A financial planner explains the health care choices to consider


Dr. Carolyn McClanahan, CFP at Life Planning Partners, joins Yahoo Finance Live to break down the healthcare and health insurance options investors should consider when planning for retirement.

Video transcript

Brad Smith: Well, one area where you always want to have less debt and more money is for sure retirement. A new report from the U.S. Department of Health and Human Services finds that private health insurance plans have denied 18% of claims allowed under Medicare coverage rules, which is about 1 and 1 /2 million payments for all of 2019. So what does this mean for the future of Americans’ health insurance plans?

Big question here – here to discuss all of this we have Dr. Carolyn McClanahan, who is the founder of Life Planning Partners Incorporated as part of our retirement segment presented by Fidelity Investments. Doctor, glad to have you with us today. So first and foremost, when people are planning for this, when they finally get to retirement, how can they avoid some of the biggest pitfalls when it comes to having health insurance and the appropriate health care?

CAROLYN MCCLANAHAN: Right. The choice you have to make when you turn 65 is, will I go for traditional Medicare or will I go for Medicare Advantage? And that report that you quoted is actually about Medicare Advantage denials. So when you go with traditional health insurance, it’s basically the government that approves the claims. And traditional medicare has…they’re very good at approving claims.

Medicare Advantage is managed by private insurers. And so they are more likely to deny claims because it makes them more money when they deny claims. So it’s an important choice that people have to make. And people need to understand the pitfalls of traditional Medicare versus Medicare Advantage.

Brad Smith: When should people start their registration process?

CAROLYN MCCLANAHAN: The enrollment process begins when you are 65, you must enroll in Medicare A. And if you are not employed, Medicare B. And you must also purchase Medicare – a Medigap plan that covers all gaps traditional health insurance. . If you continue to work, however, which we always encourage people to work as long as they can because it’s healthier for your brain and your finances, then you can delay Medicare B and Medigap plans if you work for a large employer.

It is therefore important, however, to ensure that you register quickly when you leave, because if you do not you may have penalties and ongoing fees that you will have to pay for the rest of your life. It is therefore important that people know their health insurance options.

Brad Smith: I’m sure people would rather just play Wordle and consider it work to keep your brain active and fresh.


Brad Smith: Yeah.


Brad Smith: But one thing that might change the way Medicare considers and calculates health care for retirees, might be adaptive technology when we think of all the new solutions out there, either from the comfort of your home, and some of these home gyms and how much data they might even pass on to healthcare providers? Do you see this changing the future of pension and health insurance plans in the future?

CAROLYN MCCLANAHAN: My God. People always look to technology as the answer. But as you age, it’s so important to have good relationships with real people and your doctors to help you take care of yourself. And so one of the problems with Medicare Advantage is that you’re now locked into a network of doctors and you don’t have a choice between those doctors.

And so they can rely more on technology, which technology is good for certain things. But ultimately, health care decisions are very personal. And with Medicare Advantage, as long as you’re healthy, you’re fine. But once you have a serious illness, if you don’t like the way the doctors treat it– or let’s say your doctors leave the system, well, you’re out of luck, because you’re not going to you don’t have a choice, whereas with traditional health insurance you can still get that personal care and not have to acquiesce to whatever the insurance company wants to do or not do for you.

Brad Smith: A major consideration that has arisen over the past two years is how COVID would be looked at from a health care perspective and whether it would be treated as an ongoing or existing condition. What have you heard about what is covered by health insurance plans, what is covered and what is not?

CAROLYN MCCLANAHAN: Well, if we’re talking about pre-retirees, so pre-Medicare, the problem with COVID is that it’s considered a pre-existing condition. Now, the good news for health insurance is that health insurance in the United States, thanks to the Affordable Care Act, is guaranteed. So they can’t charge more or deny you health insurance because you had COVID. But where it starts to affect you, though, is if you need disability insurance, life insurance, long-term care insurance – if you have severe symptoms from a long COVID or any residual effects, they may deny you coverage or increase your premiums to provide coverage.

Brad Smith: What kind of process should people be prepared for when considering retiring and enrolling in any type of health insurance, considering some agencies, regulators, and even from the Social Security Administration – some of their staff are off some of the peak levels we’ve seen in the past. So with that in mind, what should they prepare for?

CAROLYN MCCLANAHAN: My God. You know, it gets more complicated. And I hate that, because the older you get, the less you want to deal with complications. And so I always caution people when enrolling in Medicare, get someone to help you – ideally an independent insurance agent, not an agent who works for one company.

Agents are very, very focused on selling Medicare Advantage, so you don’t want anyone pushing you. You can also hire a financial advisor and pay by the hour to help you navigate the Medicare enrollment process. For people who are still working, sometimes their HR departments will help them with this process.

Brad Smith: Joining us this afternoon is Dr. Carolyn McClanahan, who is the founder of Life Planning Partners. We appreciate the information on what is a very tricky situation for some people to go through. Thanks a lot.


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