Wealthy investors have a number of personal and national concerns, and a new one that has cropped up is increased health care insurance costs.
Among affluent investors with a net worth between $5 million and $25 million, 37 percent expect their health care premiums, deductibles or out of pocket expenses to increase from last year to this year. These Ultra High Net Worth investors expect the greatest rise to occur in premiums.
Spectrem’s latest wealth segmentation study, Financial Attitudes and Concerns, looks at these UHNW and their health care cost concerns as the Affordable Care Act reaches its fifth year of existence.
There was a difference in anticipated increases in health care costs depending on whether the affluent investor had Medicare or did not have Medicare. Among those without Medicare, 61 percent expected higher premiums by an increase of 10 percent or more. Another 24 percent expected increases of 5 to 10 percent.
Among investors with Medicare, 39 percent expect increases of 10 percent or more in premium costs and 38 percent expected 5 to 10 percent more in paying health care premiums.
The percentages are lower but similar in terms of out-of-pocket expenses and deductible amounts. Among those without Medicare, 68 percent expect an increase in out-of-pocket expenses, including 53 percent who think it will be an increase of at least 10 percent. Among those with Medicare, 42 percent expect to see an increase, including 26 percent expecting a jump of 10 percent or more.
From an occupational standpoint, 77 percent of managers expect to see large increases in premiums, while only 36 percent of senior corporate executives have the same expectation.
The largest percentage (47 percent) of UHNW investors have Medicare with supplementary coverage, probably because the large percentage of UHNW investors who have already retired. One-third have private insurance provided through an employer, and 12 percent have an individual plan purchased directly from an insurance company.
Meanwhile, 11 percent of UHNW investors say they expect to change health care providers in the next year, while 9 percent plan to drop out of group coverage with their employer over the same period.
To learn more about the UHNW, click here