Canada may enjoy a free healthcare system for its tax paying citizens, but there is still a real need for advisors to pay attention to health-related costs.
That’s the verdict of Sean Harrell, partner and senior advisor at Howe Harrell & Associates, as news broke about health spending in the US climbing to an eye-catching $3.1trillion, according to a report from the Centers for Medicaid and Medicare Services. That’s approximately $10,000 per person, every year. Harrell believes that while the situation is not the same in Canada, advisors still need to think of the big picture on healthcare when it comes to assessing the availability of their client’s funds.
“There isn’t much to worry about with actual healthcare costs in Canada besides prescription drugs,” he said. “However, I have run into situations with clients where their prescriptions are costing far more than they had anticipated. Obviously that is hard to plan for but it needs to be part of their plan as this seems to be more the norm with medical advancements and people living longer now.”
His words are certainly ringing true south of the border, where some advisors are seeing their clients paying out as much on drug co-pays as they used to for an entire health insurance premium. According to Anthony Domino, who is an advisor with Associated Benefits Consultants, healthcare reforms in the US may have changed the way health insurance is funded – but it hasn’t had an impact on healthcare costs.
As such, he is encouraging his clients to make sure they shop around carefully for their health insurance and to repeat the process during each annual enrollment period to ensure they are only getting the best value for money with their coverage.
Advisors are also being encouraged to approach healthcare with their clients in the same way they would when it comes to buying a home or car. With people expected to live longer, it’s vital to factor health costs into the equation when considering their future.
Meanwhile, long term insurance for disabilities is seen as another area in which guidance may be needed. According to Venita Zavidny, an advisor at Kanaly Trust, it’s vital to plan well in advance for the possibility of being disabled as this is one of her clients’ biggest risks. She works closely with clients to ensure they are getting a suitable long-term disability plan as some can be misleading – for example, one that offers to cover 60 per cent of a client’s income looks good on paper, but in reality it may not factor in taxes and other considerations.