Rising costs, changing delivery systems and an acute lack of in-state specialists combine to make health care a universal financial, quality-of-life and personal concern in Nevada.
The Private Bank by Nevada State Bank released the 11th of its “High Net Worth Report” series, with this month’s analysis focusing on the health care challenges and perspectives of Nevadans with a high net worth. While consumers at all income levels face uncertain impacts resulting from the continuing rollout of the Patient Protection and Affordable Care Act (the “ACA,” or “Obamacare”), wealthier Nevadans are expected to experience some unique affects.
Highlights from the report include the following:
- The most noticeable impact of the ACA on higher-income earners may be the additional 0.9 percent in payroll taxes for those making $200,000 or more. Also, beginning in 2018, “Cadillac” plans with large premium costs (for example, those exceeding $10,200 for individuals) will be subject to a 40 percent excise tax on the value of the health insurance benefits exceeding the thresholds. On a positive note, self-employed people with a high net worth may find competitively priced health insurance options on the newly created health care exchanges once they are fully functioning.
- More affluent Nevadans approaching retirement may also be concerned about the impact of the ACA on Medicare, where increased incentives may be offered for “efficient” care. For those entering their golden years, it is worth considering that the probability of eventually being disabled in at least two activities of daily life or being cognitively impaired is 68 percent for those reaching age 65. With the cost per day for a private room in a nursing home averaging $248 and the average stay lasting 835 days, people with a high net worth can expect to spend upwards of $200,000 on such care during their later years.
- Notably, 64 percent of investors with a high net worth cited health care cost as the biggest threat to their retirement in a recent survey by Spectrem, beating out taxes and inflation. A separate study from Nationwide gauged the expectations of Americans with a high net worth regarding annual out-of-pocket health care costs during retirement, finding that those already in retirement expected to pay $4,084 per year and those preparing to retire expected to pay $5,621. In reality, expected out-of-pocket expenses for Americans retiring today and living for 20 years are expected to be around $10,750 per year.
“Nevada reports only 66 medical specialists per 100,000 residents, compared with the national average of 97. The shortage in specialists commonly requires some residents to leave the state in order to receive care, particularly for complex procedures,” said Russell Price, executive vice president of The Private Bank by Nevada State Bank. “Unfortunately, this often results in a dual negative effect of higher costs for patients and a loss of income that otherwise would have stayed in our local economies. Many high-end households may be underestimating the out-of-pocket expenses they will incur during retirement. When it comes to financial planning for health care needs, being well-informed and starting the process early are key.”
The Private Bank publishes the “High Net Worth Report” monthly. Briefings are available on Nevada State Bank’s website at www.nsbank.com/HNWreport or by contacting The Private Bank directly at 702.855.4812.
About The Private Bank by Nevada State Bank
The Private Bank by Nevada State Bank provides a full range of personalized financial servicesfor high net worth and high-income clients, including deposit and lending services and wealth management planning. The Private Bank by Nevada State Bank is an unincorporated division of Nevada State Bank that provides specialized banking services to significant net-worth clients. Nevada State Bank is a full-service retail bank that has been chartered by the state of Nevada and is insured by the FDIC.
About Nevada State Bank (@nevadastatebank)
Nevada State Bank, with assets of more than $4.0 billion, is the largest state-chartered bank in Nevada. A full-service bank with 50 branches statewide, Nevada State Bank offers complete range of consumer, private and business banking services. It is a subsidiary of Salt Lake City-based Zions Bancorporation (Nasdaq: ZION), one of the nation’s premier financial services companies. With affiliates in 10 Western and Southwestern states, 140-year-old Zions Bancorporation has assets of $54.9 billion. For more information on Nevada State Bank, call 702.383.0009 or access www.nsbank.com.