Building Healthcare Into Your Financial Planning

Christine Simone
Christine Simone

Hear from Caribou Wealth Cofounder Christine Simone.

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Podcast Transcript

February 23, 2023
Note: This transcript was computer generated and might contain errors. 

Christine Simone:  My name is Christine. I'm one of the founders of Caribou and we are a healthcare planning company. It's not a very common word and you might not know what health care planning is, but we'll talk a lot about that today and you know, financial advisors use our software to be able to predict and optimize their clients healthcare costs. So, I'll leave it at that because I'm sure we'll get in some more of it later on.

Katie Wilkinson: Yeah, I think that kind of leads into two questions. You guys do you know, help financial advisors do comprehensive financial planning and part of that is healthcare planning Can you just tell us a bit more about like what is comprehensive financial planning and what is healthcare planning? And how do the two fit together?

Comprehensive financial planning and healthcare planning: how do the two fit together?

Christine Simone: Sure, I'm happy to so the financial services industry has evolved a ton over the last few years and most recently, because of the commoditization of investment management. Meaning, it's basically on autopilot there are robo advisors that can help you. You know, pick investments financial advisors have become a lot more holistic or comprehensive. Meaning, they're trying to support their clients in other areas of their financial lives outside of just investment management because they have tools to support investment management. Gives them more time. More leeway to look at other areas of clients Finances. These areas might include college planning, tax planning, estate planning,

Christine Simone:  And we're basically creating this vertical for what we're calling healthcare planning. It is one of the highest expenses in retirement, It typically is in Spot, 2 or spot three depending on how you look at it. And it's pretty inevitable that, you know, you will transition to Medicare, or you will retire, and no longer have employer benefits. If there's a 70% chance that you might need long-term care, there's a more than 50% chance that you might be in this sandwich. Generation caring for you know we'll get into this mom or dad as well as kids. So there's clear out-of-pocket costs associated with health care and what we're doing is we're helping

Christine Simone:  Consumers through a financial advisor plan for these costs, understand what these costs are. You know, there's no crystal ball but having, you know, baseline idea or a general understanding of what these costs might be. And then looking at them year over year, we call that optimizing your healthcare costs as your needs change. As your budget changes. As just your life stage changes, is what our software is used for.

Katie Wilkinson: Yeah, that's awesome. I think you sort of touched on some things we'll get into, you started to talk about this a little bit but you know, lots of caregivers take on Or contribute to financial planning for the people that they're caring for in some instances. You know, this is entirely on their realm, and in some instances, they're just helping and weighing in. But can you talk a little bit about some of the factors that make health care costs, one of the biggest concerns for Americans. And then also, you know, how can people in their caregivers Plan for these risks or factors as they prepare for their future.

How caregivers can plan for rising healthcare costs

Christine Simone:  Yeah.Well like I mentioned there's no crystal ball, right? So you can't really predict anything you could. Look at all sorts of statistics and really scare yourself of What are the chances that I develop, You know, this health condition or What are the chances that I'll need long-term care? You could figure that out, but I think the most important piece is just to know that these are possibilities and what kind of the rough estimates are in. Kind of all of these areas there are factors, like, rising drug costs. There's factors like, You know, health care costs, rising faster than inflation. I think this is what is causing a lot of fear and concern around healthcare costs. And then what almost multiplies that is that a lot of consumers, actually, don't understand health insurance. They don't understand how to navigate the healthcare system. It's actually very complex and confusing, which is completely understandable. If you don't work in it every day, like I do, or like you, do you know, it's just not calm and knowledge of how to pick a health insurance plan, or

Christine Simone:  How to negotiate a medical bill with your insurance company and a lot of people actually are just overspending on their health care because they're not looking at ways to optimize their costs annually. They might have a strategy like Pick a plan and then never look at it again for years and years, even though their health needs has changed have changed or they have a new prescription drug. Let's say when I got a new doctor, they didn't check if they're in or out of network. Some people don't have, you know, that intuition to go and do that because it's just not common practice for them or common knowledge or where they spend, you know, 12 hours of their day. Like like Uri might. So there are certainly, you know, more economical factors like rising healthcare costs or like inflation and and how that affects healthcare costs or like rising drug costs and you know new law and legislation might cap that or it might help you know it might grow you're in year and that will all flex but I think mostly it's kind of the fear around it and


Christine Simone:  Lack of just common knowledge around the healthcare system that really leads to the fact that we spend a lot on healthcare annually.

