Your LGBTQ+ Inflation Action Plan; Plus Prescription Drug Costs w/Antonio Ciaccia of 46brooklyn

TPIR Ep 96 Full Show.mp3: Audio automatically transcribed by Sonix

TPIR Ep 96 Full Show.mp3: this mp3 audio file was automatically transcribed by Sonix with the best speech-to-text algorithms. This transcript may contain errors.

Speaker1:
Any examples used are for illustrative purposes only, and do not take into account your particular investment objectives, financial situation or needs and may not be suitable for all investors. It is not intended to predict the performance of any specific investment, and is not a solicitation or recommendation of any investment strategy.

Speaker2:
Welcome to Take Pride in Retirement, the podcast dedicated to helping members of the LGBTQ+ community protect and grow their hard earned money. Get set for a show full of education and insights with your host and advisor, Matt McClure. We recognize every family is unique. The goal of the show is to help you achieve financial freedom so you and your loved ones can have the retirement you've always dreamed of, a retirement you can take pride in, no matter who you are, where you're from, or who you love. So now let's start the show. Here's Matt McClure. Hello there.

Speaker1:
And welcome to another edition of Take Pride in retirement. Matt McClure here with you, your host, your advisor, your friend, your pal and your confidant. Thank you so, so much for being a part of the show. I say it every time because I mean it. All right? Uh, this time around, talking about more about inflation, we sort of set things up. Did the setup in the last episode talked a little bit about how you can react to inflation, but more importantly, plan for it. That really is the important part, not necessarily the reaction. So you can be proactive and not reactive. Boy, will that make a big difference in your life in general. But you know, especially when planning for inflation because that's the subject of what we're talking about. Um, so we're going to talk more about that. We're also going to talk about pharmacy benefit managers a little bit. Find out why you pay so much for some prescriptions. Um, it's a very insightful interview. So we'll talk about that in just a few. But I have to say, of course, whether you're watching on YouTube, hello, you're listening on the podcast and you can get it wherever you listen to podcasts, uh, on any of the big platforms and on some little ones too. Wherever you get your podcasts. Boy, I thank you so much for listening to the show for, um, you know, just being a part of what I hope becomes just this huge, huge movement of LGBTQ plus people taking control of the things that they can control.

Speaker1:
There's so much craziness in the world. There's so much stuff that goes on, um, that we can't control. Give yourself some peace of mind by taking control of the things that you can. And one of the things that you can control is your retirement plan. Look toward that future with pride, with, um, anticipation, not with dread, and with this feeling of, boy, I don't know what in the world's going to happen. That doesn't do anybody any good, right? Just that feeling of of dread. Of just not being prepared, not knowing what to expect. Create a plan that is going to. Really fill that void for you and give you that peace of mind. And that's what we can do when we work together. I am someone who is a financial advisor. I operate in a fiduciary capacity, so that means I have to act in your best interests if we work one on one. The show here, of course, is just for educational purposes. But if we work one on one together or one on 2 or 1 on three or whatever the situation might be, um, I act in a fiduciary capacity, so I have to act in your best interest, not my own. And that may come as a surprise and relief to anyone who's worked with some other financial people in the past, perhaps.

Speaker1:
So we're going to talk about action. Like, like basically the last show, the last episode was, um, about awareness basically of inflation, what it is, why it is, uh, and a little bit about action. But this show is going to really be focused on action this time around. Speaking of action, the big action that I want you to take before we sort of dive right in here is go to take pride in retirement. What can I do there, you might ask? Well, you can sign up for a free consultation. You can schedule that consultation there. You can go to the page that says get your plan. We can send you a free e-book that's all about, you know, smart planning for retirement. It's actually called the Smart Retirement Plan. I wrote the afterword for that book and I am very proud of that. So at least feed my ego a little bit. Um, no, I'm kidding about that part. But it's really full of a lot of helpful information. We'll send it to you free of charge. No obligation there either. You just sign up and, uh, you know, give give your contact info and we'll be in touch and give you that free e-book. You can also give me a call 855246 9211 (855) 246-9211. Is that number? Uh. Reach out if you'd rather just reach out to me on the phone. If I don't answer, I'm probably like, you know, either meeting with a client or I'm recording the show or something like that, you know? So, um, I'll get back to you just as soon as I possibly can if you leave me a message.

