Nationwide Financial launched a tool Tuesday that aims to help advisers estimate their clients’ health care expenses in retirement, which most Americans fail to plan for, the company says.

Due to the large misconception about what is covered by Medicare — typically it covers 51% of expenses associated with health care — there is a large opportunity for advisers, says John Carter, president of Nationwide Financial Distributors Inc.

The Personal Health Assessment program, as the tool is called, uses health risk analysis and up-to-date actuarial cost data such as personal health and lifestyle information, health care costs and medical coverage that it then analyzes and works to identify a “meaningful, personalized” cost estimate.

Most Americans “aren’t thinking about — much less planning for — their health care costs in retirement,” Carter explains. “Many assume their employers will continue to pay their premiums during retirement or erroneously believe Medicare will cover all health care expenses. … The good news is that consumers want help.”

The assessment begins with a questionnaire on the client’s health history, lifestyle and family history of medical conditions, and then produces a report offering suggestions for decreasing health risks. The tool further provides “what-if” scenarios, such as how will a change in a client’s year of retirement affect out-of-pocket health costs.

“Retirees must plan for many decisions, most of them guided by law, between the ages of 55 and 77½. These decisions may largely influence retirement behaviors as well as long-term financial adequacy — how and when they withdraw, and how to get the most from retirement benefits like Social Security and Medicare,” says Carter. “This means that clients need to be educated before and after retirement to make decisions at these key ages. Advisers have the opportunity to play a major role in educating and guiding pre-retirees to achieve their retirement goals and live better, healthier lifestyles.”

Register or login for access to this item and much more

All Employee Benefit Adviser content is archived after seven days.

Community members receive:
  • All recent and archived articles
  • Conference offers and updates
  • A full menu of enewsletter options
  • Web seminars, white papers, ebooks

Don't have an account? Register for Free Unlimited Access