Fear Of Rising Healthcare Costs In US Threatens Family Assets, Says PNC

Even more affluent Americans are concerned that health care and long term care costs will wipe out a major portion of their money, according to survey findings of nearly 1,500 US adults released by The PNC Financial Services Group, Inc.

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Even more affluent Americans are concerned that health care and long-term care costs will wipe out a major portion of their money, according to survey findings of nearly 1,500 US adults released by The PNC Financial Services Group, Inc.

According to the PNC survey, nearly 42% Americans with $1 million or more in invest able assets, including one quarter of those over age 65, said paying for their family’s health care is a top financial concern.

“Death has always been the great equalizer, but that adage can now be updated. Spiralling health care costs are equally indiscriminate. Regardless of income or assets, these costs can devastate anyone,” said Thomas Melcher, managing director of PNC’s wealth management. “That risk places affordable health care as the top financial concern for many families-even our nations wealthiest.”

The findings released by PNC are part of a series of reports resulting from a nationwide survey of nearly 1,500 wealthy US adults, which found that Four in 10 respondents perceive the potential insolvency of the Medicare system as a threat or huge threat to their family’s wealth. About half of those between the ages of 45-64 think its demise would be a threat or huge threat to their family’s wealth.

Long-term health care and medical treatment costs also posed a risk for almost 36%, with one-quarter 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 of those with living parents worried about their parents’ lack of long-term care insurance.

PNC’s survey also found that asset protection preparations lag even in wealthy households, as more than two-thirds (69%) of respondents do not have a comprehensive financial plan. Three out of four have completed a will, but four in 10 have no health care proxy, which specifies medical treatment if one is incapacitated.

Seven out of 10 (69%) have not purchased long-term care insurance for themselves or a spouse. Among those who have not purchased long-term care insurance, thirty-six percent felt it was unwise to spend money on a premium they may never use, 22% said it was cost-prohibitive and 21% said they never thought about it.

“The cost of health care is rising much faster than inflation, and the effect on family assets should be factored prominently into retirement planning and wealth preservation activities for all Americans,” Melcher said. “Without proper financial planning, many people end up leaving a bankrupt legacy to the next generation.”

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