Northeast Florida has experienced a dose of trauma in the past month: Hurricane Matthew, our minor league baseball team’s name change from the Jacksonville Suns to the Jacksonville Jumbo Shrimp, and the burden that we are considered a “critical county” in the presidential election.

The “critical county” designation has resulted in unending robo-calls, a television ad assault, two visits from Republican presidential candidate Donald Trump, two by former President Bill Clinton, one by President Barack Obama, and numerous visits from a myriad of other supporting cast members for both presidential candidates – Democrat Hillary Clinton and Trump.

We look forward to Tuesday.

MUCH DRAMA

In an election lead-in that has been long on drama and short on substance, the comments of our clients boil down to two things: A President Clinton would be more of the same, which some clients consider good and some consider a disaster. A President Trump would be a huge upheaval, which some clients consider good and some consider a disaster.

Bloomberg News

Our clients’ biggest concern, however, is health care. Costs continue to go up, the complexity of the system is overwhelming, clients employed in the health care industry are unhappy, and patients feel the system is failing them. How would a Trump or Clinton presidency affect the healthcare system and health-care costs? Strikingly, as I travel around the country speaking about those costs, the planners I meet share the same worries as my clients.

PLACING HEALTH CARE BLAME

The Affordable Care Act, more commonly called Obamacare, is blamed for the many woes in our healthcare system, but people have amnesia about the previous system. We already had spiraling health care costs, the system was fragmented, and about 50 million people were uninsured. Obamacare succeeded in that the number of uninsured now stands at about 28 million. This is the lowest-ever percentage of uninsured, despite many states not expanding Medicaid to the poorest populations.

Obamacare failed in that it did not adequately address cost or simplification of our healthcare system. As a result, we have the most expensive and fragmented health care in the world. What do the candidates intend to do about this?

A President Clinton wants to repair Obamacare. What are some of her plans and how will they affect clients?

  • Expand premium tax credits so families would not pay more than 8.5% of income on health insurance. We have a number of early retirees and by planning carefully, we have saved them thousands of dollars by utilizing premium tax credits. This will save them even more money.
  • Create a public option for health care. This is huge and has potential to decrease all premium costs dramatically. Profits on exchange-based plans are not great, but this market is small. The rest of the market – employer-based plans, Medicare supplements and individual plans are creating record-breaking profits year after year. We don’t hear about this much. Competition from a public option will help everyone, especially business owners and self-employed clients.
  • Allow three free sick visits per year. With high deductibles, which are found in the majority of current plans, patients are reluctant to go to the doctor. But minor problems can become expensive health events if not treated early. Allowing three free sick visits should reduce costs and enable early access to care.
  • Allow people ages 55 to 64 to buy into Medicare. This is significant for early retirees as individual insurance premiums are age-based and very expensive. This will provide additional options to individual plans and exchange-based plans.

A President Trump wants to repeal Obamacare entirely. How will some of his plans affect your clients?

  • Make all health insurance premiums tax deductible. This will decrease the cost for people who are not employed and cannot deduct their health insurance, such as early retirees.
  • Allow people to enroll in health savings accounts, even without high-deductible plans. This will provide tax reductions for clients who have the resources to fund health savings accounts and will benefit clients in higher tax brackets.
  • Allow people to buy health insurance across state lines. This can reduce premium costs, however, it will also result in lower-quality policies. Clients will have to carefully evaluate policies to verify that they provide benefits that are important to them.
  • Insurance will no longer be a guaranteed issue and will be underwritten based on health. This will lower costs for healthy clients. Unhealthy clients will face higher premiums or might only be able to obtain coverage through high-risk pools.

The good news for advisers? No matter the election results, your clients will need help navigating changes in the tax and healthcare systems. Comprehensive planning will set them on the right path and they will be better positioned for the positives and negatives of what each candidate has to offer.

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Carolyn McClanahan

Carolyn McClanahan

Carolyn is a CFP and M.D., and is the director of financial planning at Life Planning Partners in Jacksonville, Florida.