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An Rx for LGBTQ+ healthcare costs

LGBTQ+ individuals often face higher-than-average medical expenses. Use these tips to help you prepare.


By Patty Onderko


HEALTHCARE COSTS ARE A CRITICAL ELEMENT in everyone’s retirement plans—but they take on heightened importance for members of the LGBTQ+ community. “They come up in every conversation I have with new clients,” says Merrill Financial Advisor Mariam Adams, chair of the New York City chapter of Merrill’s LGBTQ+ National Team.


I wasn’t surprised to hear that. As LGBTQ+ individuals, my wife and I have had to shoulder additional healthcare costs for a number of years. In fact, according to an in-depth study conducted by Merrill, affluent LGBTQ+ individuals are one-third more likely to be concerned about paying for medical care than the general affluent population.1 For good reason: According to the Kaiser Family Foundation, the LGBTQ+ community is more likely to experience depression and other chronic health conditions and can face discrimination in certain healthcare settings as well as limits to what health insurance will cover.2 The costs of healthcare, particularly when it comes to family planning, gender reassignment surgeries and long-term care, are top of mind for many of us.


With proper planning and forethought, however, medical expenses can be managed without compromising your other important financial goals, says Adams. Here’s why LGBTQ+ people need to plan differently and what strategies can help.

Affluent LGBTQ+ individuals are one-third more likely to be concerned about paying for medical care than the general affluent population.1


How to look at long-term care

Long-term care expenses can be especially problematic for LGBTQ+ individuals because they are less likely to have family to rely on, says Clint Eddy, a Merrill wealth strategist. A recent study found that only 16% of same-sex couples are raising children, compared with 40% of male/female couples.3 And childless LGBTQ+ couples, as well as singles, are generally on their own for care as they age. “Without family support, you need to plan workarounds—and that can be expensive,” Eddy says. “But I find that my LGBTQ+ clients are forced to examine their futures sooner and more thoroughly than their non-LGBTQ+ peers. That can help them be more prepared financially.” 


There are steps you can take to help ensure that long-term care will be there if you need it. Eddy suggests you start by making sure you select a trusted friend or family member to hold your power of attorney for both health and financial decisions. And talk to your advisor about insurance policies designed to address the issue of care—options include long-term care insurance, which will cover some of the costs either in your home or in a nursing facility, or permanent life insurance with a long-term care rider. Either way, Eddy suggests doing some research and asking friends and allies for help identifying long-term care facilities that respect LGBTQ+ elders, so that you’re not under time pressure to make a selection.


That sort of advance planning worked for a 70-year-old gay man, a client of Merrill Financial Advisor William J. Moran. “When he came to me for help planning his retirement, we talked not only about achieving his immediate goals—moving south to help his elderly mother and living comfortably on his pension—but about the ‘what-ifs’ of aging,” Moran says. A few years later, the man was injured in a fall and required daily rehab. Because of the preparation he had made with Moran’s help, he was able to make the transition to a welcoming assisted living facility of his own choosing, where he now lives independently.



Hed: LGBTQ+ Healthcare Costs—By the Numbers  Average monthly cost of a nursing home stay: $8,000   Average monthly cost of a part-time home health aide: $4,000  Source: Genworth  Average out-of-pocket cost for fertility treatments: In vitro fertilization: $24,400 - $38,000 Source: Kaiser Family Foundation, 2020  Average cost of common gender-affirming procedures: Female-to-male: $5,400 to $7,800  Male-to-female: $8,000 to $9,000   Female-to-male procedures include Adam’s apple augmentation, chin augmentation, chest masculinization; male-to-female procedures include brow and hairline advance, rhinoplasty and chest augmentation.  Source: The Philadelphia Center for Transgender Surgery

A financial strategy for family planning

Sixty-three percent of LGBTQ+ individuals under age 35 say they want to expand their families, either by becoming parents for the first time or by having more children, according to a study by the Family Equality Council.8 That frequently involves assisted reproductive technology (ART), surrogacy and/or adoption—all pricey undertakings. A single round of in vitro fertilization (IVF), for example, can cost $25,000 or more, depending on where you live. While many insurers offer coverage—in fact, it’s mandatory in 17 states—many cap the amount covered or limit the number of IVF cycles allowed. Surrogacy costs run even higher, often more than $125,000. 


