09.29.25 This Open Enrollment Is Different / A Good Climb: CD Ladders

It’s almost time to choose health insurance for 2026 and there are some significant changes coming with medical care. Clark has important info you need to know ahead of making your elections for open enrollment. Also, interest rates are up in the air right now. Is now a good time to open a CD and/or CD ladder with predicted interest rate cuts? Clark offers a defensive strategy for the money you save. Attention: Open Enrollment Changes: Segment 1 Ask Clark: Segment 2 CD Laddering : Segment 3 Ask Clark: Segment 4 Mentioned on the show: NYTimes: Health Care Costs for Workers Begin to Climb Spot Health Insurance Scams | Consumer Advice Is it health insurance or a medical discount plan? More employers adopting ICHRAs, giving workers money to buy their own health insurance Why Clark Howard Switched His Cell Phone Service After 18 Years With T-Mobile Internet Price War: Why Now Is a Good Time To Threaten To Cancel Wirecutter: How to Avoid a Huge Customs Bill on a Cheap Online Order What Is a CD Ladder and When Is It a Good Idea? CD Ladder Calculator - Clark.com 17 New Cell Phone Deals in September SIM Card Swapping: The Dangerous Cell Phone Scam Why You Need To Lock Your Phone Number Today Clark.com resources: Episode transcripts Community. Clark.com / Ask Clark Clark.com daily money newsletter Consumer Action Center Free Helpline: 636-492-5275 Learn more about your ad choices: megaphone.fm/adchoices Learn more about your ad choices. Visit megaphone.fm/adchoices

• 0:01Speaker 00

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• 0:29Speaker 01

  Your sausage McMuffin with egg didn't change, your receipt did. The sausage McMuffin with egg extra value meal includes a hash brown and a small coffee for just $5, only at McDonald's for a limited time.

• 0:42Speaker 02

  Price and participation may vary. Promotion pricing may be lower than meal pricing.

• 0:45Speaker 03

  It's great to have you here on The Clark Howard Show. You know, our mission is to serve you with advice and information that empowers you so you make better financial decisions in your life. In today's episode, we're moving closer and closer to open enrollment. If you get your health coverage through an employer, you buy your own, much tighter period for you to pick a plan for your individual health coverage. And by the way, in the past, where if you're buying individual coverage, you were just automatically re-enrolled unless you made a change.

• 1:29Speaker 03

  This year, you have to manually re-enter for your health coverage to renew in '26. I'm going to talk about what you need to know about this fall's changes with medical care. And coming up later, I want to talk about your idle cash. Interest rates are very much up in the air right now. Reasons Federal Reserve cutting the interest rates. It controls, but overall, interest rates, because of worries about what's known as stagflation, a slowing economy and rising inflation at the same time, means that it's

• 2:11Speaker 03

  very hard to know the direction of interest rates straight ahead. So I want to give a really defensive position for you for the money you save, not the money you invest, and that's coming later. On healthcare, because of the law that Congress, the big tax law Congress passed this summer, there are a number of changes with health coverage in 26. And this is not a year when you get your open enrollment booklet from your employer

• 2:51Speaker 03

  for picking a health plan for 26, to just take 15 seconds and click same, same, same, same, same. Because of changes the Congress made, health coverage is going to be quite a bit more expensive for employers, for individuals in 26 than it's been in 25. There are a number of things the Congress did specifically that are making health coverage significantly more expensive and leading to fewer people having health coverage,

• 3:30Speaker 03

  which, believe it or not, is one of the key factors in making health coverage more expensive. So employers are going to cost shift. Not every employer, but in large numbers, employers are going to shift more of what they've been paying, or the percent they've been paying, they're going to move more of that into your wallet. So you're going to have to take time this year in open enrollment and really look through the plans your employer has available to you. Larger an employer, typically the more plans available.

