Travel considerations: Clients who frequently travel within the United States or abroad might benefit from plans that offer broader coverage. Original Medicare, often supplemented by a Medigap plan, might be more suitable for clients who travel often, as some Medicare Advantage plans have limited networks.
Provider preferences: Some clients may have long-standing relationships with certain health care providers. Verifying that the selected Medicare plan includes these providers in its network is essential.
Convenience and simplicity: Some clients may prioritize the simplicity of managing their health care. Medicare Advantage plans, which often bundle services including vision, dental and prescription drugs, may appeal to clients seeking a more streamlined approach.
Paying for Medicare Plans
Your clients can use various sources of retirement income to pay Medicare costs.
Social Security benefits: Most Medicare Part B premiums are automatically deducted from Social Security benefits. You should factor this into a client’s overall retirement income planning.
Required minimum distributions (RMDs): For clients over age 73, RMDs from IRAs and other retirement accounts can be used to help pay Medicare premiums.
Pension income: If applicable, pension income can also be allocated to cover Medicare expenses. You should review your client’s pension plans and help them structure payments to align with Medicare costs.
Create a pension-like income: Review your client’s assets to see if you can find an income stream suitable to pay for health care costs. Evaluate the annual out-of-pocket costs for health care, then determine the amount of assets needed to generate that income.
Products such as annuities with living benefit riders may be a way to align assets to pay for out-of-pocket liabilities such as health care costs.This is a strategy known as liability-driven investing.
Cost-Saving Considerations
Review and optimize prescription drug coverage (Part D): Prescription drug costs can be a significant financial burden, but clients can potentially save money by taking a close look at coverage options.
Annual plan review: Encourage clients to review their Part D plan annually during open enrollment. Drug pricing can change, and switching plans could result in substantial savings.
Promote preventive services: Medicare covers a range of preventive services at no cost to the beneficiary.
Schedule regular checkups: Encourage clients to schedule and attend regular checkups and screenings. Early detection of health issues can lead to lower overall health care costs.
Planning Is Key
You play a pivotal role in helping your clients navigate Medicare, ensuring they make informed decisions that align with their financial goals.
By employing these strategies, you can provide valuable support that enhances each client’s financial security in retirement.
