Benefits Tool Can Forecast Medicare Expenses

For many reasons, says Elliot N. Dinkin, president and chief executive of Cowden Associates, Inc., companies want to cut back substantially or eliminate the medical benefits they offer current and future retirees. But, he tells PLANADVISER, “We found out from clients that individuals within 10 years of retirement didn’t have any understanding of the structure and cost of post-employment medical costs.”

The costs are complex and confusing, and most people are at sea when it comes to understanding Medicare Advantage, means testing on Medicare Part B premiums (which cover in-patient services, the bulk of health care expenses).

To help plan sponsors assist their employees nearing retirement or in retirement, Cowden Associates created ComprehensiveCast, a service to assist employers with guiding current retirees and future retirees (current employees who will retire in the near term) through the complicated world of retiree medical and Social Security optimization strategies. 

The Retirement ComprehensiveCast portrays customized estimated “all-in” retiree medical costs, an overview of benefit plan options available and Social Security optimization strategies, in a holistic approach to assist in achieving financial stability in retirement. 

Demographic information (age, gender, health, income range and state of residence in retirement) is used to create a personalized expense report, which includes medical expense projections. “What if” scenarios are developed based on longevity projections,  allowing employees to see the cost differences in the options they have selected, such as health insurance cost calculations, including premiums and out-of-pocket costs; Medicare Parts A, B and D; Medigap or Medicare Advantage.

Cowden believes that a health care cost savings strategy should be a foundational component of retirement planning. The company’s methodology initiates conversations that ultimately lead to retirement income optimization. 

The initial cost includes a seminar and set number of reports; and goes up based on the number of participants in the plan. 

More information about Cowden, an independent actuarial, compensation and employee benefits consulting firm in Pittsburgh, is at its website.