Speaker1:
And by that I mean message, not a massage. Of course, if you want to give me, like, a gift card for a massage or something. Hey, great. Kidding. Only kidding. Um, but we're going to talk a lot about inflation. Again, as I've been saying, not just about groceries like we talked about last time. It's not just about how much you pay for the eggs. Um, it's about how you design your income in retirement. Well, we'll delve into that as time goes on here. We'll also talk about prescription drug pricing and PBMs. Health care inflation is real. You're paying more for your not only prescription drugs, but you're paying more for healthcare overall. And so we'll talk about that. And I've got a really insightful interview coming up about it. First what we're going to do though is, you know, talk about ways that are either, you know, things that you can do to, uh, plan for inflation, maybe a little bit to react to inflation or things that are automatically built in to a particular retirement income source that are supposed to help you shoulder the burden of inflation. And I'm talking about cost of living adjustments with that last example, cost of living adjustments in Social Security.

Speaker1:
So in 2026, Social Security recipients got a 2.8% increase in their monthly benefit from Social Security, 2.8% based on the average Social Security monthly benefit. That's about 56 bucks a month on average, give or take. And so is that is that helpful? Yeah, sure. It's any any increase is helpful obviously. You know but is it complete protection against inflation and the actual rate of inflation. No it's absolutely not. Because, you know, it's based on the consumer price index for workers, not consumer price index for retirees. That's one reason. So does it always match up with what the increases are that you're actually seeing as a retiree, someone who would be receiving a Social Security benefit. And so that reflects the CPI. W so it's consumer price index for workers. That's what the consumer price index is used. Which specific gauge is used to. Um they take that measure of inflation and then they say okay, that's the number that we're going to put on the increase for Social Security benefits for the Cola. So retiree expenses though, especially when it comes to things like health care, often rise faster than that. And so there is a CPI experimental index. Uh but that's not used for Cola. And that would take other things into account. Right. So we'll have to see if maybe one of these days or years, uh, they change the way that that's indexed for inflation, the way the Cola is, is measured for inflation.

Speaker1:
But many in our community and the LGBTQ plus community do rely heavily on Social Security, because you've been maybe if you're single in retirement, you've been in a single income household for a long time. And that is a a huge thing to consider. You know, the survivor benefit coordination is absolutely critical if you have a two income household, but maybe one of you makes a lot more money than the other. That sort of thing. That's something to really take into consideration as well. And spousal planning of course, these days is very much essential. We are, you know, more than ten years past the, um, the decision, the Obergefell decision by the Supreme Court that legalized same sex marriage across the country. And the thing that you have to realize, anytime we talk about Social Security, I have to emphasize this. It is a foundation. It is, you know, the foundation, really, of retirement income, but it's not a full plan and it was never intended to be a few weeks ago. I you know, I mentioned a quote by FDR, um, on one of the earlier anniversaries of Social Security back in the late 30s, I believe it was when he said something to this effect that nobody's going to get rich off of Social Security. That is not the point. The point is, it provides that sort of, you know, basis of being able to take care of yourself, being able to pay the bills and not fall into poverty because the, you know, poverty rates among the older population were really a lot worse back before the days of Social Security.

