Less Than A Third Of Seniors With Financial Planners Discuss Medicare With Them: Says Study, But Some Advisors Do Address Healthcare Costs

The Allsup survey also found that, although 71% of seniors with financial advisors said they will review their income and expenses in the next 12 months, only 58% plan to review their healthcare needs in the next 12 months. Medicare’s annual enrollment season, when all seniors can change plans for 2013, is Oct. 15 through Dec. 7, 2012.

“Allsup’s survey of seniors with financial advisors found that while only a small number discuss Medicare with their advisors, three of their five major concerns relate to healthcare and Medicare,” Mary Dale Walters, senior vice president of the Allsup Medicare Advisor, a Medicare plan selection service for Medicare-eligible individuals, said in a release.

“Financial and retirement planning professionals have a tremendous opportunity to assist their senior clients with Medicare plans and healthcare choices by helping them realize and prepare for the cost-related results of their decisions,” Walters added, according to the release.

In Reality, Some Planners Are Talking Medicare

Financial advisors, meanwhile, agree that there’s a tremendous opportunity to help senior clients with Medicare plans and healthcare choices.

Contrary to the survey’s findings, Aaron Coates, CFP, CIMA, a financial advisor at Valeo Financial Advisors, says 100% of his clients turning age 65 discuss Medicare plans with him. But none before or after the threshold, he says.

What’s more, Coates says he’s more than prepared to discuss Medicare with his clients, having just completed an internal CE session, featuring a speaker from United Healthcare a few months ago. The session featured a booklet, “Medicare Made Clear, Show Me Guide,” produced by United Healthcare that, Coates says, he refers back to regularly (including this past weekend with his mother who turns 65 soon).

Others advisors are dealing with their client’s Medicare questions as well, and not infrequently.

“It’s certainly something we bring up and spend a fair amount of time addressing with clients,” says Chip Workman, CFP, a financial advisor with The Asset Advisory Group.

For most, he says it’s simply a matter of walking them through the steps required ahead of the 65th birthday “to properly file and analyzing what supplemental plans are best suited for their needs.”

In his case, Workman says his firm often has clients with supplemental plans as part of their retiree benefits through their former companies.

And in some cases, Workman will bring an outside expert in to deal with his clients on a case-by-case basis.  “When called for, we have an expert we turn to who can walk through a client’s list of prescriptions and other needs and make a recommendation as to what best suits their needs,” Workman says.

In addition, Workman says the outside expert delivers a presentation to the firm’s clients once per year. “We also turn to this expert to present an annual ‘lunch-and-learn’ session for those clients approaching age 65 or who might be due for an evaluation of their current Medicare planning beyond 65,” Workman says.

After these sessions, Workman says his firm is able to calculate and address their client’s specific healthcare costs and concerns.

Others aren’t missing the opportunity to talk with clients about Medicare, as well. “We proactively discuss Medicare with all of our clients as they approach eligibility and discuss satisfaction with the current plan our Medicare participants are on each year,” says Joe Pitzl, CFP, of Intelligent Financial Strategies. “The planning element leading up to Medicare eligibility is crucial and poor decisions (or indecision) can result in some steep penalties. It is a very confusing and stressful subject for clients that literally weighs on them for years as they near eligibility.”


In addition, Pitzl says he feels more than very qualified to talk about (Medicare and healthcare costs), plan for that transition, and recognize when a change of plans may be warranted. “However, the plans themselves change frequently, companies offering coverage change, and formularies change often enough that I do not consider myself an expert on specific policies, particularly when nearly half of our Medicare-eligible clients live out of state,” he says.

The Exceptions

Not all advisors are dealing with Medicare questions, however, though for obvious reasons.

Some advisers, for instance, report having clients who are pre-Medicare. “The most frequently asked question I receive regarding health insurance,” says Mark Van Drunen, M.S., CFP, a partner with Ownership Advisors, “is how to get to age 65.”

The real struggle, he says, is when somebody retires at age 62 and where are they going to get health insurance for the next three years.

Others are in the same boat.

“I have to be honest, most of my clients are pre-65, and it's been a while since it's come up,” says Rob Schmansky, CFP, of Clear Financial Advisors, who agrees with the Allsup’s survey findings. “I think it's true that advisors generally do not begin the (Medicare) conversation.”

Schmansky speculates that there are at least two reasons why this is so. One, many clients may feel (Medicare) is outside the realm of an advisor's expertise. And two, clients may not be comfortable discussing their medical needs with their financial advisor. “Many seek advice online and from other sources to make sure they are covering their unique medical needs,” Schmansky says.

The Need Is Great

“I think this is a huge issue, and too often is being overlooked,” says Sheryl Garrett, CFP, AIF, a managing member at Garrett Investment Advisors and founder of the Garrett Planning Network. “It’s essential for financial planners to be equipped to raise these questions and discuss the (Medicare and healthcare) options with clients.” 

And the reasons are obvious. “More and more health insurance decisions are being transferred to the insured,” she says. “The healthcare area, Medicare options and Medigap policies is one of the most important considerations that many retirees will face.”

And fortunately, says Garrett, advisor members of her network and many others who are seeking out “additional training are exposing themselves to the options and opportunities our clients face, and hopefully can help make people aware of their options and help them select which option(s) may be best for their unique needs.”

For instance, Garrett Planning Network just finished a webinar for its members on this subject.  “It’s an update and repeat of one we did last December during open enrollment,” she says.  “Also, there are enough changes that apply and the speaker (one of our members) discussed insured options to change coverages.”

In addition, Garrett recalls listening to “great presentation” from Dr. Katy Votava of GOODCARE.com at the FPA conference.  “She really opened some eyes about the amount of planning that can and should be done to assist clients in planning most effectively for their healthcare needs in retirement,” she says.

And, she notes that Louise Schroeder, another member of Garrett Planning network, delivered a presentation to the network and as well as one at this year’s FPA conference on helping our clients age successfully.

“A portion of the industry is becoming much more holistic about the subjects we spend our money on,” says Garrett.  “Healthcare in retirement is a critical piece of that puzzle.  But, most of us need a lot of initial and continuing education just to keep up with the options, and know where to turn for help.”

Like Schmansky, Garrett thinks a lot of seniors do not assume financial planners or advisors provide guidance about Medicare.  “In fact, I think a lot of people don’t know they can make changes to the Medicare coverage and how to determine if they should,” she says.  “These individuals don’t know where to turn for guidance. The agents selling the policies are often all they know of. This was exactly why financial advisors must bring the conversation to the table. In many states an advisor would have to have a health insurance producer or consultant’s license and that may be one reason that this subject may not be being addressed as commonly as it should be.”

For what it’s worth, HealthView Services is among those firms building technology solutions to help advisers determine healthcare costs in retirement for the clients of advisors. The company has an online calculator that can be used to determine healthcare costs in retirement.

Other Key Findings

Seniors with financial advisors are more likely to save specifically for healthcare expenses than seniors without advisors, 41% vs. 27%; and are more confident in their healthcare savings, 70% vs. 58%. Of 1,000 seniors surveyed across the country, one-third reported using a financial planning professional for retirement planning. The information collected for the Allsup survey is part of a larger survey of seniors who are enrolled in Medicare. The study was commissioned by Allsup and conducted by Richard Day Research, a Market Probe Company based in Evanston, Ill.


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