The number of employers offering group health coverage to retirees has continued to decline. Twenty-five percent of employers, with more than 200 employees surveyed by the Kaiser Family Foundation reported offering retiree health benefits in 2012. This is down from 32 percent in 2007. In 1988, nearly two-thirds of employers (66 percent) offered retiree group health coverage.
“With the decline in employer retiree health benefits, boomers planning for retirement and seniors who are losing retiree health benefits need guidance,” said Paula Muschler, manager of the Allsup Medicare Advisor (AMA), a Medicare plan selection service to seniors and people with disabilities.
It’s important to understand the deadlines for first-time enrollment and possible penalties if those deadlines are missed, according to Allsup. Those turning 65 have three months before their birthday, the month of their birthday and three months afterward to make their Medicare plan selections without penalties.
Financial advisors can assist their clients with overall retirement health-care planning. “Along with Medicare timing and coverage options, financial advisors can help retirees examine their anticipated health-care needs and financial resources,” Muschler explained. “Health care is one of the primary financial concerns for seniors, and financial advisors can reassure their clients with careful preparation and expert Medicare assistance.”
Muschler encourages advisors to discuss Medicare plan selection with their clients as they approach their 65th birthday. On average, seniors have 31 plans for prescription drug, or Part D, and 20 plans for Medicare Advantage coverage from which to choose.
Other factors affecting coverage could include a spouse’s coverage, if they are still working, as well as veteran’s health-care coverage, which might affect Medicare choices.
Issues that can influence someone’s choices about Medicare include their health-care condition, anticipated procedures, prescription drug needs, financial resources, and plans for travel and relocation in retirement.
Financial advisors can play an important role in helping clients consider these factors and the complexities of Medicare before it’s too late. “If a client is past their initial enrollment period, then financial advisors can intervene to help them make wise choices going forward,” Muschler said.