Clients Need a Medicare Plan, and You Can Help

1.) Age is a chief consideration in regard to Medicare. Americans cannot sign up for Medicare until they are 65 years of age unless they are disabled and qualify for Social Security Disability Insurance. However, clients choosing to retire before age 65 may have alternative health insurance options in the meantime, such as COBRA continuation coverage, retirement health insurance benefits through the former employer, and plans purchased through the Affordable Care Act exchanges. The premiums and out-of-pocket costs of these options can be quite high, so estimating a premium amount is often not good enough.

2.) Once an individual reaches age 65, navigating the Medicare world doesn’t become any simpler. Choosing the right Medicare products or combination of Medicare products becomes the next task at hand. Medicare parts A and B are considered the more traditional Medicare options, where part A covers most hospitalization expenses and part B covers items beyond hospitalization, like doctors’ bills and medical tests. 3.) It’s critical to realize Medicare alone will not cover all medical expenses in most cases, so advising a Medicare supplement or Medigap insurance plan to a client helps provide protection where Medicare does not. Additionally, prescription drug insurance plans, also known as Part D plans, specifically help offset the cost of prescriptions. Part D plan options can often be very expensive and are not automatically renewed on an annual basis. Medicare supplements and prescription drug insurance plans are not independent of Medicare; rather they work with Medicare, so recommending the best combination of these plans provides strong protection for clients.

4.) Beyond Medicare parts A and B, Medicare Part C (Medicare Advantage) offers yet an additional alternative to traditional Medicare. Offered through independent insurance companies regulated by the government, Medicare Advantage plans offer increased flexibility over Medicare parts A and B. The federal government establishes a maximum out-of-pocket limit Medicare Advantage companies can require an individual to pay within a year’s time. This regulation limits out-of-pocket expenses to a set amount — perhaps the plan’s most distinguishing and alluring characteristic. However, Medicare Advantage also invokes higher co-pays, and in some cases, it limits plan participants to only certain doctors and medical networks.

As a financial advisor, there is a major opportunity to offer Medicare planning services — especially for preexisting retirement clients, because Medicare planning and retirement planning go hand in hand. Different Medicare solutions have different financial repercussions — making Medicare advising financial advising in disguise. If offering holistic retirement planning services is the aim, then incorporating Medicare advising in that planning process is a must.