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Organizing Your Finances After a Chronic Illness

Chronic illness is life-changing. When it comes to medical expense coverage, you might be looking at new regulations on the kinds of treatments available to you, the physicians you meet with, and the hospitals that are covered.

Unfortunately, the older you get, the more likely a chronic illness becomes. The statistics are staggering: 90 percent of seniors suffer from at least one chronic illness, and 77 percent suffer from two or more.

These steps can help you develop a solid financial plan against chronic illness:

  1. Put together a team.

The right team will help you make wise decisions. Your team might be more extensive, but the basic members everyone should have are: a power of attorney (likely a family member or friend); a care manager; a financial advisor; an insurance consultant; an estate planner; and an accountant.

  1. Get organized.

Keep documents of everything: from medical records — lab reports, surgery reports — to bills. The medical records will ensure you and any doctors remain informed, and the bills should be kept at least three years for tax purposes.

  1. Know how you will pay for your illness.

The first step to this is to be knowledgeable: Know your deductibles and co-pays. Be prepared for extra costs.

Once you’ve figured that out, evaluate how much you can afford without affecting your quality of life. As much as you can help it, don’t let chronic illness alter your retirement.

Start with cash as it’s tax free. Then move to certificates of deposit and bonds –these earn less than your stocks and mutual funds. Try to avoid cashing out anything with higher returns as the tax hit could be substantial.

  1. Be proactive about your bills.

Ignoring the bills won’t make them go away, it will only exacerbate the problem.

But too many times, people receive a substantial bill and then a couple frustrating calls later —believe me, you will get frustrated — they ignore the bill altogether. If you ignore your bills, you run the risk of spiraling into unmanageable debt, not to mention the constant harassment of bill collectors.

Instead of ignoring your bills, keep up with the phone calls. Ask a trusted family member or friend for help with them if they’re too overwhelming. Work with your hospital to get on some kind of payment plan. This is where that team of friends and financial professionals can come in handy.

  1. Be proactive about your health.

There’s no way around it: A diagnosis of a chronic illness means your life has changed, perhaps radically. But that doesn’t mean you should give up.

Bad habits — eating unhealthy foods, smoking, not exercising — can have a huge financial impact in health care costs. By taking care of yourself, you can decrease future health care costs and better afford your current medical expenses.

  1. Go in for checkups regularly.

Nobody likes going to the doctor’s office. Most of us put off doctor’s appointments so religiously that we only find ourselves in a hospital when we are so incapacitated that we have no other option.

This isn’t a healthy attitude.

By scheduling regular checkups with a physician, potentially deadly health issues — like cancer — can be spotted early on when they are easier to treat. From a financial standpoint — in the same way you should be proactive about your health — this can save you money in the long run.

  1. Take advantage of what’s available in your community.

Many organizations offer medical treatments like flu shots, pneumonia vaccines, and cancer screenings for little to no cost. By taking advantage of these, you can prevent more costly medical expenses from cropping up on top of ones you’re already facing.

Chronic illness can be a disheartening and isolating experience. It’s important to have a good team and a solid plan in place.

Advisors are available at McLean with the expertise to be a part of that team. Contact McLean Asset Management today.