Some 150,000 financial advisers will have access to estimates for retirees' health care costs thanks to a new partnership between the Insured Retirement Institute and HealthView Services Inc.
The IRI announced Tuesday that it would give its member firms – comprised of broker-dealers and insurers – access to HealthView Prime, a tool that helps advisers plan for clients' health care expenses in retirement.
HealthView Services recently launched its Retirement Health Care Cost Index and concluded that an average healthy couple that's retiring in 2015 will spend nearly 70% of their total life time Social Security benefits — $366,599 in today's dollars — on health care in retirement. The company predicts that costs will rise to 98% of total lifetime Social Security benefits or $421,083 in 10 more years.
There's also the matter of Medicare expenses and managing the cost of those premiums in retirement. Overall, HealthView Services concludes that healthy, affluent couples who retire next year in the top Medicare surcharge bracket can expect to pay $621,867 in lifetime health care costs.
The growing cost of health care services, plus the income and bracket management tied to Medicare expenses, have intrinsically tied health care with retirement planning.
“Medicare [parts B and D] includes surcharges based on income; you're looking at a significant number,” said HealthView Services chief executive Ron Mastrogiovanni. “You can use products on the shelf to manage income brackets, which can save your clients well over $100,000 in health care costs.”
In order to obtain its estimates, HealthView Prime uses data from 50 million health care cases to create projections of what costs will be for retirees. It also takes into account average longevity and expected health care costs in retirement based on age, gender and health.
As part of the agreement with IRI, HealthView Services will make its program available to IRI member firms and charge the firms based on adviser usage.
HealthView Services is well-known for the deal it has with Nationwide Life Insurance Co., under which it provides advisers with access to a health care cost planning tool.