Wealth Is No Buffer to Health Care Costs Concerns

According to the release, “affording health care costs for my family” was rated the number one financial concern for 38% of survey respondents.

“What’s unfortunate is that many successful people spend a lifetime working to build their wealth, sometimes working so hard that they jeopardize their own health. Then they spend a majority of their wealth to restore their health,” said Thomas Melcher, managing director and chief investment officer of PNC’s wealth management unit for ultra high net worth clients, in a news release.

Other key findings of the survey included:

• Future of Medicare: 42% of respondents perceive the potential insolvency of the Medicare system as a threat or huge threat to their family’s wealth. 49% of those between the ages of 45-64 think its demise would be a threat or huge threat to their family’s wealth. Among those with children, 51% agree their children will not benefit from Medicare in the future.
• Long-term care costs and medical treatment also posed a risk for 36% of those questioned, with 26% of younger Americans, ages 18-44, with children under 18 expressing fear that their children would eventually have to pay for their long-term health care costs. Close to one-quarter (24%) of those with living parents worried about their parents’ lack of long-term care insurance.
• The top five financial concerns of those surveyed were: “providing for my health and wellness” (52%), “sustaining and increasing my wealth” (47%), “providing for my family’s security” (41%), “having enough money to support my lifestyle” (41%), and “affording health care costs for my family” (38%).

In spite of their financial concerns, the survey found that many wealthy Americans are not taking steps to protect their assets. Sixty-nine percent of respondents said they do not have a comprehensive financial plan.

As far as health care in their financial planning, 39% of survey respondents have no health care proxy, which establishes treatment desires for when the individual is unable to express them, and 69% have not purchased long-term care insurance for themselves or a spouse. Reasons for not purchasing the insurance included feeling it was unwise to spend money on a premium for something they would never use (36%), the insurance is cost-prohibitive (22%), and they never thought about it (21%).

The survey was conducted online by Harris Interactive in October and November 2005 among a nationwide cross section of 1,485 adults (age 18 or over) with annual incomes of $150,000 or above (if employed), at least $500,000 of investable assets (if employed) or at least $1 million of investable assets (if retired).