Webinar Recap: How to Implement an Effective Healthcare Planning Strategy

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Caribou’s co-founder, Christine Simone, joined Amanda Stahl, Director of Longevity Planning at Raymond James, and Cynthia Hoes, Associate VP of Business and Program Strategy at Nationwide Retirement Institute, to discuss the risks healthcare costs put on clients' wealth during the Advisor Perspectives Market Outlook Summit. Moderated by Suzanne Syracuse, CEO of Suzanne Syracuse Consulting, the three discussed several topics, including:

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• What is healthcare planning and why it's valuable.
• Important healthcare statistics financial advisors should be aware of.
• Key healthcare planning events.
• And more.

If you’d like to hear the whole discussion, the full video is available above. For those who want a quick recap, here are a few key highlights:

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Christine Simone, Caribou: “We're going to dive right in with a question that is probably top of mind for all of you. And that is: what is healthcare planning? At Caribou, we define healthcare planning as a comprehensive overview and optimization of clients' present and future healthcare costs based on personalized needs and budgets. I know it's a mouthful, so we're going to pull out a few keywords here that highlight this important definition. The first is ‘optimization’. Healthcare planning is not a once-and-done activity. It is something that can be continuously planned for with different scenarios; introducing different cost-saving opportunities as clients' needs change. We encourage advisors to continuously revisit it throughout their client's financial planning activities. The next key phrase is ‘present and future health care costs’. My needs today are very different than my needs in 10 years and my needs in 20 years thereafter. To plan for these costs, ask clients questions to uncover what they're spending today, but also know that those needs will change as they transition through different life stages. Next, is ‘personalized needs’. There is no one-size-fits-all, cookie-cutter approach to healthcare planning. It is very individualized and very personalized, and at the bare minimum based on clients' health needs and their individual budgets.”

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A key part of the webinar was the discussion on three major life events financial advisors can use to introduce healthcare planning into their offerings: Medicare, retirement, and legacy planning.

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Amanda addressed the first of the strategies.

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Amanda Stahl, Raymond James: “We really recommend that our advisors start off with Medicare when they're getting into some of these extra services. When it comes to healthcare planning for their clients, it's a very natural extension to the conversation around Social Security, which I'm sure most of you are having with your clients when it comes to those financial planning conversations. It can be a very, very valuable resource for clients. It's a very individual decision and a lot of these plans are localized. They don't need to just go with what their neighbor did or what their sister's doing. They need to take into account their medications, their preferred doctors, and their preferred hospitals. This is a really great opportunity for you to connect them with a trusted agent or service that you choose to utilize to help them find what their best Medicare plan is going to be. A great marketing opportunity for financial advisors is reaching out to clients leading up to their 65th birthday, either during that Initial Enrollment Period or every year during open enrollment, and letting your clients that are already enrolled in Medicare know that the time is approaching when they can make changes to their plans. An MIT AgeLab AIG study came out saying ‘53% of the respondents wanted their financial professional to connect them with their network.’ So this again is a great opportunity for you to be providing that satisfaction to your clients.”

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Christine then followed up, shedding light on how to discuss healthcare in the context of retirement.

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Christine Simone, Caribou: “Retirement planning is an opportunity as well to look specifically at healthcare costs. And that's because we've heard anecdotally that healthcare can be one of the biggest considerations at retirement, if not the top one. There are a couple really key things to keep in mind during this transition period. The first is that employer plans, when it comes to health insurance, can be very different in design, cost-share, or in financial exposure. So the options available for clients at retirement can seem very different, and that's true of Medicare or pre-Medicare clients. In addition, there is typically relocation or travel that's associated with retirement. So if your client worked in New York, for example, for the last 20 years but is planning to retire in a different state in the south where their second home is located, that can very drastically differ the associated costs of their health insurance plan, or just their general medical expenses as well. Aside from Medicare, there are five traditional options for health insurance for retirees: COBRA, their spouse’s plan, the Marketplace, private insurance, and pre-65 retiree benefits. 

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Cynthia shared her industry knowledge on legacy planning to wrap up the last of the three main strategies. 

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Cynthia Hoes, Nationwide Retirement Institute: “You're going to see threaded throughout the legacy planning segment here how there's a significant opportunity to think about, ‘How do you approach your clients’ family and that multi-generation approach to holistic healthcare planning strategies?’ We found that 87% of people think it's more important than ever to stay at home for long-term care, especially coming off the recent pandemic. So living a long life is something that we all strive for, but there are certain risks that come with longevity that we also need to be carefully planning for as well. Specifically, there are three main types of longevity risks that we need to be consciously thinking about. The first one is cognitive. For example, if a client experiences mental decline, it can lead to legal incapacity. And in turn, this could lead to the need for legal guardianship. It's important that this is proactively planned for and accounted for well in advance of that being a factor. The second one is physical risk and that's, for example, if physical mobility declines. It may mean that the client's no longer safe in his or her own home. Both a best and worst-case scenario, again, should be part of the proactive planning discussion. The third one is financial risks or the chance of someone needing that long-term care or other costly healthcare, which ultimately is going to increase with age. So the bottom line really is, as you're helping your clients face aging with dignity and confidence, it's all about planning, longevity, and more years in retirement. It's something we're all striving for, but it means more planning and more demand on one's income.”

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To hear the whole discussion, plus the bonus strategies advisors can use to incorporate healthcare planning into their financial planning services, watch the video above. If you’re interested in seeing how healthcare planning can benefit your firm and your clients specifically, our team would be happy to speak with you.