• 4:13Speaker 03

  And figure out, based on how you use medical services, which one is going to make the most sense for you for next year. And if you are buying individual coverage, the Congress specifically made changes to make individual coverage far more expensive. Would not be unusual in many states to see the premiums go up about 60% in 26 because of the changes the Congress made. It means that for an individual, you've got to be on your guard. Because there are a lot of people that are going to be peddling fake insurance

• 4:56Speaker 03

  coverage, fake plans that are some form of health reimbursement, but not actual health insurance. So if nothing bad happens to you in 26, you stay crazy healthy and you have one of these plans, wow, you're saying, "Look how little I'm paying for health coverage." But then let's say in 26, you get a bad illness, you're going to find out you're almost certainly not covered through these fake insurance plans. So it's going to require a lot more detective work, especially in the individual market. And

• 5:39Speaker 03

  know that this fall, for open enrollment, for individuals buying coverage, you may find some really sleazy semi-insurance plans available on the marketplace. So you've got to really not just look at premiums, you've got to look at the actual coverages itself. It's going to take more work for picking a plan for 26, especially for an individual. What a lot of people will end up doing if they're buying a real health plan as an individual, real health insurance, you may be forced into rethinking where

• 6:24Speaker 03

  you're buying insurance only for catastrophic things. Those are a potential choice. But buying a run-of-the-mill health plan that's real health insurance is, for many individuals, going to be cost prohibitive under the new law.

• 6:45Speaker 03

  That's an unfortunate reality. I mentioned something, gosh, a few months ago, that this is going to be for employees of large companies, probably the first year we're going to see a lot of employers offer health coverage where you are just given a set amount of money and you go shop for whatever you want. The advantage is more freedom on your part. The disadvantage is that in an employer plan, you're having to shop like I'm talking about for an individual, where you're going to have to be more clear

• 7:25Speaker 03

  of what it is you're actually buying and what's covered, more importantly, what's not covered. So I know that's all pretty downbeat stuff. It's just, it was the wisdom of Congress that health insurance should be much more expensive for consumers and employees and for companies that provide it to employees. And so that's where we're going to be in 26.

• 7:57Speaker 04

  Okay, Mike in Colorado sent you this one. I recently joined what I guess you might call class action arbitration with T-Mobile's reneging on price locks. I'm not sure if it'll do any good. I've also got a message from my internet provider saying they're changing their terms to exclude class action arbitration and allowing me to opt out of that. This seems to be trending. Can you tell us about it?

• 8:20Speaker 03

  Okay, so first of all, what did I do about T-Mobile? If you've seen our article on Clark.com, when T-Mobile broke its promise to me and millions of other people about once you were in a plan, if you didn't change it, you were price locked. And T-Mobile said, well, we didn't really mean that and just raised prices. What did I do? I did what I had the power of my wallet to walk, and I fired T-Mobile.

• 8:50Speaker 03

  And I'd had 14 lines with T-Mobile. Now, zero. They got what they deserved from me. They lost my business because they lied to me and many other people. You know, the class action, I don't know what people are gonna get. It won't be a lot. And T-Mobile will still make out like a bandit for having lied to people. So to me, the real power of the marketplace in a competitive market is if a company doesn't behave, you go somewhere else. And so that's what I did. Now, the thing about companies first banning your ability to sue them,

• 9:34Speaker 03

  and now banning the ability for you to be part of a class action arbitration, it's because companies want to be able to do whatever they want to do. And your choice is do you stay with them or not? And so with your internet provider saying, "Well, yeah, you know, if we do something that turns out it leads to a class action arbitration, that could hurt us, so we're not gonna allow those anymore. You can only act individually in arbitration." They're telling you they want the power to do whatever they want, and you're just gonna have to live with it.

• 10:13Speaker 03

  Even internet now, we've got so much competition every single year in the home internet space. You don't have to be with a cable monster. You don't have to be with a monopoly local phone company. It's your only choice or choices. We've got more and more and more coming along. So use the power of the marketplace instead of hoping to get your $4.12 from a class action settlement or whatever it is, after the lawyers get their part, you and I get whatever. Instead, if a company doesn't treat you right, can them.

• 10:58Speaker 04

  But you probably would if you were staying with this internet provider for whatever reason, you would opt out of that.

• 11:03Speaker 03

  You know.

• 11:04Speaker 04

  You have the option.

• 11:04Speaker 03

  And so, the percent of people that opt out of one of these notices is, I mean, it's a miniscule fraction of 1%. The reality is, most of us are busy in our lives. We don't have time to do things like that. So, I don't even mess with class actions. It's just not my thing.

• 11:26Speaker 04

  Ed in Oklahoma says, "I recently purchased an item advertised on one of the social media sites. It appeared to come from overseas. I purchased it using the PayPal option, which has my PayPal credit card associated with it. After receiving confirmation of the purchase and the amount of $59.99 with free shipping, the merchant added another $18.90 to what they charged PayPal, calling it a tax. This amounts to a tax rate of 31.5%. At no time did the merchant inform me of this charge. Had I known, I would not have completed the transaction. Could a merchant actually add charges to a transaction after the fact? I disputed the charge with PayPal and they denied my dispute and appeal, saying it didn't meet their criteria. How can this be? Do I have any recourse?"

