Retirees Are Confused About Medicare. Here’s How Financial Advisors Can Help

Financial advisors can help retirees shape well-rounded financial plans, but many seniors are not taking advantage of this benefit. A 2022 survey of seniors found that 33% of those who are enrolled or preparing to enroll have a financial advisor, but only 2% use their advisor to help select a plan. ¹ Understanding Medicare can help financial advisors guide clients through plan considerations, account for health care expenses and protect retirement savings. Let’s take a look at how advisors can help Medicare-eligible clients.

SmartAsset’s Advisor Marketing Platform offers financial advisors services like client lead generation, automated marketing and more. Learn about SmartAsset AMP today.

Decoding Medicare Confusion Among Seniors

Research shows a gap between what seniors believe they know about Medicare and what they actually know. A 2026 eHealth survey of 1,000 Americans found that 89% of Medicare beneficiaries are confident that they understand their coverage options. However, the report demonstrates a significant Medicare literacy deficit.

Specifically, 88% of Medicare beneficiaries are unaware that there is no annual cap on out-of-pocket costs under Original Medicare. Similarly, ​82% of Americans nearing eligibility age for Medicare are unaware of the 20% coinsurance required for covered medical services. Only 13% of Medicare beneficiaries could distinguish between four Medicare options: Original Medicare, Medicare Advantage, Medicare Supplement and Medicare Part D.

Additionally, 88% of adults ages 55 to 64 are unaware that a 10% penalty may be added to their Medicare Part B premium for every 12-month period they were eligible to enroll but failed to do so.

Meanwhile, nearly four in 10 adults believe that Medicare will cover their long-term care needs, according to ACLI’s September 2025 Financial Resilience Index. That finding is notable because Medicare only covers short-term stays in skilled nursing facilities after release from a hospital. However, it does not cover traditional long-term care services like long-term stays in nursing homes or in-home care.

Client Acquisition Simplified: For RIAs

• Ideal for RIAs looking to scale.
• Validated referrals to help build your pipeline efficiently.
• Save time + optimize your close rate with high-touch, pre-built campaigns.

CFP®, CEO

Joe Anderson

Pure Financial Advisors

We have seen a remarkable return on investment and comparatively low client acquisition costs even as we’ve multiplied our spend over the years.

Pure Financial Advisors reports $1B in new AUM from SmartAsset investor referrals.

Target New Clients This Year

I am a registered fiduciary*

Book Your Free DemoNot sure? Learn more about AMP.

Long-Term Care: The Biggest Medicare Misunderstanding

Misunderstanding Medicare could be costly for clients, and advisors who recognize critical risks are better equipped to help mitigate them. This risk assessment can be eye-opening, as research suggests that clients and advisors are not always worried about the same things when weighing future healthcare needs.

Consider these findings from a 2025 study conducted by the Center for Retirement Research at Boston College. ² The table below shows the percentage of clients and advisors who are concerned about various retirement risks.

Advisors prioritize medical costs above all other concerns, with nearly 60% of advisors believing that their clients will eventually need long-term care. That’s significant since Medicare does not cover nursing care. Medicaid does, but the catch is that eligibility hinges on financial need. Seniors who find themselves needing long-term care may be required to spend down their assets to qualify.

The survey assessed potential outcomes for seniors who fail to plan for Medicare coverage gaps. A cumulative 15% of households with more than $100,000 in investable assets would likely end up relying on Medicaid, leading to an asset spend-down. Forty-two percent would need to drain home equity to cover long-term care needs, while 24% are likely to move in with an adult child should nursing care become necessary.

With the cost of a semi-private room in a nursing home clocking in at $114,975, ³ Medicare planning is an opportunity to demonstrate real value to clients by finding solutions to minimize out-of-pocket costs, both for covered and non-covered care.

How Financial Advisors Can Counsel Medicare Clients

Given that advisors often work with retirees and soon-to-be retirees, understanding Medicare is essential to their practice. This is a topic that advisors should be familiar with. Here are five common ways advisors can be a reliable Medicare resource for their clients:

Review Medicare Basics

Advisors should read up on different plans and costs presented by Medicare. They may also ask questions about the health care resources their clients are using and their impact on clients’ financial situations. Keeping up to date with the latest Medicare changes and enrollment period dates is also important.

Ask the Right Questions

Understanding a client’s medical costs, needs and concerns early in a relationship can help an advisor offer a holistic plan that takes those projected expenses into account. Being a trusted resource on questions related to health care expenses and Medicare plan selection can strengthen your advising services.

Share Your Medicare Knowledge

Financial advisors can organize regular information sessions or workshops focusing on Medicare. These seminars can cover key topics like enrollment periods, coverage options, plan changes and tips for managing out-of-pocket expenses. Hosting these events not only educates clients but also positions the advisor as a knowledgeable resource on Medicare, adding value to the advisory services provided.

Become a Go-To Resource for Answers

Creating and distributing detailed guides, checklists and FAQs about Medicare can be extremely helpful. Advisors can offer these resources on their websites or as part of their regular client communications. These materials should help clients understand complex Medicare details at their own pace and serve as a reference when they need to make informed health care decisions.

Establish Centers of Influence

Financial advisors may choose to work with a trusted local Medicare advisor who can help clients navigate and access the market. Some larger firms may have in-house Medicare experts. But those who don’t may look to develop and maintain strong relationships with these external agents.

Frequently Asked Questions (FAQs)

Bottom Line

Financial advisors shouldn’t overlook Medicare when providing advisory services to clients. Having sufficient and appropriate health insurance can protect clients’ nest eggs from high health care expenses. Financial advisors should educate themselves and work with reliable, trusted Medicare brokers when needed.

Tips for Growing Your Financial Advisory Business

• Let us be your organic growth partner. SmartAsset AMP (Advisor Marketing Platform) is a holistic marketing service financial advisors can use for client lead generation and automated marketing. Sign up for a free demo to explore how SmartAsset AMP can help you expand your practice’s marketing operation. Get started today.
• Expand your radius. SmartAsset’s recent survey shows that location is still a key preference. Many clients prefer to meet in person, but others favor remote relationships with advisors. Here’s where demand for financial advisors is strongest.

Photo credit: ©iStock/designer491, ©iStock/DNY59, ©iStock/AndreyPopov