Wealthy Americans — with financial cushions ranging from significant to substantial — worry that rising health care costs will eat through their assets, with a majority of them citing providing for their health care as their top financial concern, a new study said.
One-third of the almost 1,500 wealthy Americans surveyed in a study commissioned by PNC Financial Services Group said that they were concerned that health care costs would consume a major portion of their financial assets. That concern is greatest among those between the ages of 45 and 64, with 43 percent of them noting that fear.
The future of the Medicare program, the government health care program for the elderly, weighed heavily on respondents' minds. Forty-two percent perceive the potential insolvency of the system as a threat or a huge threat to their family's wealth. About half of those between the ages of 45 and 64 think its demise would be a threat to their family's wealth. More than half of those surveyed who have children believed their offspring wouldn't benefit from Medicare.
Bruce Bickle, a managing director at PNC Advisors, said he was surprised by how the individuals surveyed were both afraid of having to take on their parents health care costs while also worrying they would be a burden to their own children.
One-quarter of the respondents worried about their parents lack of long-term care insurance. Yet 28 percent of those surveyed from the ages of 18 to 44 feared that their children would be saddled with their care.
Bickle said he was surprised that people that age would even be thinking about their health care costs.
"I thought they would be more concerned with making money," Bickle said.
Yet for all their concerns few in the survey are preparing for future health care problems, with only 31 percent having bought long-term care insurance. Of those who hadn't purchased such insurance, 36 percent said it didn't make sense to buy something they might never use while 22 percent said it was cost prohibitive.
Almost forty percent don't have a health care proxy, which is a person who can make decisions for someone should they become incapacitated.
Those surveyed had annual incomes of $150,000 or more with investable assets of $500,000. Such assets would include a home, bonds and stocks. The retired respondents had at least $1 million in investable assets. Nearly 200 of those surveyed had assets of over $5 million, with 116 of them having assets of $10 million or more.
PNC is a diversified financial companies providing services such as consumer and corporate banking, real estate financing and asset management.