section 1 - The American College Online Learning Center

e. The specifics of how these plans operate are beyond the scope of this section ofthe course and will be covered later in the curriculum.5. Recommend that the client have advanced directives.a. Many health care costs are associated with end of life medical issues.b. Client’s can gain a measure of control over these costs by having advanceddirectives such as a durable power of attorney for health care and/or a living will.c. A living will is filled out by the competent client before end of life care is needed. Itis completed by the client to tell the physician what steps to take should the clientbe come terminally ill and unable to speak for his or her needs. It is limited inbreadth and flexibility.d. A durable power of attorney for health care requires a third party (e.g., spouse orchild) to make health care decisions when the terminally ill client cannot speak forthemselves. This can cover a broad spectrum of matters and can enable the thirdparty to decide if palliative care or aggressive medical care is warranted.e. An advanced directive addresses health care expense risk by putting somedegree of control with the client or her representative.6. Select effective health care coverage including the most appropriate Medicare, Medigap,and retiree health care policies.a. Medicare allows for many choices, which can address the frailty risks and healthcare expense risks of a client. In addition Medicare Supplemental policies alsoprovide a variety of health care options.b. Tailoring the most effective Medicare and/or Medicare Supplement plan will becrucial to keeping uninsured health care costs down and providing services forfrailty.c. It is beyond the scope of this section to analyze the labyrinth of choices available(done in another course). However, this strategy is vital to meeting the risksassociated with the aging process.d. Planning Point: Planners must also consider the coordination of Medicare withany retiree health benefits that the client has.7. Recommend health savings accounts (HSAs).a. Health savings accounts give working clients with so-called high deductible healthplans the ability to establish an account that has significant tax advantages.(1) Contributions to the account are tax deductible and distributions from theaccount are tax-free.(2) In 2012, the contribution limit is $3,100 for a single individual, and $6,250for a family. There is also a $1,000 catch up contribution for clients whoare 55 and older.b. The money saved in an HSA can be used to pay for qualified medical expenses,long-term care premiums, and Medicare premiums and deductibles.c. Example: If your 55-year-old client David contributed $4,000 a year until he turned65 to the HSA and earned just 2 percent on his money, he would have $48,300 atage 65 to use for Medicare premiums, long-term care premiums, or other medicalexpenses. If David earned 5 percent, he would have $55,100 that could bedistributed tax free for his medical needs.d. There are a wide variety of HSA investments from which the client can choose.e. The fund is established during the working years but can be used in retirementto pay for the expenses associated with long-term care insurance premiums,frailty risk, and health care expense risk.5.19