Speaker1:
So it's really protection from poverty, which is not only good for the individuals, good for the families, but great for society as well. We have fewer people in poverty than we otherwise would have because of that. So Social Security is a foundation. It's not a full plan. So if you want to see how your Social Security falls into your full plan, then, you know, give me a call 85524692 11 (855) 246-9211. You can also go to the website take pride in retirement. Com I'd appreciate that if you would do it now um I will also say I am a registered Social security analyst. That means I have taken the time to get educated about Social Security, uh, taking, uh, these courses and gotten my certification as an RSA registered Social Security analyst, which means I'm able to provide you with a custom report about your Social Security benefit and or benefits if you are married. And so I can tell you, you know, when might be the optimal time to claim Social Security based on both of your incomes and the projected benefits and all that stuff provide you with this great report. It's absolutely free. And, uh, if you would like that, don't hesitate to go to take pride in retirement comm, take pride in retirement.

Speaker1:
Com or call 9211. So one of the biggest costs, um, that retirees will face is for healthcare. Obviously, we get older, the body breaks down. We have to shell out more for healthcare. It's just the way things go. And so healthcare inflation really does hit hard, right? Prescription drug pricing is a big part of that. So PBMs, their pharmacy benefit managers control a lot of what you pay at the pharmacy counter. And so a lot of LGBTQ plus retirees have, you know, maybe HIV medications that you got to pay for, maybe hormone therapy, mental health prescriptions, all of that stuff. So the out-of-pocket costs here really do matter. Well, prescription drug prices are pretty much a constant source of frustration for millions of Americans. But the real power behind those prices often operates really out of sight. Pharmacy benefit managers or PBMs now control most prescription drug coverage in this country. And according to some new research, some of the largest PBMs have gone a step further, launching their own private label drug companies and setting their own prices. Joining me now to talk more about it is Antonio Ciaccia. He's president of 46 Brooklyn Research, and he's going to help us understand why this is happening and what it means for consumers. Antonio, thank you so much for taking some time. Really appreciate it.

Speaker3:
Thank you for having me.

Speaker1:
Well, so for listeners who might not be familiar, what exactly does a pharmacy benefit manager do and how did PBMs become such a really powerful force in prescription drug pricing?

Speaker3:
Think of PBMs as the insurance for your medicine. The PBM ultimately determines which drugs will be covered under your benefits plan, and they will determine which pharmacies you can go to in order to get discounts on your medicines. They have a tremendous amount of power. They were brought in years ago as claims processors. Essentially think of them as the credit card for your medicine of sorts. If your medicine is covered, they decide how much the pharmacy will be paid and how much you'll pay out of pocket. Over time, we look to PBMs to negotiate prices to say, look, drug companies and pharmacies, your prices are too high. The PBM will work to negotiate discounts off of those inflated prices and hopefully lower the cost of the plan and the patient, which sounds great, right? And fast forward the tape. The PBMs have been very successful. They're now larger than the drug companies and pharmacies they were hired to control. But just like everybody else in the drug channel, they too have mouths to feed. And so while they are very successful at getting discounts, they're not necessarily as good as passing those discounts back through. So we're seeing more and more instances where PBMs are now part of fortune 15. Vertically integrated health companies are actually exacerbating a lot of the pricing problems they were hired to control.

Speaker1:
Wow. Yeah. And as we see in our wallets getting lighter each time we go to the pharmacy. Pretty much. And your latest research here, I kind of said in the beginning at 46, Brooklyn research shows that these major PBMs are now launching their own sort of private label drug companies in in sort of plain terms. What does that mean?

