Wealthy Women Still Need Long Term Health Care

As the baby boomers get older, the spector of failing health hovers over them like a vulture waiting.  And like all things, the rising costs that accompany health care could add to the increasing complexity of retirement.  How bad is the situation?  Well according to a according to a study published by the journal of Health Affairs, illness and medical bills caused half of the 1,458,000 bankruptcies in 2001.  Every 30 seconds in the United States someone files for bankruptcy in the aftermath of a serious health problem.

Surprisingly, most of those bankrupted by illness had health insurance. More than three-quarters were insured at the start of the bankrupting illness. However, 38 percent had lost coverage at least temporarily by the time they filed for bankruptcy.

Most of the medical bankruptcy filers were middle class; 56 percent owned a home and the same number had attended college. In many cases, illness forced breadwinners to take time off from work — losing income and job-based health insurance precisely when families needed it most.

The research, carried out jointly by researchers at Harvard Law School and Harvard Medical School, is the first in-depth study of medical causes of bankruptcy. With the cooperation of bankruptcy judges in five Federal districts (in California, Illinois, Pennsylvania, Tennessee and Texas) they administered questionnaires to bankruptcy filers and reviewed their court records.

Dr. David Himmelstein, the lead author of the study and an Associate Professor of Medicine at Harvard commented: “Unless you’re Bill Gates you’re just one serious illness away from bankruptcy. Most of the medically bankrupt were average Americans who happened to get sick.” Read that quote again…”Unless you’re Bill Gates you’re just one serious illness away from bankruptcy.”  Hopefully you’re at full attention now. 

According to the U.S. Health Care Administration costs are increasing at 5.8% per year and could triple in the next 20 years.  At those rates, by the time you or your spouse need long term care, you may have to shell out between $500,000 and $1,000,000! As a women, imagine what that would do to your retirement if you spent a million dollars to take care of your ailing husband (remember, statistics show you’ll outlive him by at least 8 years) Now what happens if YOU end up needing some type of long term care?  Will you have yet ANOTHER million dollars to spend on you needed medical treatments and proper care? 

Now let’s add yet another layer to this.  What happens if you are responsible for your parents?  Can you afford to take care of their long term needs?  What about your spouses parents.  There currently are people who have been forced to take care of two sets of ailing parents and can’t even begin to think of their long term needs and retirement.

Don’t be fooled into thinking that your long term care needs are decades away.  Working age Americans; those 18 through 64, account for a full 39% of those who need care.  This means that one could need some long term care well before their investments have had time to mature and grow.

What ever you do, thinking about your health and long term care are an integral part of your long term financial future.

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