3 key LGBTQ+ healthcare concerns — and ways to prepare
Use these tips to plan ahead for the potential costs of family planning, long-term care and gender-affirming care
HEALTHCARE COSTS ARE A CRITICAL ELEMENT in everyone’s financial strategy — but they take on heightened importance for members of the LGBTQ+ community. “Healthcare comes up in nearly every conversation with a new client,” says Merrill Financial Advisor Mariam Adams, chair of the New York City chapter of Merrill’s LGBTQ+ National Team. 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 In fact, research has found that men in same-sex couples spend more on healthcare than those in different-sex couples do, and women often have more difficulty handling the costs.2
In the Merrill survey, the costs of three areas in particular — family planning, long-term care and gender-affirming healthcare — are top of mind for many LGBTQ+ clients. With proper planning, however, medical expenses can be managed without compromising your other important financial goals, says Adams. Here are some strategies that could help.
How to prepare for long-term care
Long-term care expenses can be problematic for LGBTQ+ individuals because they are less likely to have children to rely on, and family members are the backbone of the U.S. long-term care system, providing an average of 18 hours a week of unpaid care, AARP has found.3 According to the U.S. Census Bureau, only 18% of married same-sex couples are raising children, compared with 38% of married heterosexual couples.4 Without family support, you may need to plan expensive workarounds.
Affluent LGBTQ+ individuals are one-third more likely to be concerned about paying for medical care than the general affluent population.1
There are steps you can take to help ensure that long-term care will be there if you need it. Start by selecting a trusted friend or family member to hold your medical power of attorney for healthcare decisions and durable power of attorney for financial matters. And talk to your advisor about insurance options, including 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. Also, ask friends and allies for help identifying long-term care facilities that respect LGBTQ+ elders.
That sort of planning worked for an LGBTQ+ client of Merrill Wealth Advisor William J. Moran. “When he came to me for help planning his retirement, we talked not only about achieving his immediate goals but about the ‘what-ifs’ of aging,” Moran says. A few years later, the man, in his 70s, was injured in a fall. 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.
A financial strategy for family planning
For LGBTQ+ individuals, becoming a parent frequently involves assisted reproductive technology (ART), surrogacy 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 — it’s mandatory in 14 states and the District of Columbia — many impose limits. Surrogacy costs can run even higher, often more than $125,000.
While it’s illegal for insurance companies to discriminate based on sexual orientation, loopholes exist for family planning, creating additional costs for LGBTQ+ couples.
That’s a sentiment shared by Toni Peterson, market executive for Merrill’s Nevada market and a member of Bank of America’s LGBTQ+ Executive Leadership Council. Peterson and her partner have already gone through a combined four rounds of IVF — once for Peterson, three times for her partner. Each round cost $25,000 to $30,000 — and none led to a pregnancy. “We keep saying that if we end up with a baby at the end of it, we won’t even think about the fact that we’ve spent something like $200,000 doing this stuff,” Peterson says.
“Check whether your health insurance policy covers IVF or other ART procedures,” suggests Adams. “Then you can begin to figure out how much you should set aside for family planning.”
In addition to making the most of the benefits you have, 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 IVF. Companies that value inclusivity in the workforce, may be more open to the idea — and that could benefit everyone.
Changing jobs? Consider negotiating additional benefits and coverage for procedures such as gender-affirming surgery or IVF.
Securing transgender health and wellness
Gender-affirming healthcare can include psychological counseling, hormone therapy and surgeries, and the total cost can easily exceed $100,000. Frequently, gender-affirming care is not covered by insurance; some insurers consider many of the necessary procedures to be elective. In a survey by the Center for LGBTQ Economic Advancement & Research (CLEAR) and the Movement Advancement Project (MAP), 25% of those who had received gender-affirming care reported spending $20,000 or more out of pocket; another 33% spent $10,000 or more.9
State laws limiting gender-affirming care could change the landscape even more. According to a recent analysis by the Williams Institute at the UCLA School of Law, nearly 114,000 transgender youth live in states that ban gender-affirming medical care and another 123,600 live in states with bans pending.10
One of Adams’ clients was “considering how soon they can get gender-affirming 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 were in a good financial position to move forward, because we planned for it.”
Ways you can save for potential medical needs
“The LGBTQ+ individuals I work with 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.
To help save for and manage costs, Adams suggests considering a health savings account; in combination with a high-deductible health plan, it allows you to save pre-tax dollars to pay for qualified medical expenses not covered by insurance. She also encourages those age 50 and over to take advantage of the catch-up provisions allowing them to contribute more to their 401(k)s or IRAs. Doing so helps to ensure you’ll be able to afford the healthcare you need as you grow older.
Affording the healthcare you and your family need comes down to comprehensive planning, including creating a stronger safety net for long-term care needs, understanding the benefits you do have and saving as much as possible to cover the gaps. And by working with a financial advisor, you can incorporate future healthcare costs into your long-term priorities, along with other important goals.
A private wealth advisor can help you get started.
1 Merrill and Ipsos, “Diverse Viewpoints: Exploring Wealth in the LGBTQ+ Community,” 2022.
2 K. Gavulic and G. Gonzales, Medical Care Research and Review, “Health Care Expenditures and Financial Burden: A Comparison of Adults in Same-Sex Couples and Different-Sex Couples,” April 2022.
3 AARP, “New AARP Report Finds Family Caregivers Provide $600 Billion in Unpaid Care Across the U.S.,” March 2023.
4 U.S. Census Bureau, “Characteristics of Same-Sex Couple Households: 2005-Present,” 2023.
5 Genworth, “Cost of Care Survey 2023,” December 2023.
6 Genworth, “Cost of Care Survey 2023,” December 2023; part time assumes 20 hours per week.
7 B. Peipert, et al., Reproductive Biology and Endocrinology, “Impact of in vitro fertilization state mandates for third party insurance coverage,” and Forbes Health, “How Much Does IVF Cost?” August 2023.
8 The Journal of Law, Medicine & Ethics, “Utilization and Costs of Gender-Affirming Care in a Commercially Insured Transgender Population,” Fall 2022.
9 Center for LGBTQ Economic Advancement & Research and the Movement Advancement Project, “The LGBTQI+ Economic and Financial (LEAF) Survey: Understanding the Financial Lives of LGBTQI+ People in the United States,” March 2023.
10 Williams Institute, UCLA School of Law, “The Impact of 2024 Anti-Transgender Legislation on Youth,” April 2024.
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.
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 or imply that Merrill Financial Advisors can now or in the future provide specific health care advice. Questions regarding health care situations should be directed to health care, legal or tax professionals.