Speaker3:
What it means is that if a drug company ultimately negotiates with a PBM in exchange for coverage under our benefit plans, the PBM, let's say let's pretend they weren't playing games with prices. They want to try and drive the hardest bargain possible. They want to negotiate the lowest amount possible to pay that drug company for that medicine. Well, so just like PBMs started their own mail order pharmacies years ago as a mechanism to to provide savings to benefit plans and patients, eventually they decide, hey, we can make money off of this. And so most PBMs, when they negotiate contracts with employers or Medicare plans, they say, look, we're going to give you an 80% discount off the list price of a drug. Well, that sounds great, right? Who wouldn't want an 80% discount off the list price. But by now owning their own drug companies, now they get to set the list prices of these drugs. So they might set an 80% discount guarantee to give to the patient and the plan. But if they could control the sticker price, well, they can devalue it. So think of it this way. Let's say your cup of coffee costs five bucks, and you hire me to be your coffee benefit manager. And I tell you, I'm going to give you a 50% off. I'm going to cut your coffee costs in half. Would you take that deal? Absolutely. Because at least on its surface, you say, I'm going to pay $2.50 instead of the $5 I'm used to. Well, once we sign that contract, let's say I walk away and I purchase a coffee company. And now I set the list price of that coffee at $15. Now your $5 cup turned into $7.50. If I'm honoring that same discount but inflating the sticker price, that is exactly what's happening with PBM. Private label products where they own the drug company and set a list price that can undermine the the guarantees that they've offered to their clients.

Speaker1:
Wow. So on the surface, it seems like you're getting a good deal, but you're you're really not. When it comes right down to it. And, you know, a lot of these these PBMs, they're connected to big companies like Cigna, CVS, UnitedHealthCare, and they together influence most of the prescription drug prices. There's a lot of concentration there. And so why is that concentration such a big concern. I mean, would it have to do with lack of lack of a lot of competition, I guess, at least in part.

Speaker3:
Absolutely. I mean, you have what's really an arms race. Uh, the largest PBMs, three of them make up over 80% of all transactions. But they're part of large, vertically integrated healthcare companies that have thousands of subsidiaries underneath their corporate umbrella. They have, uh, group purchasing organizations who negotiate contracts with pharma on PBMs behalf, essentially making three companies responsible for 95% of all transactions and essentially deciding which drugs will be covered under benefit plans and not. So there's a weird system where drug companies and PBMs have exemptions to federal anti-kickback laws that allow drug companies to pay big money to PBMs and their gpos in exchange for covering or favoring medicines under our benefit plans. If what I said sounds complicated, let me simplify it. The drug companies get to pay off the PBM to determine which drugs we take under our benefit plans. And since all the prices in the US are inflated, we really have little choice but to use the PBM and take whatever medicines they decide will be covered under our plan. Otherwise, we're exposed to exorbitant costs that are even worse than what the PBMs are providing today.

Speaker1:
Wow. And what can be done to change this? I mean, you know, is it is it something that boils down to just, you know, it's going to take legislation, it's going to literally take an act of Congress to to change this system and how things are working right now.

Speaker3:
Yeah. I mean, at the end of the day, public policy has been has failed to constrain prices, meaning that the United States suffers from the highest list prices of drugs in the world. And as a result, it creates an overreliance on someone to negotiate essentially a lower price. Be clear PBMs are saving a ton of money relative to the inflated prices charged in the US, but that isn't really a Herculean task. The prices are so high it's easy to save money. The question is, how can we decrease our reliance on PBMs so that they ultimately have to earn their their value, rather than essentially be an essential tollbooth in order to provide some sort of rational pricing at the pharmacy counter. We need a lot more transparency, and we need a lot. We need to reduce the conflicts of interest. Pbms should not be getting paid by drug companies in exchange for favoring their medicines under benefit plans. So there has to be an entirely different approach to how we govern the pricing of pharmaceuticals in the United States. And it starts with a strategy centered on low list prices instead of inflated ones in big discounts.

Speaker1:
Yeah, well, just about time for us to wrap up here, Antonio. But anything else that you wanted to touch on that comes to mind, or maybe where listeners could go for more information.

Speaker3:
The big thing I would stress to your listeners is if you face sticker shock at the pharmacy counter, talk to your pharmacist. If you do not have a relationship with your local pharmacist, I suggest you get one. Shop around if there are. If you see a high sticker price at the pharmacy counter, look for alternatives. Different pharmacies look for cash pay options. Look for folks like Mark Cuban Cost Plus drug company, where you have opportunities to get lower priced medicines than what you might get through your insurance. If you're interested in learning more about our convoluted system and want to become a drug pricing nerd, you could learn more about our work at 46 brooklyn.com.

