1. 1 Planning for Health Care in Retirement 1

2. 2 NFM-10373AO.8 (01/14) Important things to keep in mind Not a deposit Not FDIC or NCUSIF insured Not guaranteed by the institution Not insured by any federal government agency May lose value The data presented in this presentation are hypothetical and may not be used to project or predict actual performance. The income benefit base is calculated based on no withdrawals and does not include any fees assessed. Your clients’ experience may be different and investment results may be higher or lower, depending on the options chosen, fees and expenses. Does not include any up-market performance. These results are not reflective of any gains in the market and are assuming guaranteed interest amounts provided by the products used as examples in the case studies. Nationwide, Nationwide Financial, Nationwide Institute, and the Nationwide framemark are service marks of Nationwide Mutual Insurance Company. © 2013 Nationwide Financial Services, Inc. All rights reserved.

3. 3 NFM-10373AO.8 (01/14) Agenda The Health Care Dilemma Understanding Health Care Creating a Plan to Address Health Care Costs

4. 4 NFM-10373AO.8 (01/14) The Health Care Dilemma

5. 5 NFM-10373AO.8 (01/14) The Health Care Dilemma Managing the cost of health care is one of the most complex issues facing society Likely among your greatest expenses in retirement Ranks as a top concern of retirees Fidelity Investments Estimates Couples retiring in 2010 Will Need $250,000 to Pay Medical Expenses In Retirement.” Study conducted by Infogroup/ORC from March 4 th – 14 th 2010 and includes 376 respondents. Fronstin, Paul. "Savings Needed to Fund Health Insurance and Health Care Expenses in Retirement: Findings from a Simulation Model | EBRI." Employee Benefit Research Institute | EBRI. May 2008.

6. 6 NFM-10373AO.8 (01/14) The Health Care Dilemma LIMRA® "Yearly Premiums For Family Health Coverage Rise To $12,680 In 2008, Up 5 Percent As Many Workers Also Face Higher Deductibles - Kaiser Family Foundation." The Henry J. Kaiser Family Foundation - Health Policy, Media Resources, Public Health Education & South Africa - Kaiser Family Foundation. 8 Sept. 2008. Web. http://www.kff.org/newsroom/ehbs092408.cfm

7. 7 NFM-10373AO.8 (01/14) The Health Care Dilemma 79% have underestimated, or don’t know their medical costs Nationwide Survey “Health Care Costs in Retirement.” Consumer study of 625 respondents, January 2012. 8% 13% 25% 12% 16% 26% $10,000: $6,000 to $9,999: $3,000 to $5,999: $1,500 to $2,999: $0 to $1,499: Don’t Know: Consumer Estimate of Annual Health Care Costs in Retirement

8. 8 NFM-10373AO.8 (01/14) But what about Medicare? It covers only about 62% 11 True False 11 "How Much Does Medicare Cover?" EBRI Fast Facts. #251. Oct. 17, 2013. 12 Medicare and You 2014. Medicare.gov. Medicare will cover most/all of my expenses Medicare will cover my long-term care if I need it It does not cover long-term care 12

9. 9 NFM-10373AO.8 (01/14) Understanding Health Care 9

10. 10 NFM-10373AO.8 (01/14) Health care expenses Premiums for Medicare, Part B & D Medicare cost-sharing provisions 10 Understanding Health Care Out-of-pocket prescription drug expenses 8 Savings Needed for Medigap Premiums, Medicare Part B Premiums, Medicare Part D Premiums and Out- of-Pocket Drug Expenses for Retirement at Age 65 in 2013. Assuming a 90% chance of having enough savings. Source: Amount of Savings Needed for Health Expenses for People Eligible for Medicare: More Rare Good News, by Paul Fronstin, Ph.D., Dallas Salisbury, and Jack VanDerhei, Ph.D., EBRI. October 2013. $255,000 – $360,000: Out-of-pocket health care expense estimate for a 65-year-old couple 8 $255,000 – $360,000: Out-of-pocket health care expense estimate for a 65-year-old couple 8

11. 11 NFM-10373AO.8 (01/14) 11 Understanding Health Care Option 2 Medicare Advantage (Part C) 1. Hospitalization, 2. Medical 3. Rx (MA-PD) OR Option 1 Rx Coverage Part D or GHI Original Medicare Part A and Part B Secondary Insurance GHI, MedSup + +

12. 12 NFM-10373AO.8 (01/14) Inpatient Hospitalization Skilled Nursing Facilities Home Health Care Hospice 11 Medicare.gov. Medicare 2013 & 2014 costs at a glance. http://1.usa.gov/190ejwx. Patient costs for an in-hospital stay Days 1 - 60$1,216 deductible Days 61 - 90$304 per day copay Days 91 - 150$608 per day copay Days 150+All costs Option 1 – Medicare Part A: Hospital Insurance 11 12 Understanding Health Care

13. 13 NFM-10373AO.8 (01/14) Doctors/Providers Preventive Benefits Durable Medical Equipment Outpatient Services Individual Pays Monthly premium (based on MAGI) $147 deductible 20% coinsurance on doctors’ services and outpatient care Option 1 – Medicare Part B: Medical Insurance 12 13 Understanding Health Care 12 Medicare.gov. Medicare 2013 & 2014 costs at a glance. http://1.usa.gov/190ejwx.

