How to help clients optimize Health Savings Accounts for retirement

Posted by Ryan McCostlin on Fri, Sep 07, 2018 @ 09:09

Check out this article on healthcare costs in Financial Advisor:

As financial advisors and wealth managers know, there are lots of ways to help clients plan for retirement. Different strategies work better for some Americans than others, but most advisors agree that the most obvious strategies are maximizing investments in traditional retirement accounts such as 401(k)s and Roth or Traditional IRAs.

If your clients have the means, maximizing investments in these accounts is a smart strategy. However, there is another kind of retirement account that many consumers aren’t yet taking advantage of—health savings accounts (HSAs).

Much has been written about how these accounts can be used to pay for health-care expenditures tax-free, but savvy consumers are increasingly seeing the opportunity to use these accounts primarily as a tax-advantaged retirement vehicle.

Financial advisors are in a position to help clients better understand this option and how it can serve as another tool in their retirement strategy. Below are a few things advisors should know—and can help clients understand—about using HSAs as a retirement account.

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Tags: financial advisors, wealth managers, healthcare extension, healthcare advice, retirees, short-term health insurance

Are short-term health insurance plans a good fit for your clients?

Posted by Ryan McCostlin on Fri, Jul 06, 2018 @ 08:07

Check out this article on healthcare costs in Financial Advisor:

As health-care costs continue to rise and become a more substantial financial concern for Americans at every income level, financial advisors are increasingly being asked to weigh in on strategies for insurance and medical costs.

One option that advisors may be asked to weigh in on is the short-term medical plan. These plans are significantly cheaper than comprehensive coverage—premiums are often a fraction of the cost of traditional coverage. This is because they cover a lot less.

More Americans are becoming aware of short-term plans as an option because their coverage costs are rising so quickly. Further, President Trump’s administration has issued guidance to extend these plans and make them more competitive options against traditional, comprehensive coverage.

In some cases, choosing a short-term strategy can help your client avoid thousands in unnecessary premium costs. In other cases, selecting a short-term plan may expose your client to significant financial liability.

In either case, having a good grasp on these options and their differences allows financial advisors to help clients protect themselves and make the best decisions for medical coverage.

Here’s what financial advisors need to know about short-term plans, the risks of purchasing them and a few situations where they may be a good fit for your clients.

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Tags: financial advisors, wealth managers, healthcare extension, healthcare advice, retirees, short-term health insurance

How to help early retirees maintain health coverage

Posted by Ryan McCostlin on Fri, Jun 08, 2018 @ 06:06

Check out this article on healthcare costs in Financial Advisor:

Through inheritance, sale of a business or just old-fashioned careful financial planning, some Americans are in a position where they're giving serious consideration to retiring “early.” I put early in quotations because, for practical purposes, this just means someone is retiring before Social Security benefits are traditionally taken and before most people are eligible for Medicare at age 65.

Medicare isn't perfect, but for most people, it's an important milestone because it often provides more comprehensive healthcare coverage at a lower cost than is available to most Americans who don't have access to employer-based coverage. Furthermore, most people can get excellent coverage through Medicare without being subject to medical underwriting, which could include questions about pre-existing conditions or requests for medical records.

However, most clients retiring before age 65 won’t be eligible for Medicare. So a key factor in decision-making will be how to handle health-care costs and coverage in the gap years.

Here’s how financial advisors can help.

Things To Consider:

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Tags: financial advisors, wealth managers, healthcare extension, healthcare advice, Medicare Advice, ThinkAdvisor, retirees

High-earning small business owners can save thousands by switching to Medicare

Posted by Ryan McCostlin on Mon, May 14, 2018 @ 08:05

Check out this article on healthcare costs in Financial Advisor:

With healthcare costs rising much faster than inflation, planning ahead for health-care expenses has been increasingly material to financial advising. But integrating care expenses into retirement planning is only part of the puzzle.

Ensuring that clients not only have enough in their retirement plan to cover healthcare expenses, but also have the most cost-effective strategy for their health coverage, is part of comprehensive financial planning.


In this column, I’ll explain how advisors can help clients save up to $12,000 annually by transitioning to Medicare. This is a situation that we see often for professionals who are partners or business owners in their organization, and nearing retirement age. For this example, we’ll use a client who works as an attorney and firm partner.

I’ll cover why transitioning off the group plan is often the right strategy, what Medicare choices are available, and how asking the right questions can uncover the best, most cost-effective coverage option for your client.

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Tags: financial advisors, wealth managers, healthcare extension, healthcare advice, Medicare Advice, ThinkAdvisor

Which kind of healthcare advisor will you be?

Posted by Ryan McCostlin on Wed, Mar 21, 2018 @ 09:03

Check out this article in ThinkAdvisor:

Not all financial advisors and wealth managers are cut from the same cloth. Some focus almost exclusively on growing clients’ liquid assets. Others encourage clients to call them before making any big financial decision—”Don’t buy a car without calling me first!”

But whether you take a more hands-on or hands-off approach with your clients' financial planning, healthcare should be included in comprehensive retirement planning.

According to the most recent estimate from Fidelity Benefits Consulting, a 65-year-old couple retiring this year will spend $275,000 on health care, not including long-term care expenses.

This is up by $15,000 from 2016, and as health care costs continue to rise, this number is likely to increase substantially every year.

Because of this, more advisors are recognizing that health care plays a role in the advice they give their clients around retirement and investing. There are two approaches advisors are taking. The first approach takes clients’ expected and unexpected health care costs into consideration. The second, more hands-on approach, adds additional customized consulting. This ensures clients not only plan for their expenses, but that they choose the most cost-effective health care strategies.

Here’s what advisors should know about each approach.

