Are you ready for a major medical crisis? Here’s how a crisis can affect you financially

My mother contracted pancreatic cancer when she was only 55 years old. Fortunately, eight years later, she’s still playing pickleball – good luck if you get stuck on a court with her.

Contributor – MarketBeat

Here’s why we consider ourselves so lucky that she’s always with us: Pancreatic cancer patients have a five-year survival rate of 10%, according to the Pancreatic Cancer Action Network. It’s one of the deadliest cancers, and IMHO, it’s not getting enough attention in this heavily pink ribbon month.

So what if you are diagnosed with an unthinkable and terrible disease? Would you have done all the right things?

A total of 41% of working-age Americans have problems with medical bills or have medical debts, a figure up from 34% in 2005, according to the Commonwealth Fund. Adding the seven million older adults who also deal with these issues places a total of 79 million Americans in the medical debt category.

The good news is that you can prepare for the unthinkable, no matter how difficult it may seem. Check out the tips below.

Tip 1: Start planning now.

You don’t want to wait for a terrible diagnosis or an emergency to get your money’s worth, because by then it might be too late.

Learn about the nuances of your health plan and determine if it will still meet your needs if you encounter a health situation. Consider the nature of the plan, whether it is a high deductible health plan, a health maintenance organization (HMO), a preferred supplier organization (PPO), or another type of health plan.

What would you have to pay for a deductible before your insurance company covers the remaining costs?

Find out in advance what your health insurance plan covers. Take cancer, for example. Some health insurance coverages do not cover unproven or experimental cancer therapies, herbal medications, long-term care, private nursing, over-the-counter medications, and more.

Tip 2: Consider additional coverage.

Explore the idea of ​​purchasing additional coverage for a specific covered benefit. Note that you will be spending more money on these types of coverages beyond your regular insurance premium. Check out these examples:

  • Insurance against heart attacks or strokes: If you are suffering from a heart attack or stroke, this type of insurance offers a cash benefit that you can use to spend however you want.
  • Flat-rate cancer insurance: You can use this flat-rate cash benefit if you are diagnosed with cancer. It can help pay for medical bills and daily expenses.
  • Cancer treatment insurance: You can get cash benefits for cancer treatments and other covered events throughout your illness.

Extended health insurance policies can help you cover certain costs for deductibles and co-payments, off-grid costs, travel and accommodation for you and / or your caregivers, child care, loss salary and other items that your health insurance does not cover. t cover.

Tip 3: Total your sources of income.

Imagine the unthinkable happened today. (I know, it’s no fun to imagine, but it’s a good exercise to help you determine your readiness.)

Short-term disability insurance policies replace part of your salary during the first few weeks of illness. Long-term policies, on the other hand, can replace your income for several years.

You may not keep your job if you end up with a long-term illness. What if you have to resign or be fired? (After FMLA leave expires, your employer is not obligated to continue in your position for you and may fire you if you cannot work.)

You are eligible for Social Security Disability Insurance (SSDI), which provides monthly payments as long as you have worked for a specific period, paid Social Security taxes, and have been labeled “disabled” by Social Security. . After two years, you can become eligible for Medicare. Find out if you qualify for Supplemental Security Income (SSI) or monthly disability payments with low income and asset levels.

What other sources of income do you have? Maybe your spouse can help support you during this time. Maybe you want to consider accessing your 401 (k) or other retirement fund. Or maybe you’ll end up plundering the emergency fund you’ve built up for years.

Either way, consider the implications of all – especially if you decide to access your 401 (k) or retirement funds. You might regret it later.

Tip 4: Review your investments.

Let’s say you have bad news today. How would you manage your investments? First of all, you wouldn’t want to jump to conclusions about what will happen later. If you have a heart attack, you could be like new in six months. You don’t want to use up all your nest egg for a short-lived event. Keep your savings and investments intact for the long term.

If you were diagnosed with cancer, you would use up your short-term savings: CDs, money market accounts, or cash if you needed them right away. Review your investments for diversification and have provisions built in if the unthinkable happens.

Tip 5: Visit your lawyer’s office.

It’s a very, very, very good idea to get your Lasting Power of Attorney, Health Care Power of Attorney, and Living Will in place now. You want to get rid of those nasty legal documents while you’re in good health so that you don’t have to face financial implications later. You don’t want your financial assets stuck in probate because you didn’t write a will.

Also, while you are in good health, buy life insurance. Life insurance benefits can help your family pay taxes and bills in the event of death, replacement income, a mortgage, children’s or grandchildren’s education costs, and more. Be sure to weigh the pros and cons of term and whole life insurance before making your choice.

Take care of your finances now rather than later

When you find yourself in the throes of a health crisis, you want to take care of yourself and your family, without worrying about money. Increase your savings, pay off debt, and lower interest rates now, just in case. Prepare for the unthinkable now, whether or not it happens.

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