Plan for Clients Healthcare Costs

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This presentation was specifically prepared for FPA of Massachusetts- Annual Meeting - Boston, May 7, 2010.

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Planning & Preparing for your Client’s Healthcare Costs :

Slide 2:

Agenda :

Agenda Get Acquainted How Does this Fit into Practice and the Business Model? Overview of Healthcare Economics Planning for Routine Healthcare Costs Planning Strategies for Clients‘ Transition to Medicare What About Long Term Care? Including Experts in the Planning Team Q & A © 2010 GOODCARE.com

What’s on your mind? :

How this fits in your business model :

The Healthcare Puzzle :

Let’s Talk Language :

Disposable Personal Income Spending Shares :

Share of Healthcare Spending :

Healthcare Inflation & CPI Inflation Rate Comparison :

Why “average” doesn’t always mean “average” :

Out of Pocket Healthcare Expenses :

Walking a tight rope! :

Maintaining Balance :

Healthcare Market Factors for Financial Advisors to Include in Retirement Planning: :

Healthcare Financial Planning in Retirement: Strategies :

Things to Think About: :

Things to Think About: What things factor into projecting healthcare expenses over the course of your clients’ lives? How do you build healthcare budgets? What portion of healthcare expenses may be “Long-Term Care” expenses? Know when to consult with or refer to an expert. © 2010 GOODCARE.com

Become familiar with healthcare costs :

Become familiar with healthcare costs “Routine” healthcare costs Long Term care costs in the area where your client expects to retire: Where they reside now? Where they may reside in early retirement? Where family may be? © 2010 GOODCARE.com

Construct a Healthcare Budget :

Construct a Healthcare Budget Include expected insurance costs: premiums, co-payments, deductibles, co-insurance Other expected out-of pocket costs: Pharmaceuticals, medical equipment and supplies, eye ware, hearing aides, home modification, etc., etc. Long-term care cost risk coverage © 2010 GOODCARE.com

Slide 21:

Here are the key questions to ask: :

Here are the key questions to ask: Where will they reside when they retire? What kind of health insurance can they purchase? What kinds of health insurance benefits are most important to them? What’ the difference between a “good” health insurance policy and a “bad” one? How much will it cost? How to assist them in the shopping process? © 2010 GOODCARE.com

George (58) & Florence (60) :

George (58) & Florence (60) George’s company was recently sold and he took the early retirement buyout. The company has no retiree health insurance and COBRA health insurance benefits run out next year. They will not be eligible for Medicare for several years. © 2010 GOODCARE.com

Consider Becoming an Entrepreneur :

Consider Becoming an Entrepreneur May find better health insurance rates as a sole proprietor Consider a section 105 benefit plan for “Mom & Pop” businesses Added income to fill the retirement account © 2010 GOODCARE.com

Slide 25:

Slide 26:

How to be a Good Healthcare Shopper :

© 2010 GOODCARE.com How to be a Good Healthcare Shopper Have an annual health insurance “check-up” Review medications with a doctor, pharmacist or care manager. Look for: Generic equivalents when ever possible Shop around for the best drug prices Compare cost and quality of healthcare services before you use them Review all statements from insurances and providers for accuracy

Impact of “Healthcare Reform” on folks < 65 yrs. old :

Impact of “Healthcare Reform” on folks < 65 yrs. old Pre-existing condition insurance pools 2010 Reinsurance program – company cost retiree healthcare 2010 Small business health insurance premium tax credit 2010 $2,500 FSA limit 2013 © 2010 GOODCARE.com

Impact of “Healthcare Reform” on folks < 65 yrs. old (con’t) :

Impact of “Healthcare Reform” on folks < 65 yrs. old (con’t) Adult children < 26 yrs. Coverage Tax relief – healthcare professionals: Exclude state student loan payments from gross income Effective 1/1/09 Amend returns as needed Insurance rescissions prohibited 9/10 Prohibit life time limits 9/10 Restricts use of annual limits 9/10 © 2010 GOODCARE.com

The Massachusetts Experiment :

The Massachusetts Experiment Results from the “natural experiment” with state mandated coverage Impact on employers Job loss  migration to private insurance pools Impact on consumers: 3.3% uninsured in Massachusetts 16% national average Costs high ≈ contiguous states © 2010 GOODCARE.com

Planning Strategies for Clients' Transition to Medicare :

Planning Strategies for Clients' Transition to Medicare

65 is the Great Divide :

The “Alphabet Soup” of Medicare :

The “Alphabet Soup” of Medicare © 2010 GOODCARE.com Medicare Part B Supplemental Insurance (SI) MEDICARE Medicare Part D Prescription Drugs A B C D Medicare Part C Medicare Advantage (MA) Medicare HMO, PPO, FFS Medicare Part A Hospital Insurance (HI)

Medicare C aka“Medicare Advantage” :

Medicare C aka“Medicare Advantage” “Combo” plan: Medicare A + Medicare B + Medicare D (Optional) = Medicare C Can be a good value and include many features of Medigap Caveat emptor: May have limited choice of care providers Evaluate plans carefully for co-pays and co-insurance, out-of-pocket limits © 2010 GOODCARE.com

