Older clients increasingly need advice about their Medicare options, and the majority of financial advisors believe it is their fiduciary duty to give this advice – only if they know how.
As more than 60 million Americans prepare for this year’s Medicare open enrollment period, which runs from October 15 to December 7, most do not understand the components of the plan, admit they are overwhelmed by Medicare advertising, and fail to consult with outside sources before enrolling.
Medicare comes in two flavors, one of which is Medicare Original, which includes Part A hospital insurance and Part B outpatient coverage. Those who choose original Medicare typically supplement it with a Medigap insurance policy to cover deductibles, co-pays, some out-of-pocket costs, and a Medicare Part D prescription drug plan.
Instead, an increasing number of Medicare beneficiaries are choosing all-inclusive Medicare Advantage plans, which usually include the original Medicare package and prescription drug coverage, and often include additional coverage for hearing, vision, and dental services, usually at a lower monthly cost than the original à la carte Medicare. Medicare Advantage members must pay a monthly Medicare Part B premium, but they often face little or no monthly costs for using a particular provider’s network.
During this fall’s open enrollment season, Medicare beneficiaries can change their Medicare Advantage plan or Medicare Part D prescription drug plan for next year, with coverage beginning January 1. plan, switching from an original Medicare plan to a Medicare Advantage plan, or switching from a Medicare Advantage plan to original Medicare (although it may be difficult to qualify for a Medigap plan due to medical underwriting requirements).
Most Medicare beneficiaries fail to switch plans during open enrollment even if other plans may better meet changing health care needs, according to a new report, Hidden Crises: The Enrollment Maze, from Sage Growth Partners, a national healthcare advisory firm. .
Dan d’Orazio, CEO of Sage Growth Partners, said in a statement: a permit accompanying the report. “It’s too late to make changes to improve education and support for those who enroll in Medicare each year.”
Although a third of more than 1,100 respondents in the Sage Growth survey said they had a financial advisor, only 2% used that advisor to help them choose a Medicare plan.
Separately, another new survey from Medicare Planning and Counseling Service 65 Incorporated finds that a majority of financial professionals believe advisors are obligated to clients when it comes to health care planning for retirement. In a survey of more than 155 advisors, nine out of 10 respondents said that financial advisors have a fiduciary duty to help their clients, but most do not feel ready to do so.
Both surveys confirm that the need for counseling is real because health care costs are a primary concern for current retirees and those approaching retirement.
More than half of baby boomers and two-thirds of Generation Zers said they are terrified of what health care costs might do to their retirement plans, according to the National Retirement Institute. 2021 health care costs in a survey of retired consumers. Half of retirees say planning for future health and long-term needs is their top priority, according to the EBRI 2022 Retirement Confidence Survey.
“With healthcare in retirement the number one concern for most clients, improving Medicare and Medicaid should be the starting point for any discussion about retirement planning,” said Melinda Coogill, co-founder of 65 Incorporated.
The 65 Incorporated survey also found that nearly 50% of counselors said their clients ask them about Medicare “often” or “all the time,” and 40% said that their clients ask about healthcare costs in retirement “often” or “all the time.”
“Consultants are looking for tools to help their clients with their medical care journey,” Coogill said. “Although advisors cannot understand every aspect of this complex government program, the programs allow them to fulfill their fiduciary duty by guiding their clients through this complex decision in an unbiased manner.”
And those software solutions are on the increase. Healthpilot.com was launched two years ago to help consumers understand their medical care options and help financial advisors guide their clients in their decision-making process.
“Think of the Healthpilot platform as a kind of ‘Amazon for Medicare,’” CEO David Francis wrote to me in a recent email. Pharmacy, Wealth Status – along with a proven and proprietary set of AI algorithms, to recommend the best Medicare product and Francis Books. “From confused and intimidating to confident coverage in under 15 minutes.”
Healthpilot too Partnership with Envestnet To enable the more than 100,000 financial advisors and wealth managers in its network to use Healthpilot technology and services to reach millions of retirees.
“We fill the service gap and dropout for these counselors with their retired clients—the Medicare piece—and close the data loop for them knowing that their client is well-covered with an accurate estimation of their health care costs for financial planning purposes,” Francis wrote.
(Have questions about the new Social Security rules? Find the answers in Mary Beth Franklin’s 2022 e-book at MaximizingSocialSecurityBenefits.com.)
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