• 12:11Speaker 03

  So, as to why PayPal didn't think it met their criteria, I don't know what that would mean. I don't know if you disputed the $59.99 plus the $18.90. To me, it would be reasonable to dispute the $18.90. What this almost certainly is, is an overseas seller that now has been hit with tariffs. And the reality is tariffs are nothing other than a tax on consumers. And so, when a company overseas, or a seller overseas, is selling an item, they are going to charge you tax, which is what this is, for what the cost is they're just passing on.

• 12:56Speaker 03

  This is a very messy time we're in because of the imposition of the tariff.

• 13:03Speaker 03

  So there's going to be a lot of things like this, including something that we had on TV where someone was having something delivered and they were being billed by the delivery service for the tariffs that had been collected from them for sending the item to the individual. And so they're there with the package delivery person who says, and you owe this additional money. That's the first they knew of it. And so this is something that will normalize however the tariffs all settle down and whatever the courts decide, Supreme Court now. And

• 13:46Speaker 03

  so this is something that is just ugly, messy right now. And it is part of what we're going to see in the future, that product prices will have them embedded in them, not this ad hoc kind of thing that out of nowhere, you're getting this weird charge. Is for PayPal saying it didn't fit their criteria? I don't get that.

• 14:13Speaker 04

  Roman in New York says, I have all three of my credit reports frozen and I recently went to Lowe's to purchase an appliance. Forgetting that my credit was frozen, I ended up applying for a Lowe's store card. Yeah, I hate them too, but hey, a hundred dollars off. Surprisingly, the card was approved even though my credit is frozen. I did get an email notification that TransUnion blocked a hard inquiry, yet within a day, the new card and hard inquiry appeared on all three of my credit reports. How is that possible if my credit was frozen to begin with?

• 14:42Speaker 03

  So this is an area I can only speculate on. The most common way this could happen is if you already have an existing credit relationship with whoever Lowe's uses for their credit program. If you do,

• 15:01Speaker 03

  Then they have access to your credit file already because of the existing credit relationships you have with other lending products, or other credit cards, or other store cards that you have with others. And that would be how this could happen where the credit for you already is available. You may not know this, but virtually every credit card company in the country checks your credit every single month at least, because once you have that existing relationship, their ability to check your current credit status does not freeze. So that would be number one.

• 15:46Speaker 03

  Number two, and it's the weirdest of all, the credit bureaus acknowledge, I don't think they necessarily do officially, that sometimes they just mess up. And somebody's able to do an inquiry for new credit, even when somebody's credit is frozen. That would be a rare occurrence, but it does happen, apparently, with all three credit bureaus.

• 16:12Speaker 04

  And the Lowe's card, just FYI, is managed by Synchroony Bank, which so many store cards are actually Synchroony.

• 16:20Speaker 03

  So if you have any other store cards, that's how Synchroony could go ahead and establish, hey, you're a good credit risk for having a Lowe's card, and even though your credit's frozen, they could still issue that credit. So that is my number one possible guess. Coming up ahead, in the confusion about the economy and interest rates, for your money that you're parking, what I call parking space money, which is what goes into savings accounts, and into CDs, or into money market accounts with a discount broker, there's

• 17:02Speaker 03

  a strategy I want you to consider right now, because the future picture is much fuzzier than normal. I'm gonna tell you about it straight ahead.

• 17:14Speaker 00

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• 17:43Speaker 01

  Your sausage McMuffin with egg didn't change, your receipt did. The sausage McMuffin with egg extra value meal includes a hash brown and a small coffee for just $5. Only at McDonald's for a limited time.

• 17:56Speaker 02

  Price and participation may vary. Promotion pricing may be lower than meal pricing.

• 17:59Speaker 05

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• 18:29Speaker 00

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• 18:59Speaker 03

  There's an old strategy for savers that suddenly is very relevant again. And it's known as the ladder or CD ladder. It's where money that you need to park in savings, money you're not choosing to invest, that you can take the money and split it into five equal piles. Let's just keep it simple, keep the math as simple as possible. Let's say you got $5,000. You put 1,000 of it into a one-year CD, 1,000 into a two-year, 1,000 into a three-year, 1,000 into a four-year, and 1,000 into a five-year CD.