Katie Wilkinson: Yeah, and I think you just said a lot of words that like are scary to people or don't make it like don't even make sense. It's like I don't even know to be scared of that because I don't know what that means, you know, like like to the average person that's that's not you. It's spending 12 hours a day, you know, in the weeds in this.

Christine Simone:  Yeah.

Katie Wilkinson: I guess you know, Where does someone start, How does someone start including healthcare planning in their financial planning and yeah like what's what's step one and when should step one be

How to start healthcare planning

Christine Simone: Yeah, I think it's it's really hard to say this because I know it takes a lot from somebody, but I think the education factor is really step. One just getting a general understanding of, you know, What are my insurance benefits? What do I have access to? What is my? And I'm gonna go into some terms that maybe some of the listeners might not understand and I am happy to explain them. But what is my out-of-pocket maximum which is technically you know the most you could spend on health care in a given year. It's the amount at which your plan caps, your costs, or what is my deductible, which is the amount I have to pay before. My plan even starts to pay anything and you can start to just get a better general understanding of what. Some of your out-of-pocket costs will be.

Christine Simone:  Um, that's specific to your health insurance plan. That's a little bit more predictable. You can kind of create that ceiling amount in your financial plan. You can kind of predict some of the services such as if you see your primary doctor. However, many times in a year, what's your co-payment, right? Or if you're getting a certain surgery, you can call your insurance company and ask them, You know what might this cost me up. So and so hospital, these are things that you can do to be more proactive. We talk a lot in our business about proactive planning because another you know really unfortunate thing about healthcare is a lot of people approach it for more of a reactive side where something's happened and then they're in a crisis mode. So some of these strategies can help you be a little bit more proactive around. Planning for the costs. Now. Things like long-term care or caregiving or

Christine Simone:  Even you know, people don't anticipate, you know, in an emergency or, you know needing to have an emergency service, right? Those are a little bit harder to predict, so it's harder to include those in the financial plan. So I think the only thing that you can really do is just annually have this exercise do this exercise because from one year to the next things do change and it might seem gradual as it's happening. But if you reflect, you know, at one point every year and open enrollment is a great time to do that, you can really see. Oh, my health needs have really changed and this is actually impacting how much I'm spending. And I'm just gonna sit back and really like, Analyze that for a second and understand what I actually might spend in the year coming up based on this, maybe, you know, slight historical pattern that I have so far.

Katie Wilkinson: That's helpful. And it makes a lot of sense to sort of be doing this yearly at open enrollment and You know, for many of us there might be patterns things, might not change a lot year over year, but can you talk a little bit about like the common life events that you might include in healthcare planning?

Christine Simone:  Yes, absolutely. So I would say in our line of business financial advisors support, or they really want to be involved in retirement, is a really big one for them. That's most of what, you know. They're they're getting clients as they're approaching their retirement milestone. The big question is, Am I going to run out of money before I die? Basically, and so planning for that retirement milestone is a huge stepping stone in You know the interactions that they have with their clients and a lot of people forget I won't have health insurance from my my company anymore from my employer anymore. So what am I gonna do? And the answer to that, depends on a lot of things. First and foremost, it depends on whether or not your Medicare eligible. If you're retiring 65 and above, you're going to transition onto Medicare.

Christine Simone:  Most of the time, there's always, there's always a caveat unless, you know, your spouse is actively still employed and you can be on their benefits. If you're under 65, you have a few more options available to you the marketplace. Also known as Obamacare, Affordable Care. Act, compliant plans, that's typically where people transition to depending, on where you live. You might have your own state marketplace that you might use to be able to buy that plan. And we're seeing more and more the rise of short-term health. Insurance plans and health sharing ministries as well as options. Those come with a completely different set of financial risks. And that's probably a whole podcast in and of itself, but so that people know in either of those circumstances, you have so many options hundreds of options to sort through and it's, it's overwhelming. But it's really important to approach, you know, that milestone with diligence.


