In health care and finance, an ounce of prevention is worth a pound of cure.
Just as sound asset planning can mitigate financial mishaps, preventive medicine can keep minor health issues from becoming debilitating diseases. Given rising health care costs and growing uncertainty over preexisting conditions, proactive health management can protect a nest egg in retirement.
Fortunately for retirees, the ACA-expanded Medicare includes a wide array of preventive services. From mammograms and nutritional counseling to screenings for diabetes and cardiovascular disease, most senior health services are covered.
Still, too few retirees are aware of their options.
“In my experience, people going into Medicare for the first time have gaps in their literacy of how Medicare works that go well beyond these preventive screens,” says Tom West, SEIA partner. With three out of four Americans 65 and older living with multiple chronic conditions, few can afford to pass up the opportunity for low-cost preventive care.
While advisors won’t play a direct role in their clients’ health care, they are in a great position to educate and inform. Given the devastating effects of unexpected health care costs on a portfolio, it only makes sense to discuss preventive care options with your clients.
“Most preventive care services are available now, including mammograms, bone density testing, prostate screening and colorectal screening,” says Rhonda Underwood, independent broker and Medicare advisor.
Ninety-three percent of fee-for-service Medicare spending is used for people with multiple chronic conditions, and the CMS is taking a comprehensive approach to reducing those costs. For a complete list of services, clients can refer to the CMS’s official handout, “Your Guide to Medicare’s Preventive Services.”
Most of these services have qualifying risk factors, some of which require a prior diagnosis, at-risk assessment or specific family history. For a patient’s bone mass measurement to be covered, for instance, their doctors must have already indicated a risk of osteoporosis. Screenings for cardiovascular disease and depression, on the other hand, are available to everyone.
Also available to every first-time recipient is the “Welcome to Medicare” visit.
“You can get a no-cost appointment with your doctor during your first 12 months of Medicare, where you have a top-to-bottom screening of your medical history, prescriptions and health conditions,” says West. “It’s a way to start dealing with any chronic illnesses or health issues you may have and come up with proactive approaches to staying in good health.”
What’s not covered
Given the long list of preventive services Medicare includes, it might be easier to educate clients on what’s not covered. “Annual eye exams and hearing tests are the two things that stand out to me,” says Underwood. Part B doesn’t cover dentistry, either – one of the biggest out-of-pocket expenses among seniors.
Still, other Medicare products may cover clients’ dental, vision and hearing, depending on their enrollment choices.
“If Medicare covers a service, Medigap will pick up the balance – otherwise, it won’t pay at all,” says Underwood. “Medicare Advantage plans,” on the other hand, “offer everything traditional Medicare does, plus additional services.”
Those services may include dental, vision and hearing. Advantage plans, however, also feature additional premiums and copayments, as well as more limited provider networks.
As they head to their Medicare-covered screenings, clients should also understand that follow-up procedures won’t be covered in full.
“A colon cancer screening is covered, for instance, but if something is discovered and removed, that’s no longer a preventive service – it’s an outpatient procedure,” says Underwood.
If the procedure is Medicare-approved, however, the patient will only have to pay the 20 percent Part B coinsurance – and they won’t pay a dime if they’re on Medigap.
Finally, most preventive services are only covered at a certain frequency. Those who want to be tested more often will have to pay out of pocket. A fasting blood glucose test is covered up to twice per year, for example, but some diabetics (and their doctors) will want more frequent screenings.
How to take advantage
How – and where – can clients take advantage of these services?
“It’s typically managed through your primary care provider,” says Underwood.
Still, most services don’t require referrals, and as long as a service is authorized, patients can receive it in any Medicare-accepting hospital, outpatient clinic or doctor’s office.
The facility also depends on where you live. In urban areas where doctor’s offices are well-integrated with hospitals and other health care services, the primary provider usually coordinates preventive care. In rural areas, however, “there might be more screenings that take place through public venues or community health centers,” says West.
Rules may be different for clients on Advantage plans, however. Privately operated like employer-provided health plans, they may require service referrals that traditional Medicare would not.
“HMOs will usually have referrals; PPOs usually won’t,” says Underwood.
Your role in your clients’ health care
As health care costs rise and longer lifespans lead to greater longevity risk, advisors will need to take more vocal roles in their clients’ health care.
“It’s our responsibility as professionals to make sure our clients know the impacts of their decisions,” says West. “If an advisor can explain to their clients where the risks of health expenses will derail the retirement goals they’ve worked to achieve, those clients have a higher likelihood of taking care of their health.”
By steering your clients towards sounder health care decisions, you can ultimately protect their portfolios – and their quality of life – and better position yourself as a trusted advisor.