• 19:44Speaker 03

  The reason you do this is knowing the crystal ball of what interest rates are going to be two, three, four, five years out is unknowable right now. Too much economic disruption right now in the United States. So if you buy the latter, you're taking your money and you're splitting it out with the risk of interest rates being spread out to lower the overall risk. And in a classic ladder situation, one year from now, you would take the money that now is yours from the one-year CD, and you put it in a new five-year CD.

• 20:28Speaker 03

  The whole thinking with a CD parking space is that you would have 20% of that pile, $1,000, plus the interest it earns, available to you in no more than 12 months at any point. And at the same time, historically, a longer CD earns higher interest than a shorter CD. Right now, that may not be the case, but over time, it generally is. That's why every 12 months, when the one-year comes due, then the two-year, then three, whatever, you buy a new five-year CD. Ultimately, all your money is in five-year term CDs, which, again, over time, traditionally

• 21:12Speaker 03

  has been what earns the highest interest rate. Why? Well, because people demand more interest if they're going to tie up their money longer. But market conditions can actually make a longer-term one earn less than a shorter-term one, potentially. Right now, it's still a valid strategy. Where should you buy these? Best place to buy them? Is at a discount broker. Discount brokers can buy CDs of various lengths and the whole buying them from the wholesale side of a bank or credit union, earning you a higher rate of interest than you as little old you or me can earn directly.

• 21:54Speaker 03

  So you buy it through the discount broker and you buy your ladder and then you rebuy, gotta have it on your calendar, then when you rebuy each of those over the years. And that is a way that you don't have to try to figure out which way interest rates are going to go over a time period that is more unknowable right now than it even normally is. And this is again, just for parking space money. Long-term money needs to be invested. Krista?

• 22:34Speaker 04

  And also, we have some resources at Clark.com. We have a great article on the CD ladder and we also have a CD ladder calculator, which is pretty cool.

• 22:45Speaker 03

  So what does the calculator do? Does it tell you how much money your money will be worth at later date?

• 22:50Speaker 04

  Mm-hmm.

• 22:51Speaker 03

  Okay.

• 22:52Speaker 04

  Pretty cool. All right. Questions came in from all over the country as usual. And if you want to ask a question, again, Clark.com/ask and you can indicate if you want to ask a question to Clark or to Wes, if you listen to Ask an Advisor that airs every Tuesday. This one was written by Tim in Pennsylvania. I make $90,000 a year and I have the first two years of my daughter's college paid for.

• 23:14Speaker 03

  Fantastic.

• 23:15Speaker 04

  I will need to come up with another two years, which will be $18,000. I pay $9,000 a year in property taxes.

• 23:22Speaker 03

  Wait, wait, wait, wait, wait. $9,000 a year for?

• 23:26Speaker 04

  The tuition and property taxes, yep.

• 23:29Speaker 03

  You and I would love having tuition that low for our kids.

• 23:34Speaker 04

  I have two car payments at $510 a month. I also have $8,000 in credit card debt. My retirement is pretty good. Should I take money out of my Roth to pay off the credit cards and use some for my daughter's college? My wife has a Mercedes and she won't part with it.

• 23:52Speaker 03

  Wait, wait, you don't say what you drive and whether you'd part with what you've got.

• 23:57Speaker 04

  Yeah.

• 23:58Speaker 03

  And buy a junker and not have a monthly payment anymore. Sorry, just picking on you, Tim. You're picking on your wife. All right, so I'm gonna surprise you. You have managed to save enough to pay for the first two years. I think it's fine for your daughter, that's a very small loan amount, versus what she will earn in a career, to take out federal student loans for the two years that you don't have the money saved. Because the last thing I want you doing is using Roth money

• 24:41Speaker 03

  to liquidate the credit cards and free up money for college. You need that money for your retirement. There's no scholarship plan, no grants, nothing for retirement.

• 24:56Speaker 04

  No student loans.

• 24:58Speaker 03

  Yeah, so you're not talking about, I mean, there are people whose kids are going to colleges that are a hundred grand per year now all in. Nine thousand? Your daughter can handle that. And if she takes out eighteen thousand dollars in student loan debt, and you then over time after college want to help her with the payments, or even make the payments, that's fine. But I don't want you stealing from the future for her college. You've already done so much paying for the first two years.

• 25:37Speaker 04

  And the credit cards, you just say pay them down as quickly as you can.