Christine Simone:  Other life events include Medicare eligibility. Of course, moving. If you're moving states, you know, finding a new health plan or not even moving, states, moving counties. Even, you know, qualifies you to find new a new health plan. You might need to get new doctors, you know, see who's in and out of network of your health plan. marriage marriage or divorce or or getting widowed or all, you know, qualifying life events having a baby

Christine Simone:  Loss of Income Producing Property. I think we've coined out this point about 40 to 50 different life events or just you know, changes in income. Another big one dependence aging author parents policy at 26, You can no longer be on your parents' policy anymore. So we actually have an exhaustive list of life events on our that you can likely find somewhere on our website. If you, if you dig through it, those are maybe 10 or so of the most common ones that we see including, of course, having a new health condition or getting new prescription. Those don't qualify you to enroll in a new plan. You have to wait until the open enrollment season, but if that's happened to you, you definitely want to make sure you're activated during that open enrollment season and looking at new options.

Katie Wilkinson: Yeah, and I think you just prove me wrong. I was like you know we sort of stay the same year after you just named so many things that you know are not aged specific or conditions specific just life changes that affect our healthcare. And shifting gives a little bit How can people in general?

Christine Simone: Yeah. Yeah.

Katie Wilkinson: And I think you've talked about this a little bit, But how can people in general become more effective healthcare consumers.

How to become more effective healthcare consumers

Christine Simone:  You know, I think that there's a few ways. I'm trying to think back of, you know, my own initial knowledge of the healthcare system. Almost, sometimes you kind of have to live it to be like, I need to learn it. So you you in my case, you know, I had a, I've had two hip surgeries and I know it doesn't maybe look like I would be in a position where I've had two hip surgeries, but I really experienced something that made me feel like, I think I should know more about this. Hopefully that's not the case for everyone. Hopefully you don't have to live through something to have to say I should really learn more about this or be put in a situation where you know you need to kind of be more reactive. Hopefully people can be more proactive whether that's You know, actively talking to your parents about their health care. If you're

Christine Simone:  Foreshadowing, you know, maybe a situation where you're going to be a caregiver for your parents or you're going to need to care for anyone, your kids, even in future situations, you know, talk to your parents, talk to your aunt or uncle talk to people who are on Medicare again at my age. You know, I know most more about Medicare than most people on Medicare and that's pretty uncommon and hopefully that prepares me for when I eventually transition there. But also, it helps me, you know, help my friends parents or help my own parents or, you know, help my aunt and uncle or whomever. So I think that the more you just intentionally get involved and understand the situation specifically for people who are more elderly, you know, ask them, you know,

Christine Simone:  Have you written down? Who your doctors are? Do you want? Do you have a list of your medications somewhere? How often you refill your medications? I think that these sort of questions and understanding how people are interacting with the healthcare system are really important and that might be supplemented by things like newsletters. You know, there's a few that I subscribe to that, you know, we could include in the copy of this podcast going out to to listeners. For example, that just keep me up to date on certain news whether it's in like a law on legislation type of setting or whether it's just like a healthcare 101 type of newsletter, I think that those that exposure is really important for people and it just needs to be intentional. You need to, you know, want to learn it like like I think anything. And from from that hopefully you can be more comfortable if you are ever in a future position where you are a caregiver for somebody.

Katie Wilkinson: Yeah. I mean I'm sorry to hear about your hip surgeries. I am also have been let down by the healthcare system with an autoimmune disease and you know learned a lot and end work in health tech now. Because I, you know, got interested that way and it's and I guess that's unfortunate and hopefully that can change.

Katie Wilkinson:  Shifting gears a little bit to more about what you guys do. I think, sometimes people think of financial advisors by way of like wealth building or investment advice, you talk a little bit about why it's important to find a financial advisor that can advise on, all aspects of someone's life, including healthcare,


Why is it important to find a financial advisor that can advise on all aspects of your life?

Christine Simone: Yeah, well I think you know, point blank your investments isn't the only place where you're making or spend or losing money, right? Like you are every day, living your life or you're spending on housing, transportation health care. So many other things you're planning for your kids' college. You're doing your taxes annually. You know, you might have an estate that you're planning for, right? So there's just so many different areas of your financial life and it's great that software and technology has empowered and enabled a financial advisor to now deliver insights and guidance. And and you know, advice on these other areas and, you know, luckily financial advisors are, you know, open to that initially. There was I think a lot of resistance around that it took kind of the rise of Robo advisors to maybe.