“Medigap” – It’s like adding crackers to the soup – it fills the gaps :

Open Enrollment 2010 Does and Don’ts :

Open Enrollment 2010 Does and Don’ts Do: Shop for healthcare insurance every year Open enrollment: Medicare D 11/15/09 – 12/31/09 Medicare C 11/15/09 – 3/31/10 Most individual plans now – 12/31/09 Don’t wait till the last minute to shop – it’s too important a purchase! © 2010 GOODCARE.com

The Medicare Check-up :

The Medicare Check-up Annual insurance review Select the best most economical plan based on individual needs: Medications Healthcare Providers Life style Making the wrong choice may end up costing $$$$$! © 2010 GOODCARE.com

Forecast for Medicare :

Forecast for Medicare (con’t) :

Renewed role of Medigap :

Slide 41:

Daily Long Term Care Charges Selected US States :

The Long Term Care &Elder Care Epidemic:Impact of the CLASS Act :

© 2010 GOODCARE.com The Long Term Care &Elder Care Epidemic:Impact of the CLASS Act Voluntary federal home care insurance $50 - $75 per day cash benefit Must pay in ≥ 5 years before eligible for benefits Available through employers Portability issues unclear Available by 2012

What’s Happening on the National Scene? :

Walking a tight rope! :

Maintaining Balance :

Resources :

© 2010 GOODCARE.com Resources Financial Planning Association Summary of the Patient Protection and Affordable Care Act PDF download @ http://www.fpanet.org/docs/assets/ThePatientProtectionandAffordableCareActsummary-final1.pdf Call GOODCARE.com for a consultation (866) 696-6543

Things to Think About: :

Become familiar with healthcare costs :

Long-term care cost risk :

Planning actions to advise your clients about: :

Planning actions to advise your clients about: Advise not to let health insurance lapse Encourage them to shop for: Insurance – Open enrollment season is now Plans, coverage & pricing change yearly Other healthcare goods and services © 2010 GOODCARE.com

Planning actions to advise your clients about: :

Planning actions to advise your clients about: Deal with the Long-Term Care cost risk Apply for Medicare 3 months < 65th birthday Cash planning: ≤ 3 months LTC cost liquid More if planning “the move” soon © 2010 GOODCARE.com

How this fits in your business model :

Coming Attractions FPA's Virtual Learning Center :

October 9 – 12, 2010Healthcare Track :

October 9 – 12, 2010Healthcare Track © 2010 GOODCARE.com What’s happening now with Medicare Protecting your older clients with memory loss Managing health issues for aging clients New ins/outs of obtaining health insurance coverage Eight steps in special needs planning Hot issues in healthcare

Plan for Clients Healthcare Costs

Presentation Description

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Presentation Transcript

Planning & Preparing for your Client’s Healthcare Costs :

Slide 2:

Agenda :

What’s on your mind? :

How this fits in your business model :

How this fits in your business model :

The Healthcare Puzzle :

Let’s Talk Language :

Disposable Personal Income Spending Shares :

Share of Healthcare Spending :

Healthcare Inflation & CPI Inflation Rate Comparison :

Why “average” doesn’t always mean “average” :

Out of Pocket Healthcare Expenses :

Walking a tight rope! :

Maintaining Balance :

Healthcare Market Factors for Financial Advisors to Include in Retirement Planning: :

Healthcare Financial Planning in Retirement: Strategies :

Things to Think About: :

Become familiar with healthcare costs :

Construct a Healthcare Budget :

Slide 21:

Here are the key questions to ask: :

George (58) & Florence (60) :

Consider Becoming an Entrepreneur :

Slide 25:

Slide 26:

How to be a Good Healthcare Shopper :

Impact of “Healthcare Reform” on folks < 65 yrs. old :

Impact of “Healthcare Reform” on folks < 65 yrs. old (con’t) :

The Massachusetts Experiment :

Planning Strategies for Clients' Transition to Medicare :

65 is the Great Divide :

The “Alphabet Soup” of Medicare :

Medicare C aka“Medicare Advantage” :

“Medigap” – It’s like adding crackers to the soup – it fills the gaps :

Open Enrollment 2010 Does and Don’ts :

The Medicare Check-up :

Forecast for Medicare :

Forecast for Medicare (con’t) :

Renewed role of Medigap :

Slide 41:

Daily Long Term Care Charges Selected US States :

The Long Term Care &Elder Care Epidemic:Impact of the CLASS Act :

What’s Happening on the National Scene? :

Walking a tight rope! :

Maintaining Balance :

Resources :

Things to Think About: :

Become familiar with healthcare costs :

Long-term care cost risk :

Planning actions to advise your clients about: :

Planning actions to advise your clients about: :

How this fits in your business model :

How this fits in your business model :

Coming Attractions FPA's Virtual Learning Center :

October 9 – 12, 2010Healthcare Track :

Slide 57:

Thank-you! :