14. 14 NFM-10373AO.8 (01/14) If Your Yearly Income in 2012 was:You Pay Filed Individual Tax ReturnFiled Joint Tax Return $85,000 or less$170,000 or less$104.90 $85,000 - $107,000$170,000 - $214,000$146.90 $107,000 - $160,000$214,000 - $320,000$209.80 $160,000 - $214,000$320,000 - $428,000$272.70 above $214,000above $428,000$335.70 Option 1 – Medicare Part B: Monthly Premiums 13 14 Understanding Health Care 13 Medicare.gov. Medicare 2013 & 2014 costs at a glance. http://1.usa.gov/190ejwx.

15. 15 NFM-10373AO.8 (01/14) $310 Deductible Beneficiary pays 100% or $310 75% Medicare benefit (initial coverage) Beneficiary pays $635 (25% or flat co-pay amounts based on formulary) 100% No Medicare coverage in doughnut hole Beneficiary pays 100% or $3,605 47.5% of the cost for brand name medications 72.0% of the cost of generic medications 95% Medicare benefit (catastrophic coverage) Beneficiary pays 5% (min. co–pay) $2.55 generic or $6.35 brand The doughnut hole is large and expensive $2,850 in total drug costs $4,550 out-of-pocket reached $6,765 in total drug costs ** Premiums vary by insurer You pay Medicare pays Option 1 – Medicare Part D: Prescription Drug Coverage (2014) 15 Understanding Health Care Source: Medicare and You, 2014. Medicare.gov

16. 16 NFM-10373AO.8 (01/14) Pay only after Original Medicare (Parts A & B) Flexibility to see any doctor who accepts Medicare Open Enrollment - 6 months beginning with Part B effective date at age 65 or older Does not cover prescriptions Option 1 – Medigap: Medicare supplemental insurance 16 Understanding Health Care

17. 17 NFM-10373AO.8 (01/14) Medicare Part A MonthlyAnnual Medicare Part B Medicare Part D Medigap Plan C Total Per Person Per Couple $0 $104.90 $1,258.80 14 $39.90 $478.80 15 $ 185.00 $ 2,220.00 16 14 Medicare.gov. Medicare 2013 & 2014 costs at a glance. http://1.usa.gov/190ejwx. 15 Kaiser Family Foundation. "Medicare Part D: A First Look at Plan Offerings in 2014." October 10, 2013. Weighted average premium for Medicare Part D Stand-Alone Prescription Drug Plans". 16 Medicare.gov. Median cost for Medigap Policy C in Columbus, Ohio. Ranges from $117 to $253. $3,957.60 $7,915.20 $329.80 $659.60 Cost of Medicare Premiums: 17 Understanding Health Care

18. 18 NFM-10373AO.8 (01/14) 18 Understanding Health Care Medicare –www.Medicare.gov –1-800-MEDICARE –www.MyMedicare.gov Eldercare.org State Health Insurance Programs (SHIP) Benefitscheckup.org Social Security Administration −www.SocialSecurity.gov −1-800-772-1213 Leverage these health care planning resources

19. 19 NFM-10373AO.8 (01/14) Creating a plan to address Health Care costs 19

20. 20 NFM-10373AO.8 (01/14) Helping clients create a plan The majority of pre-retirees have underestimated the cost of health care in retirement Help your clients eliminate the guesswork with a personalized health care cost assessment from Nationwide Financial ® Americans underestimate retirement health care costs

21. 21 NFM-10373AO.8 (01/14) The Nationwide Financial Health Care Cost Assessment –Powered by calculations from one of the world’s leading actuarial firms –Provides a personalized estimate of possible annual health care expenses –Includes estimates for Medicare, out-of-pocket and long-term care expenses Start with a Health Care Cost Assessment Determine individual health care costs

22. 22 NFM-10373AO.8 (01/14) 22 Health Care Cost Assessment

23. 23 NFM-10373AO.8 (01/14) 23 Health Care Cost Assessment

24. 24 NFM-10373AO.8 (01/14) 24 Health Care Cost Assessment

25. 25 NFM-10373AO.8 (01/14) 25 Health Care Cost Assessment

26. 26 NFM-10373AO.8 (01/14) Health Care Cost Assessment Fact Finder 26

27. 27 NFM-10373AO.8 (01/14) 27 For more information please contact: Mark Knudson Personal Retirement Consultant Work: 208-342-8657 Ext. 2Fax: 208-345-7120 knudsm1@nationwide.com