While it’s illegal for insurance companies to discriminate against people for their sexual orientation, loopholes exist for family planning that can create additional costs for LGBTQ+ couples. When my wife and I began trying to start a family, we had insurance coverage for the ART we needed so that I could become pregnant with a donor. However, before we could qualify for reimbursement, our insurance required us to provide “proof of infertility” by showing that we had tried, on our own, to get pregnant for a full year. We never quite understood how they thought two cisgender women in a monogamous relationship could “try” to conceive a child without ART. But our now-14-year-old twin boys are worth every penny of our quite expensive out-of-pocket healthcare costs.


Working with an advisor to plan ahead for these costs, as well as the added expenses of starting a family, can make all the difference. Adams recalls helping a gay couple who wanted an outdoor space for a child they planned to adopt. “We budgeted for the cost of the adoption and then, though they lived in a nice New York building with a doorman, we helped them finance the purchase of a Brooklyn brownstone, complete with a large yard for their child.” 


“I find that my LGBTQ+ clients are forced to examine their futures sooner and more thoroughly than their non-LGBTQ+ peers. That can help them be more prepared financially.”

—Merrill wealth strategist Clint Eddy

Securing transgender health and wellness

Even less frequently covered by insurance is gender-affirming care, which can include psychological counseling, hormone therapy and multiple surgeries. Insurers consider many of the necessary procedures cosmetic and decline to cover them. The costs, which can easily exceed $100,000, are often borne by the transitioning individuals’ parents.


One of Adams’ clients is currently “considering how soon they can get gender-affirmation surgery,” she says. “When they started factoring in non-covered procedures, like facial feminization surgery and time off for the procedures, the price really started to add up.” They were able to cash in some maturing stock options, says Adams, adding, “between that and saved vacation days, plus a strong support network at work, they will be in a good financial position to move forward a year from now, because we planned for it.”


Ways you can save for potential medical needs

LGBTQ+ individuals do have one very real advantage in planning for healthcare costs: They’re generally more aware of the potential financial challenges, which can give them an incentive to save aggressively early on, says Moran. Working with a financial advisor, you can incorporate future healthcare costs into your long-term priorities, along with other important goals such as purchasing a home or retiring.


To help save for and manage costs, Adams suggests considering a health savings account (HSA); in combination with a high-deductible health plan, it allows you to save pretax dollars to pay for qualified medical expenses not covered by insurance. She also encourages those over 50 to take advantage of the catch-up provision allowing them to contribute even more to their 401(k)s or IRAs. Saving more for retirement helps to ensure that you’ll be able to afford the healthcare you need as you grow older.


“Making the most of the coverage you have is a big part of working towards realizing all of your dreams,” says Adams. Advocating for improved coverage can also help. Adams suggests to her LGBTQ+ clients who are changing jobs that they negotiate additional benefits and coverage for procedures such as gender-affirming surgery or IVF. As companies increasingly value inclusivity in the workforce, they may be more open to offering expanded coverage—and that could benefit everyone.


Patty Onderko has covered health, family, psychology and LGBTQ+ topics for national publications including Parenting, Success, and many more. She lives with her wife and sons in Brooklyn, New York.

1“Diverse Viewpoints: Exploring Wealth in the LGBTQ+ Community,” Merrill and Ipsos, 2019


2“Health and Access to Care and Coverage for Lesbian, Gay, Bisexual, and Transgender Individuals in the U.S.,” Kaiser Family Foundation, 2018


3 The Williams Institute, UCLA School of Law, “How Many Same-Sex Couples in the U.S. are Raising Children?” July 2018


4 Genworth, 2020


5 Genworth, 2020


6 Kaiser Family Foundation, 2020


7 The Philadelphia Center for Transgender Surgery


8 Family Equality LGBTQ Family Building Survey, 2019  


Long-term care insurance coverage contains benefits, exclusions, limitations, eligibility requirements and specific terms and conditions under which the insurance coverage may be continued in force or discontinued. Not all insurance policies and types of coverage may be available in your state.


This material should be regarded as general information on health-care considerations and is not intended to provide specific health-care advice. If you have questions regarding your particular situation, please contact your legal or tax advisor.


Merrill, its affiliates, and financial advisors do not provide legal, tax, accounting or benefits consulting advice. You should consult your legal and/or tax advisors before making any financial decisions.


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