• 25:40Speaker 03

  Yeah, the credit cards, thank you. Credit cards definitely do not pull money out of a Roth to pay credit card debt. That Roth money is golden because it continues to grow tax-free and will be spent tax-free later in life. The credit cards, having that debt and coming up with a plan of how much you're gonna pay every month to get it paid. ...off in whatever period of time, 30 months. I really like 30-month payment plans. If you can do it in 30 months, do that. And calculating what you have to pay per month based on the interest rate, the cards is really easy to do. And the goal should be

• 26:21Speaker 03

  to get that to zero. And by the way, you can't use the credit cards at all now if the goal is to pay them off.

• 26:29Speaker 04

  Catherine in Florida says, "We had planned to use our 2% cash back credit card to pay for our bathroom renovation. However, the company we hired to do the renovation would have charged us the 3% transaction fee they get hit with by their processor. The math isn't mathing, so we paid each installment by check or cash. We didn't really have any other option at the time, and the bathroom was in serious need of repair and an upgrade."

• 26:53Speaker 03

  Oh, it's beautiful now.

• 26:54Speaker 04

  "Should we get a home equity line of credit to have available for future home projects?"

• 27:00Speaker 03

  Catherine, you know, if you're a member of a credit union, a lot of credit unions with no closing costs allow you to set up a standby home equity line of credit. They usually charge a significantly lower interest rate on them, it's a floating rate, than banks charge. And having one available, if you have the discipline, that it'll only be used for improvement to your houses, to your house, or a major repair to your house, that's a great idea.

• 27:32Speaker 04

  All right, Lynn in Delaware says, "I know that you've long advocated having a dedicated computer on which you do only financial activities. That got me wondering, what do you think about using a dedicated phone that never left your home to receive two-factor authentication codes? One could get a phone plan with unlimited text from Telo for $5 a month. Do you know of any cheaper plans for text that might also be available?"

• 27:56Speaker 03

  Yeah, there's, uh, gosh, who is it? Somebody's got a plan that's free that actually has a little bit of data included. Every month, is it helium?

• 28:06Speaker 04

  Text now.

• 28:08Speaker 03

  Oh, text now, that's right. Text now, and I think there's one called helium that has a base plan that's free to introduce them. And you never know with these things if they're going to survive. But being able to have a two-factor line is actually a very clever idea that I haven't thought of. And that way, you never have to worry about your phone falling into the wrong hands being stolen from you.

• 28:39Speaker 04

  But I don't unders- well, I guess.

• 28:41Speaker 03

  Cause you're two, you only do your two FA at home.

• 28:44Speaker 04

  Right.

• 28:45Speaker 03

  And by the way, the whole thing about the two FA that was looked at as silver bullet, it's not quite working that way. We wouldn't be talking about all the problems with people intercepting your two-factor authentication. But know that that's the Achilles heel right now. That what criminals are after through conning you or through stealing your service or whatever. They're after your two-factor authentication. And if you've heard me say it, but didn't do it, please do the SIM lock with your provider for your cellphone service.

• 29:25Speaker 03

  So that a criminal, when you least expect it, usually in the middle of the night, doesn't steal your cellphone service and use it as a way to get the authorization codes for your bank, your brokerage, your retirement account. You name a key account. You want to protect your two-factor authentication from the crooks. And thank you so much for joining us today. I hope that something we've talked about today is something you can put to work in your life to protect your money, to save your money better, to build more money for your future, to build more financial security overall in your life.

• 30:10Speaker 03

  And know that's what we're about, is being there to empower you so many different ways. And this week, like most every other week of the year, except holiday weeks. We are available to serve you with free one-on-one advice. If you've got a problem, a question, a concern, you don't know how to fix a problem, you can talk with our Team Clark Consumer Action Center for nothing. But the service is invaluable. You can see how to get that free one-on-one guidance. Go to Clark.com/CAC. And along with everything else we do, the empowerment we're about is so that you

• 30:54Speaker 03

  learn ways to save more, spend less, and don't ever, ever, not ever allow somebody to rip you off. See you on Wednesday.

• 31:11Speaker 00

  Progressive's Accident Response can contact emergency services if you're in a major accident. The only thing worse than someone you love being in an accident is not being able to help them. So Progressive is here to help when you can't. So get peace of mind knowing your loved ones are protected with Progressive's Accident Response. Learn more at progressive.com. Progressive Casualty Insurance Company and Affiliates. Limited availability in California. Driver is responsible for emergency and towing charges not covered by the policy. Coverage subject to policy terms and conditions.