Christine Simone:  Impose a little bit of a threat, almost right? And as humans, we can adapt, you know, a little bit more quickly and offer a different services and test these different things. And that's what that really leads to for financial advisors is it deepens the relationship with their client if they're involved in all of these areas of their financial life? They have such a stronger relationship with their client, they're able to support their client, you know, with, with any topic and and even if they can't, if their clients coming to them with those questions, they can say, You know, Let me find a resource for you or you know, Look, let's talk about this. Let's see if we can figure it out together. If not, you know, we'll figure it out and a financial advisor wants that they, they want to retain that client.

Christine Simone:  They want to, hopefully, you know, work with them, through the entirety of their life. And then, furthermore, they want to work with their kids. They want that to be passed down, so the kind of bring this back to caregiving. I think it's really important too for You know, any caregiver who's

Christine Simone:  Caring for Mom or Dad or you know somebody elderly get involved if they have you know if financial planner or a financial advisor you know ensure that those costs are being incorporated, get to know them. The financial advisor is going to want to keep those assets. They're going to want to hand it down to that client's kids and it whether that's you or It's not you I think it's important that don't just make a decision of pulling those assets away or keeping them without really assessing like Who that person is and what it's like to work with them or work with their firm. I think it's really important to get to know them, get to know what other options are out there too and really assess that. So, yeah, there's there's been lots of shifts happening in in the financial services space, which is really just great to see because we do spend money in in so many different ways. And, you know, health care, of course, being being one of them is just intertwined with caregiving.

Katie Wilkinson: Yeah, thanks. That's, um, that was very comprehensive and I think Our audience and I don't want to speak for everyone, but our audience caregivers and their care recipients often money is tight or they're on a fixed income.

Katie Wilkinson:  And this might just be a perception, so correct me if I'm wrong but you know, paying for a financial advisor might be out of reach in terms of cost. Do you have any like recommendations or suggestions on where someone can start on their own first?

Where to start financial planning if the cost of a financial advisor is out of reach

Christine Simone:  Yeah. So there's been a lot of shifts because of the shifts happening in the types of services offered. There's actually been a lot of shifts in the fee structure as well, which has been great to see. And I think at a high level financial planning is becoming more affordable, not necessarily financial like investment management, there's still typically like a percentage-based fee. That might be a more feasible model for some people. If they're, you know, not wanting to pay anything upfront for a service and just basically managing, you know, paying based on the amount of assets that they have managed that might be preferable, but now we're seeing more financial planning fees that are more fixed amounts. So you might pay

Christine Simone:  Two to three thousand dollar. You know, I've seen you know, as low as let's say, 2500 dollars a year for your financial plan and you don't necessarily have to revise it every year. Obviously, it's advised that you do because your circumstances might change, but that might be a more affordable price point that might scale up, depending on the complexity of the situation. So that's kind of option too and an option three even is They charge like consultants in some cases, right? So let's say you're in a situation and you really just want to figure that one situation out, maybe you can engage a financial professional for, you know, a couple hours worth of work, see what it's like to work with them, get to know them. I know that still, you know, money might be tight, but that might save you money in the long term. So investing in that engagement,

Christine Simone:  Is likely to say again, if they are really involved in all these other areas of your financial life and you've really vetted them in the long term. It can probably save you more money than you might spend if they're taking one of those more holistic approaches.


Christine Simone:  So if the good news is that hopefully over time it will even become more and more affordable. We've seen it kind of drop in price or have different fee structures that are more preferable to some people. But if you are really looking for like a do-it-yourself type of approach because of all these advancements in technology, there's lots of these platforms out there, too. You've probably heard of ones, like, like, Robinette or public. It's probably isn't news to you, but people don't have, they're like, retirement savings in those accounts. I think that, you know, on average, they might house somewhere between, like, a thousand to $2,000. It's mostly people who are like day trading, or just doing, you know, some, some investments ones that are a little bit more well-known for managing increased amount of its assets include companies like personal capital. For example, there are very retirement focused, so you might want to find a platform that has that specific kind of niche. They

Christine Simone:  Will be more tailored to kind of a more senior population. They might even have, you know, additional service offerings. You know our goal in the future is to work with platforms like that as well just like we're working with financial advisors. We want to be able to provide our tool, our technology to the mass population. You don't have to just work with a financial advisor. That's just kind of the stage at, which we're at right now with our company. So know that there are options Whether they're provided through Financial Advisor, a do-it-yourself type of platform or even you know, ask your bank banks. Now are becoming you know, even though they're large, massive financial institutions, they're becoming a lot more holistic too. Like who I bank with? They have some of these offerings as well and you know, they're looking to get into these areas just the same as these platforms or financial advisors are as well.

