For Wealth Managers

It is critical that a wealth management platforms  include health care planning so that advisors can address it from a personal and financial perspective. The world of wealth planning now focuses on nonfinancial concerns that may impact affluence down the road. Although health care would seem outside of the scope of an advisor’s area of expertise, the ability to incorporate its influence on an individual’s financial future.

Investment News, July 19th, 2009 featured a Letter to the Editor by Ellen Breslow of EAB HealthWorks.

Ellen discussed the increase in self directed health care benefits and its impact on planning for future health care.

When is the appropriate time for an advisor to have a conversation about Medicare? Is this, in fact, the responsibility of an advisor? Absolutely. Including health care expenses is essential before and during Medicare years. Long term care including assisted living, nursing home and home care are an unknown quantity for the future. Meeting Medicare deadlines, selecting  Medigap plans, Part D and Medicare Advantage are just some of the decisions that face an individual nearing retirement.

Several decisions are made annually, often with an increased cost to the retiree. Planning ahead can make it easier to meet expenses, however the world of Medicare and healthcare in general may not be predictable. Any number of factors can impact the cost of health care annually for retirees, from the ACA to the individual’s own health.

Health care planning is important to everyone regardless of age or financial status. For an advisor, it isn’t necessary to be an expert; however current and future expenses associated with healthcare need to be incorporated into appropriate income management plans in retirement. Pre retirees and working individuals will also have current expenses in addition to planning for the future. Establishing a simple discovery process will enable the advisor to remind retirees what health care expenses they can expect on annual basis, and adjust cash flow accordingly.

  • Retiree Advisory

    At least annually, review Medicare, Medicare Advantage, Medigap and Part D plans. Should a retiree be eligible for employer sponsored post retirement health care, reviewing the plan and including it in cash flow projections is important. Medicare and other health plans can change each year, which can also have an impact on income planning.

  • Pre Retiree Advisory
    Address the needs of individuals age 50-64. Assess post retirement  benefit availability, health insurance alternatives, long term care funding options and advocacy/wellness. In addition, an advisor care prepare a cash flow analysis that incorporates these expenses and potential other pre age 65 costs. This analysis will give wealth managers a health care cost road map for retirement income planning purposes.

  • Individual Advisory
    Although much of the focus of health care planning is centered on retirees, all individuals should review their health care plans regularly, especially around open enrollment when benefits for the upcoming year are announced. The cost of health care and the health insurance plans themselves change, so that re-evaluating cash flow during open enrollment with an eye towards adjusting expenses is necessary. While individuals generally concentrate on health insurance annually, at the same time it makes sense to look at other potential benefits for family and dependents.

Components for these programs can vary depending upon the advisor and discovery questions. EAB Healthworks has prepared a sample discovery questionnaire with guidelines for the advisor.