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Healthcare can get very expensive, very quickly – even for the very wealthy.
Many high-net-worth families have wealth managers who handle their finances and lawyers who handle their legal affairs, but few have health advisors who work in conjunction with their other advisors to plan, manage, and support family members' health. At first glance, health and wealth may seem unrelated, but they often become intertwined.
When a medical crisis threatens your health, it puts your wealth at risk, jeopardizing financial succession planning. Expert financial advisors understand the connection between health and wealth. Some financial advisors collaborate with a health advisor to protect their clients’ wellbeing, while others connect clients directly with a trusted health advisor.
Doing the math on healthcare costs
Planning with a health advisor’s guidance prevents unanticipated healthcare costs from draining your wealth. How fast can the costs of care add up? Let’s look at a few examples:
A rare illness
When someone is diagnosed with a rare illness, an adequate health insurance plan may not cover cutting-edge experimental treatments or extremely expensive medications. If a wealthy patient needs to take a medication that costs $45,000 a month for the rest of their life, their financial situation may make them ineligible for a discount program.
An extended illness
A patient with COVID spent seven months in rehab. When their insurance stopped covering treatment, the out-of-pocket cost was $64,000 a month.
Inpatient treatment for substance abuse or mental health services
Most of these programs are not covered by insurance, and treatment can cost $50,000-$75,000 a month. Treatment typically starts with a 5-10 day detox, which can cost $1,000 a day. If the individual is young, and spends decades going in and out of these programs, it can create a financial burden for even a high-net-worth family.
Long-term care
Many family office clients are accustomed to a certain lifestyle and expect to receive the best available care – but the costs of nursing homes and other long-term care programs are higher than many people realize.
If a 65-year-old patient with Alzheimer’s moves to an assisted-living facility and lives there for 20 years at a price of $20,000 a month, that stay will cost nearly five million. A patient who instead chooses to have private duty nursing at home at a price of $125 an hour will be paying $3,000 a day, or one million a year.
An illness while traveling
If someone in your family experiences a health crisis or faces a serious diagnosis while traveling, arranging for their immediate care can be both complex and costly.
What a health advisor does
- Create a health and wealth plan for your family;
- Ensure that family members have appropriate health insurance based on their individual needs;
- Negotiate the cost of treatments that are not covered by insurance;
- Manage insurance appeals and denials; and
- Create alternative treatment plans that are more cost-effective while still providing great quality care.
If you and your family are in good health, it may be tempting to put off preparing for a health crisis. But it’s worth considering how your family’s healthcare needs will change over time. Putting a plan in place now will help you maintain your health and your wealth in the future.
This article is the fifth in a series for Advisor Perspectives. John Samuels is founder and CEO of Better Health Advisors, an independent healthcare advisory practice based out of New York City. John served as a senior healthcare leader in New York City’s top hospitals for over 20 years. He uses his extensive healthcare experience and wide network of medical professionals to achieve the best possible care for clients nationwide. To learn more about what Better Health Advisors can do for you, your family, or your company, visit our website, email [email protected], or call (646) 883-9717.
Read more articles by John Samuels
Advisor Perspectives welcomes guest contributions. The views presented here do not necessarily represent those of Advisor Perspectives.