Katie Wilkinson: Yeah, I love that I think because there's so many there's so much tech now and different apps and ways to DIY it or find, you know? A company that doesn't really specific thing. I you just said that and I was like, Oh, right my bank. Like I forget that that's even an option.

Christine Simone: Right? You don't think about it but you're if you really go in there and look in the menu and look at all the things that they do, it's there,

Katie Wilkinson: Yeah, that makes that makes a kind of sense. I feel like Of course they would offer that I guess thinking You know I mentioned caregivers are often involved in financial planning and…

Christine Simone:  Yeah.

Katie Wilkinson: our healthcare planning for the person they're caring for. We like to ask just everyone, you know, do you have a number one tip for caregivers out there and added the preface Just, you know, to keep sort of our conversation in mind?

Christine's number one tip for family caregivers

Christine Simone: Yeah, well, I think, you know, relating it back to the first thing we spoke about. Like, the fear around the financial component of caregiving is probably one of the top things on the list. After caring for the person that, you know, you love and care about, you know, associated costs is probably like a close second or third somewhere somewhere up there. There's really nothing you can do to predict those costs. So I think that, you know, the best thing is just planning as much as you can for them understanding, what the costs are looking at resources that you can utilize to optimize those costs and just not letting it get in the way of your relationship with whoever, you know, you're caring for. There's likely a lot of discussion around, you know, who pays for what in these certain circumstances and that's definitely something difficult. So the

Christine Simone:  The more that you can plan for those scenarios even though you don't want to think about a situation where you are caring for somebody in advance. The more you can avoid kind of that discussion as everything else is happening, right? Because there's so much changing in those situations especially initially, but one given is that someone's gonna have to pay for it, right? And so no matter what level of caregiving it is, if it's at home, if it's Not at home, if it's 24-hour care, if it's just two hours a day, someone's gonna have to pay for it. So in some cases, Medicare might pay for it or or whatever health plan depending on the person's age. But there are always going to be out of pocket costs associated with that. So

Christine Simone:  Even though it's hard to think about, I guess bringing this all home, even though it's hard to think about, even though it's impossible to predict planning proactively for some for these sorts of circumstances is really critical to helping it go a little bit smoother. I guess. Not guarantee that it will be super smooth but just a little bit smoother.

Katie Wilkinson: Yeah, I love that my sister and I are you know having that exact conversation right now. Hopefully proactively and…

Christine Simone:  Okay.

Katie Wilkinson: even that feels hard because it feels like all these what ifs? But it definitely gives,…

Christine Simone:  Yeah.

Katie Wilkinson: like, peace of mind to to be thinking about this. Now, as opposed to like, in a crisis moment, or Whatever when things get tighter by any,…

Christine Simone: Exactly.

Katie Wilkinson: you know, whatever that means and Thank you so much for like sharing all of this.

Christine Simone:  Yes.

Katie Wilkinson: I'll take you up on linking some of the things that you mentioned in the notes here so people can have access to that if people I guess if financial advisors or anyone else who wants to find you online find caribou online, where can they find you?


Christine Simone:  But one of the interesting things is that people find us online because we develop a lot of content and then they take us to their financial advisor. So even if you whether you're listening and you have a financial advisor or you don't or if you're financial advisor yourself, like, Please, reach out. Maybe there's a resource that we can point you to, no matter what your circumstances we are, you know, very much wanting to just, you know, help people in this area because there aren't a lot of resources for it. Our website is Caribou, there are plenty of guides and you know tips and blogs and tricks and all sorts of stuff on there. No matter again, what your circumstances and you can find us on LinkedIn and Twitter as well under the exact same handle. So caribou

Katie Wilkinson: Awesome. We'll make sure to link that here and we appreciate, you know, you taking the time to be helpful to our caregiving audience. And we hope the same that this is useful to people that are figuring out, you know, how to save money or better manage their money while they Give care to someone, they care about.

Christine Simone: Great. Yeah. And thanks for everything that you guys do as well. It's a really important area to help people in and around their finances with caregiving and just make it again, smoother, smoother than it is, at least right now in the finances are a huge component of that.