legal, or accounting advice. You should consult your own legal or tax professional on any such matters. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies.  Investments involve risk, and unless otherwise stated are not guaranteed. Our Investment Advisory Services are offered through SHP Wealth Management LLC., an SEC registered investment advisor.  Insurance sales are offered through SHP Financial, LLC.  Our advisors and insurance reps may offer clients advice and/or products from each entity. No client is under any obligation to purchase any insurance product.

The content presented is for informational purposes only and is not intended as offering financial, tax, or legal advice, and should not be considered a solicitation for the purchase or sale of any security. Some of the informational content presented was prepared and provided by tMedia, LLC, while other content presented may be from outside sources believed to be providing accurate information. Regardless of source no representations or warranties as to the completeness or accuracy of any information presented is implied. tMedia, LLC is not affiliated with the Advisor, Advisor’s RIA, Broker-Dealer, or any state or SEC registered investment advisory firm. Before making any decisions you should consult a tax or legal professional to discuss your personal situation.Investment Advisory Services are offered through SHP Wealth Management LLC., an SEC registered investment advisor. Insurance sales are offered through SHP Financial, LLC. These are separate entities, Matthew Chapman Peck, CFP®, CIMA®, Derek Louis Gregoire, and Keith Winslow Ellis Jr. are independent licensed insurance agents, and Owners/Partners of an insurance agency, SHP Financial, LLC.. In addition, other supervised persons of SHP Wealth Management, LLC. are independent licensed insurance agents of SHP Financial, LLC. No statements made shall constitute tax, legal or accounting advice. You should consult your own legal or tax professional before investing. Both SHP Wealth Management, LLC. and SHP Financial, LLC. will offer clients advice and/or products from each entity. No client is under any obligation to purchase any insurance product.
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