5 Tips To Face the Financial Burden of Illness
Illnesses, particularly critical illnesses, such as cancer, stroke, or heat attack can be very nerve-racking for both the person diagnosed and their family. These events are not only emotionally draining and stressful, but also quite expensive to manage. Treatments, medications, and therapies designed to control and manage the symptoms of these diseases are often too costly for the average person to comfortably afford.
Plus, these critical illnesses can leave someone temporarily or permanently disabled, impairing their ability to care for themselves or even work. When such a scenario happens, the emergency costs required for care and recovery coincide with the temporary or permanent loss of income, sometimes leaving one to drown in an unforeseen sea of financial burden.
However, there are a few approaches you can use to try and navigate this challenge.
5 Tips To Face the Financial Burden of Illness
Have an Emergency Fund
This step is one of the most imperative in avoiding the financial burden of huge medical bills from an unexpected and costly illness. It is often said that an ounce of prevention is worth a pound of cure. By setting aside some funds every month that are enough to cover your health insurance deductible and out of pocket max (or even just day-to-day expenses should you be unable to work), you'll have more overall options when it comes to your finances in the event of a costly medical emergency.
Consider Opening a HSA (Health Savings Account)
If your insurance plan qualifies, you can consider opening an HSA (Health Savings Account), which enables you to contribute pre-tax money to the account. These contributions grow tax-free and are readily available to you when the need for qualified healthcare expenditure arises. Just keep in mind that an HSA be used only if you have a High Deductible Health Plan (whether or not your plan qualifies is determined by the IRS)1. Unlike a flex spending account, HSA funds will roll over year to year if you don't spend them, and may even earn interest. Typically your health insurance provider will offer a HSA option. If your provider doesn't, you can open a separate HSA account at most financial institutions.
You decide how much to contribute to your HSA account each year, though you cannot exceed government-mandated maximums. For 2019, the limit is $3,500 for an individual and $7,000 for a family (adults over 55 can add up to $1,000 more)2. If you have an HSA through your employer, you can set up easy automatic contributions directly from payroll. You will then receive a debit card that you can use for allowable expenses. This includes co-pays, deductibles, coinsurance, and other qualified medical expenses not covered by your plan.
Negotiate a Payment Plan With Your Hospital or Doctor
If you know that paying your medical bills is going to be a hardship, it is paramount that you consider asking your hospital or doctor about a hardship payment plan. Although negotiating a payment plan may not always be ideal, it can help you get the chance to pay affordable payments that prevent your life from coming to a screeching halt. In addition, making regular payments will help prevent a blemish on your credit score.
If you can, it's always a good idea to visit your hospital's medical billing department in person to try and negotiate a payment plan or lower monthly bills. You might be surprised at what you can work out.
Apply For Charity Care
Unknown to many people, many hospitals and healthcare providers offer charities every year in the form of canceled or lowered medical bills for persons who meet some certain income requirements. If your illness has left you unable to work, you may qualify and these programs may be able to help. They can also significantly reduce your owed medical bill amount, making your monthly or weekly payments more affordable. Again, visiting with the billing department in person is a great way to learn about these programs and sort out whether or not you qualify, and how to apply.
Ask For a Cash Discount
You may also negotiate your medical bills by paying in cash at some hospitals, labs, and medical facilities. If you have some money to kick in towards your bills but it’s not enough, it doesn't hurt to ask for a cash discount. You may end up with a 5-15% discount on the total bill for prompt payment or cash payment in full.
The financial burden of illness can be traumatizing and stressful, but proactively saving in advance and communicating clearly if you do run into trouble can drastically help you weather through the challenge.
1Healthcare.gov
2IRS.gov
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