Women and Men Don’t See Eye to Eye on Medicare, Financial Advisors Should Heed the Distinction, Allsup Finds

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Allsup offers tips for financial advisors assisting clients with Medicare annual open enrollment.

Women are more worried about healthcare costs in retirement than men, and potentially with good reason, according to Allsup, provider of Allsup Medicare Advisor®, the Medicare plan selection service offering seniors personalized research and support.

“Women are more likely to live longer, have fewer financial resources and rely on Social Security as their primary source of income in retirement, so their financial risks are greater as they age,” said Mary Dale Walters, senior vice president, Allsup Medicare Advisor. “Living longer usually means greater healthcare expenses in retirement, such as more premiums.”

Specifically, a woman turning 65 today can expect to live until age 86 on average, which is two years longer than the average life expectancy of a 65-year-old man; about one in every four 65-year-olds today will live past age 90, according to the Social Security Administration.

“In addition, both women and men are unlikely to talk to their financial advisors about Medicare and their healthcare costs, which can add to their financial risk in retirement,” Walters said. The distinctions between the genders are covered in the Allsup Medicare Advisor® Report: Medicare for Women and Men, released today, which also includes a checklist for advisors working with couples. The report is based on analysis of research among 1,000 seniors age 65 and older conducted in 2012 by Market Probe, Milwaukee, exclusively for Allsup.

One key finding from Allsup’s report is that women are much less confident about whether they’ve saved enough for healthcare costs in retirement—with only 55 percent of women who are confident compared to 70 percent of men.

“Understanding the differences in attitudes, as well as having a realistic understanding of Medicare costs and healthcare expenses, is one way financial advisors can further help clients when planning for retirement,” Walters said.

For example, as the report outlines, when asked about their retirement concerns, women were more worried than men in each of four key areas: the future of Medicare coverage (63 percent women vs. 59 percent men), paying for long-term care (46 percent vs. 39 percent), paying for healthcare (43 percent vs. 38 percent) and outliving their retirement funds (40 percent vs. 35 percent).

“Advisors working with couples need to understand that not only may each spouse’s concerns be different, the optimum healthcare coverage for each also may be different,” Walters said. “For example, after decades of sharing the same private employer health insurance, couples may be better served by having different Medicare plans as they age into Medicare because their healthcare needs—and costs—are going to be different.

“It’s vital that every senior understands that the annual enrollment period presents a critical opportunity to confirm they are paying for coverage they actually use and have a Medicare plan that doesn’t cost them hundreds or thousands of dollars more than they need to pay for good coverage,” Walters said.

Financial advisors can help couples evaluate the factors that go into their clients’ healthcare choices and Medicare plan selections. There are dozens of Part D, Medicare Advantage and supplemental plans to choose from in each county— with varied coverage, premiums and out-of-pocket costs across seemingly similar plans. This evaluation process is comparable to reviewing each spouse’s retirement investment options, from mutual funds and stocks to annuities and exchange traded funds.

“There are many complexities that make healthcare coverage choices a bit more challenging now—spouses who age into Medicare in different years, working past age 65, and the availability of federal and state insurance exchanges for those under 65. The number of variables is increasing,” Walters said.

Tips for Financial Advisors: Medicare Choices for Women and Men

Following are key areas for financial advisors to address with their clients ahead of Medicare open annual enrollment, Oct. 15 through Dec. 7.

1.    Raise the topic of Medicare if clients have not brought it up—and few clients do. In fact, just 29 percent of women and 27 percent of men who are seniors and work with financial advisors said they had discussed Medicare with their advisor, according to the Allsup Medicare Advisor report. Therefore, advisors need to take the initiative in introducing the topic.

2.    When speaking with couples, recognize the differences between men and women. Each has different areas of concern. For example, women’s top concern is that monthly premiums for medical coverage will increase more than they expect, while men’s leading concern is out-of-pocket costs increasing more than they expect.

3.    Encourage clients to evaluate Medicare plan choices as a part of their full evaluation of retirement finances. Only 26 percent of women and 30 percent of men have budgeted for healthcare cost increases, and very few of these individuals have saved more than $200,000 for healthcare in retirement.

4.    Help clients to understand that buying Medicare is more than a monthly premium. There are additional costs and opportunities to save money. Understand that some clients may have unrealistic expectations and misunderstand the choices they make for Medicare.

“Paying a lot of money in premiums—‘just in case’ or in lieu of an on-point review and assessment of healthcare needs—is not an effective financial planning strategy,” Walters said. “Your clients may have biases that affect their decisions, such as Medigap versus Medicare Advantage, or a recognizable national insurance company versus a regional plan with an unfamiliar name. Help them recognize how this can affect costs.”

5.    Understand how the death of one spouse would affect the other. This is a particular concern for those who have retiree healthcare coverage; 25 percent of women and 28 percent of men said they have retiree healthcare coverage, according to the Allsup report.

6.    Relay the value of closely evaluating Medicare plans when clients first enroll in Medicare and during each subsequent Medicare annual open enrollment period. Health, finances and other living situations can change. These changes may provide opportunities to re-evaluate Medicare coverage and find plans that better meet clients’ needs and resources.

The Allsup Medicare Advisor is an affordable, flat-fee based service for Medicare-eligible individuals. It has features that help financial advisors guide their clients to the Medicare plans that match the clients’ specific lifestyles, budgets and healthcare needs. Employers also use Allsup Medicare Advisor for their employees who are retiring and transitioning to Medicare.

Financial Advisor Client Summary
The Allsup Medicare Advisor also provides financial professionals with a Financial Advisor Client Summary that outlines their clients’ Medicare decisions and their estimated annual healthcare insurance costs; a sample is available by contacting Allsup. For more information, financial advisors may go to FinancialAdvisor.Allsup.com, or call (888) 220-9678.

Anyone becoming eligible for Medicare may contact a Medicare specialist with the Allsup Medicare Advisor at (866) 521-7655.

Find more information in the Allsup Medicare Advisor® Report: Medicare for Women and Men on Allsup.com at http://www.allsup.com/portals/4/Allsup-Women-Men-Medicare-Report-2013.pdf.

Allsup is a nationwide provider of Social Security disability, veterans disability appeal, Medicare and Medicare Secondary Payer compliance services for individuals, employers and insurance carriers. Allsup professionals deliver specialized services supporting people with disabilities and seniors so they may lead lives that are as financially secure and as healthy as possible. Founded in 1984, the company is based in Belleville, Ill., near St. Louis. Visit http://www.Allsup.com or connect with Allsup at http://www.facebook.com/Allsupinc.

The information provided is not intended as a substitute for legal or other professional services. Legal or other expert assistance should be sought before making any decision that may affect your situation.

Rebecca Ray, (800) 854-1418, ext. 65065, r.ray(at)allsupinc(dot)com or
Mary Jung, (773) 429-0940, mtjung(at)msn(dot)com

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Mary Jung
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Rebecca Ray
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