Finally, she says, the analysis comes down to an estimate of net out-of-pocket costs under the various plans-everything else being equal. While decent health coverage is what we all want for clients, the questions and probing conducted along the way ensure that the critical risks have been anticipated and that the coverage chosen truly fits. The questions Campbell asks to uncover those risks include:
Do you plan to have more children?
Do you travel overseas frequently?
Do you spend part of the year in another state or outside of your PPO network?
Do you plan to move to another state in the near future?
What these questions have in common is that they are about lifestyle, not health-another indication that our industry is moving toward a life planning model. If you don't look at the client as a person and plan for him and his family holistically, you will miss your intended target. By asking revealing questions like these, Campbell may find her client is exposed to the risk of a coverage gap. "Many clients between the ages of 55 and 64 have difficulty obtaining an individual policy if they leave their group coverage due to certain health conditions," she says.
What if the client moves to a different state before Medicare age-a state in which his present carrier doesn't write coverage? Or what if the client doesn't understand the coverage she has and fails to use it efficiently? Campbell recalls one of her clients, a physician, who was filling his prescriptions through his hospital's pharmacy, because he found he spent less, per prescription, than he would paying retail. "However, we discovered he would have paid less over the course of a year, once his prescription deductible was met, had he filled the prescriptions through a network retail pharmacy using his existing health insurance. The client believed he was benefiting from the tax deduction for the prescriptions and, although he did itemize them on his tax return, any deduction was entirely phased out by the AGI limitations."
Can all advisors perform the kind of thorough analysis Campbell's firm does? Yes and no. It depends not just on an advisor's own familiarity with health insurance or on life planning skills, but on business considerations as well, like, "Have I built enough room into my fee schedule to justify spending the time required to do a proper health analysis?"
One way out is to recommend a certain type of health plan-one in which you have complete faith-to most of your clients. Says Rousso, "HSAs are really all advisors need to know about today. They're the HMO/PPO of our time, and they will endure." Rousso explains HSAs this way: "Let's say your health plan is a car, catastrophic insurance is analogous to a long road trip, and an HSA is like a car with just fifth gear. The client has to push the car for a while to get it started since he pays for everything between $0 and his deductible (first through fourth gears). However, because HSAs have only fifth gear, the car costs you half as much to buy, and, if it stays garaged for ten years, that savings belongs to you. I know people paying $2,000 per month for health insurance; if I can cut their premiums in half, that's substantial." With an HSA, the client thinks twice about taking that "road trip" since he'll have to push the car part of the way. Instead, he accepts generic instead of brand-name drugs and perhaps takes antibiotics rather than going under the knife.
The question is, do HSAs fit all clients, and most advisors will answer "no." Rousso, however, says he can tailor an HSA to fit almost any client-but that's the subject of another article.
What do the rest of us do who can't give the client's health program the thorough review it demands? We seek qualified outside help, says Marcy Burton, chief marketing officer for Partnervest Financial Group LLC, a company offering broker-dealer, RIA and insurance services to 70 advisors with $1.5 billion in assets. Burton describes how Partnervest helps its affiliated advisors help their clients: "About 85% to 90% of our advisors are insurance-licensed, and most do comprehensive financial planning, but we don't want them all to be experts in health insurance." Partnervest attracts or partners with a variety of specialists, such as CPAs, employee benefits experts and property-casualty insurance specialists. "We are proponents of a team approach, so if a client comes in with a health issue, the advisor calls the specialist in his geographic area and sits in on that person's presentation."
Ultimately, she says, "There are only maybe three carriers-Healthnet, BCBS and Aetna-that are really involved in the business. You have to trust they're going to follow through, and you have to monitor them constantly." And the best way to do that, says Burton, is to partner with an employee benefits specialist or other trusted professional.
And that, in the end, is what most full-service, conscientious professionals will do.