Speaker1:
I love it 46 Brooklyn. Com if you want to become a drug pricing nerd. Uh, Antonio Ciaccia is the president of 46 Brooklyn. Antonio, thank you so much. I really appreciate your time.

Speaker3:
Thanks for having me.

Speaker1:
So you see, their health care inflation is not theoretical. Um, it shows up at the pharmacy counter even. And so you're planning has got to include prescription modeling, insurance reviews, cash flow buffers, all the things that need to go into your plan I can help you with as we take health care costs and the rising health care costs out there into account, when we plan for you, come up with a plan specifically for you in your retirement. All right. So we've been talking a lot about inflation these past couple of episodes. And I want to bring it all home, tie it up in a nice little bow with okay what do you do about that. Well, there are a couple of things that you can do more than a couple really, because inflation proofing is not just like, okay, if I invest in this one magical thing, I don't have to worry about inflation. No, I mean, there are some things that you can do to really, um, take care of a lot of that burden. It just it takes planning. It takes knowing what you're doing. First of all, it takes working with, I believe, a trusted advisor. Hint, hint myself. If you would please reach out to me, I'd appreciate it. Uh, take pride in retirement. Um, and I can walk you through this, but we have some sort of investments that are out there that are, uh, inflation linked. Right? Uh, that adjust for inflation. Uh, that could be a very useful kind of a thing.

Speaker1:
So one of them is called, uh, Tips. It's that's the acronym. It's Treasury Inflation-protected securities. Treasury Inflation-protected securities. Um, and also I bonds are kind of a similar thing. Those are things that are adjusted for inflation and so they help you keep up with it, right. So that's one thing. There's also a strategy that we use quite a bit with our clients. And that is a growth allocation within your portfolio. So you know stocks will historically outpace inflation in the long term day to day. You don't know right. Week to week, month to month you don't know. But we're talking long term. Over the years stocks generally will outpace inflation. We've seen that historically. And we anticipate that to continue in the future over the long term. But the thing is, you can't let that day to day or week to week or even month to month get to you. You can't let emotional investing destroy your plan. You've got to stay disciplined. And part of that is having a part of your portfolio that is dedicated or allocated to stocks that are, you know, in in growth mode, right. Those are, you know, these growth stocks, these, you know, sort of stocks that are anticipated to grow over a long period of time. Now everybody's asset allocation is not going to be the same. It's based on a whole lot of different factors. You might have, you know, stocks that are intended to grow, some stocks that might be, um, you know, slower growing that might not have as much risk involved.

Speaker1:
Um, you know, it just depends on you, your risk tolerance, your age, all of the things. Right? All of your goals in retirement, how much you want protection versus how much you want growth, all of those things. But the bottom line is you got to stay disciplined and you've got to stick. You got to work the plan. What is it? Plan the work and work the plan, I guess, is is a thing. Uh, or you've got to make the plan and then you got to stick to it. Right. And also you need to coordinate your income sources. And so you need some guaranteed income in retirement. That's kind of a biggie, right? So you need, um, number one to have you a plan for your Social Security, or at least an idea of what your Social Security is going to look like. Again, if you want to go over this report that I can, uh, generate for you, it's called an RSA roadmap. Um, reach out, take pride in retirement, take pride in retirement. I'll do that absolutely free. And we can come up with kind of an optimal scenario for you. But and there are thousands of decision points, by the way, when it comes to Social Security, most people don't realize that. And we'll talk about it. I'll open your eyes to that.

