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Medicare wake-up call for advisors and client alike

When advisor Shikha Mittra received a worried call from a client couple, she quickly learned they’d been far too hopeful about what Medicare could provide.

The husband, nearing retirement, unexpectedly needed long-term care but did not have private insurance coverage. He and his wife, to their dismay, discovered Medicare would not cover LTC and they’d have to pay out of pocket.

It was an expensive lesson for the couple.

It’s also a wake-up call for advisors who would recommend LTC insurance for certain clients. “Tell clients to get coverage earlier,” Mittra told Financial Planning senior editor Charles Paikert as he reported his feature, “How to help clients navigate the Medicare maze.”

“Dealing with Medicare is unavoidable when preparing for retirement and issues involving aging,” Paikert tells me. “As a result, financial advisors must be able to help clients navigate the critical choices they will have to make.”

The program is complex, even bewildering, to clients and advisors alike, Paikert found in his reporting. Surcharges levied on high earners can throw anyone for a loop and advisors could do a better job of summarizing policies for clients clearly. In addition, he says, “find some good Medicare insurance brokers in your region who you can work with.”

Medicare, longevity, health care costs — these are some of the most pressing retirement issues facing clients.

mcclanahan-carolyn
Toxic firm cultures deride people for saying they don’t know something or for making mistakes, says Carolyn McClanahan, director of planning at Life Planning Partners.

This is one of several reasons we’ve been eager to make Carolyn McClanahan a Financial Planning columnist. McClanahan, a CFP and director of financial planning at Life Planning Partners in Jacksonville, Florida, is also a medical doctor and had been a contributing writer since 2015. In recent months, she’s tackled topics that span her professional experience, such as helping clients with end-of-life planning, genetic testing decisions and handling bad news.

McClanahan is a vocal advocate for overhauling the health care system and improving clients’ medical education, as well as planners’ roles in both.

I’m reminded of a key point she made to us last year: Many retirement savers struggle to manage their government benefit programs on their own. That means “everyone should utilize advisors to help make Medicare and Social Security decisions.”

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