A recent Wall Street Journal article by Drew Altman, President and CEO of the Kaiser Family Foundation, reports on the connection between health insurance and financial security. The article is based on Kaiser Family Foundation polling of California residents who obtained health insurance after the Affordable Care Act took effect.
As Altman explains, “85% of those who remain without coverage in California say it is ‘very’ or ‘somewhat’ difficult to afford health care.” This is significantly higher than the 66 percent of respondents who have “trouble paying the rent or mortgage…as well as paying for gas (57%), utilities (51%), or food (44%).”
When people have health insurance, health care expenses are still a concern, especially with today’s rising out-of-pocket costs, but they’re much lower on the worry list: those with health coverage have more difficulty paying for housing, utilities, and gasoline than medical expenses.
This is important information for people who provide financial advice to their clients. While it makes sense that lower-income individuals are less likely to have a financial planner, these folks are also more likely to qualify for Medicaid or significant government subsidies in the individual market. It’s actually higher-income clients, who have to pay the full cost of their health insurance, who may make the decision to go without health insurance. Unfortunately, they also have more to lose if they have a big unexpected medical event. This means that it is imperative for financial advisors to talk with them about their health insurance needs
To this point, much of the health insurance discussion between planners and their clients has been focused on the relatively low individual mandate penalties versus ever-increasing health insurance premiums. The conversation really shouldn’t be limited to a “play or pay” analysis, but rather about making sure their clients have comprehensive health coverage. By doing so, financial advisors can reduce a significant area of exposure and move on to other products that will help their clients achieve their short- and long-term financial goals.
At AHCP, we work with agents of all shapes and sizes. Some specialize in individual insurance products, some focus on property and casualty, and some are financial advisors that include health insurance on their checklist of topics to discuss. No matter what products are being sold, many of them realize their clients may have health insurance needs. If you’re a financial advisor who knows you should be talking with your clients about health coverage but aren’t sure where to start, we’d be happy to help. Give us a call today at 877-228-8773.