Speaker1:
So, you know, you got to have some sort of idea of what Social Security is going to look like, because that's going to be, uh, one of the big income sources for you. Also, when you look at, you know, down the road as well, what other income sources are you going to have in retirement? Do you have a pension from your workplace? Chances are the answer to that is no. Can you create a personal Pension for yourself instead. Chances are, the answer to that is yes. Uh, you know, you can take money that you've got in a retirement account, like a 401 K for three b tsp if you're a federal employee at IRA, any of those type things and put that in something called an annuity. There are different kinds of annuities out there. I only work with, you know, high rated annuity carriers and providers and, you know, those that, um, you know, have good reputations and good financial footing. The only ones that I trust my clients money with. And so if you want to learn more about that and how you can take that lump of money, invest it into an annuity that could offer some market like growth without the market risk, first of all, and then offer a basically a pension that's income for life for the rest of your life in retirement. Also, give me a call or go to the website. Take pride in retirement comm. So you also have to think about your different tax buckets of money.

Speaker1:
You know you're taxable you're tax free or tax deferred. Are those buckets. Do you have enough in each of those. And that answer could be different for everybody. There are sort of general ideas and guidelines. But that number could be different for everybody as well. And so you've got to make sure that you sequence those withdrawals in the most tax efficient way. Generally we like to let what's in a Roth, which is a tax free account. We like to let that grow as long as possible. So then later on when you need that money, you can make those withdrawals tax free and you sort of maximize that tax free bucket. So, you know, protecting your purchasing power also protects you and it protects your independence as well. So the thing is, I mean, you've got to think not in, as I was saying a few minutes ago, not in days or weeks or months, but in decades here. And so you've got a 20 to 30 year retirement to look at. Even more than that possibly. Um, health care costs rise later in life. So you've got to make sure you have a plan for that. Don't just focus on the today or tomorrow or the next week. Focus on the years and decades from now, and your spending doesn't just magically disappear at any point in time either. You got to plan for it, and you've got to make sure that you have plans in place that are going to last and stand the test of time, no matter what.

Speaker1:
So if you're planning just sort of year by year, month by month, day by day, week by week, whatever, that's short sighted, right? But if you're planning decade by decade, then you're building a resilient plan for yourself, and you're controlling the things that you can control. The thing is, like, you know, I've been reminded especially this past week, that our LGBTQ plus community has fought so hard for financial security to let rising costs chip away at that. We've come too far to go back now, right? And so if you want a retirement income plan that's built around you and your life experience and your station in life, your relationship status, your healthcare realities, your chosen family. Go to the website. Please take pride in retirement its take pride in retirement. Com or call 855246921185524692 11. And we can build a strategy that is designed to protect your purchasing power as long as you live and give you peace of mind for the decades long retirement that you want to enjoy and be able to take pride in. Well, that's going to do it for this edition of the show. Thank you so much. I really do appreciate it each and every time we get together. And until next time, take pride in yourselves and take care of each other. We'll see you then.

Speaker2:
Thanks for listening to Take Pride in Retirement. Members of the LGBTQ plus community deserve to work with a fiduciary financial advisor who puts their needs first. To schedule a free, no obligation consultation with Matt McClure and the team at Active Wealth Management, call 9211 or go online to take pride in retirement investment advisory services offered through Brookstone Capital Management LLC, a registered investment advisor. Bcm and Active Wealth Management Incorporated are independent of each other. Insurance products and services are not offered through BCM, but are offered in sold through individually licensed and appointed agents. Matt McClure, an active wealth management, are not affiliated with or endorsed by the Social Security Administration or any other government agency.

Speaker1:
Registered investment advisors and investment advisor representatives act as fiduciaries for all of our investment management clients. We have an obligation to act in the best interest of our clients and to make full disclosures of any conflicts of interest. Please refer to our firm brochure. The advertised item for. For additional information, any comments regarding safe and secure investments and guaranteed income streams refer only to fixed insurance products. They do not in any way refer to investment advisory products. Rates and guarantees provided by insurance products and annuities are subject to the financial strength of the issuing insurance company, not guaranteed by any bank or the FDIC.

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