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Tags: financial advisors, wealth managers, healthcare extension, healthcare advice, Medicare Advice, ThinkAdvisor

3 questions to ask when you're looking for a health partner

Posted by Ryan McCostlin on Wed, Jan 24, 2018 @ 07:01

Check out this column in ThinkAdvisor!

As health care costs continue to rise, financial advisors are increasingly building health care consulting services into their value proposition to clients. The issue is material to wealth management — health care costs in retirement are estimated at $275,000 for a couple retiring this year, according to Fidelity Benefits Consulting.

More financial advisors are recognizing that strategically evaluating health care and insurance costs is key to an effective retirement strategy. But most financial planners and wealth managers aren’t insurance experts themselves, which has led to a partnership between two industries — health care and benefits advisors and wealth management experts.

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Tags: financial advisors, wealth managers, healthcare extension, healthcare advice, Individual Plans, Medicare

Smart financial planners step up to fill gaps in healthcare advice

Posted by Ryan McCostlin on Mon, May 08, 2017 @ 12:05

A 'healthcare extension' gives clients the expert advice they need

I used to be really boring at cocktail parties. When a new friend would ask me about what I do for a living, I talked about solving problems in health insurance. Our team at Bernard Health has helped thousands of people make better decisions around health insurance and Medicare. But who wants to hear about that at a cocktail party? My social skills could have been better.But two things happened that made me more interesting. Or at least less boring. 
  1. The Affordable Care Act and subsequent policy debates made health insurance sexy (sort of) for maybe the first time ever.

  2. I learned to stop talking about healthcare. I started asking questions about healthcare instead, and I was surprised by what I observed. The same people whose eyes glazed over when I brought it up became animated when they had space to talk about their own healthcare experiences and concerns.
My unscientific cocktail party research revealed that most people care deeply about healthcare. They don't necessarily want to talk about wonky topics like population health or cost sharing reduction subsidies, but they have strong opinions and some anxiety around physician networks and prescription coverage. It turns out that healthcare - how to plan for it, how to maintain it, how to pay for it - isn't just a conversation for analysts and journalists. As long as they're given the space, everyday Americans want to discuss it.

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Tags: financial advisors, wealth managers, healthcare extension, healthcare advice, Individual Plans, Medicare, Medicare Advice

5 things to know about the health exchange

Posted by Alex Tolbert on Sun, Oct 06, 2013 @ 22:10

Tuesday was one of the biggest days in the history of healthcare in the United States.

It marked the opening of the health insurance exchanges, including Tennessee’s, which is run by the federal government. The opening was clouded by the government shutdown and technical glitches that prevented many from being able to use the exchange website. Open enrollment will last until March 31, though, so there is still plenty of time for health care consumers to explore whether they can save with the new plans, or apply for private coverage for the first time without the risk of being declined.

Part of the idea of the exchange is to make it easier to sign up for coverage. Health insurance is super complicated, though, so don’t be surprised if you find yourself getting frustrated while trying to choose a plan.

With that in mind, here are five things to consider when signing up:

1. The marketplace and the exchange are one in the same. The government originally called the place where insurance would be bought and sold an “exchange.” Then it called it a “marketplace.” If you have been referring to it as an “exchange,” don’t be confused when you go to and see the word “marketplace.” It’s the same thing.

2. BlueCross’s new Network E is only available on the marketplace. Created solely in anticipation of the influx of people signing up under reform, Network E plans include Saint Thomas but don’t include Vanderbilt or HCA hospitals. As a result, Network E plans are the most affordable. However, the only place you can sign up for Network E is on the marketplace. Small employers still utilizing a group plan are not able to offer this option to their employees, and you can’t sign up for it as an individual off of the marketplace.

3. Baptist Hospital is the same as Saint Thomas. You might have noticed the billboards around town declaring this fact, but what you may not know is the two have been part of the same hospital system for years. This is just the first time they have been marketed as one unit. Many believe part of the reason they are clarifying this is so people don’t avoid Network E because of mistakenly thinking that “Baptist” is not in-network with Network E.

4. Subsidies are only available when health insurance is purchased on the marketplace. Middle-income individuals who are not eligible for qualified coverage through their employer can apply for a subsidy through the marketplace. How much would the subsidy be? We can get an idea from the Kaiser Family Foundation’s subsidy calculator. For a 40-year-old single adult in Tennessee making $20,000 per year, Kaiser projects a subsidy of $746 to offset the annual cost of health insurance (projected at $1,768). For a 40-year-old with a family of four making $60,000, Kaiser projects a subsidy of $867 toward an annual premium of $5,780.

5. Platinum isn't always better than bronze. In fact, it’s difficult to come up with situations where a platinum plan would be better than a bronze plan.

Let’s take our 40-year-old, nonsmoker for example. The monthly premium for a bronze plan with a $5,300 deductible is $148.62. A platinum plan with a $1,500 deductible costs $473.99. Some might choose the platinum plan observing that it has a lower deductible than the bronze plan. But the premium difference between the two — $325.37 per month, or $3,904.44 per year — more than outweighs the difference in deductible. Why? Because if you pick the Bronze plan, you save $3,904.44 in premiums that you can use toward that higher deducible if you need to. If you don’t, you keep the difference and can spend the savings on things that are more fun than health insurance.

There are other considerations that could make a platinum plan right for you, but take some time to really run the numbers and understand what you are getting.

The new exchanges, while not perfect, give consumers a huge opportunity to save on health care. Whether you qualify for a subsidy or not, all the new options make it worthwhile to explore if there is something out there that is a better value for you and your family.

Have you tried to sign up for health insurance since October 1st? What is your experience? Would you add anything to this list?

If you enjoyed this post, you may also like 11 things you must know before buying health insurance on the exchange

This article originally appeared in The Tennessean. 

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Tags: healthcare advice, healthcare reform

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