Chronic illness diagnosis can be scary, discouraging – and expensive. Here’s what you need to know.
According to the CDC, nearly 50% of all American adults have been diagnosed with a chronic condition such as heart disease, stroke, cancer, type II diabetes, arthritis, and others. Some of these, like arthritis, are so common that they are viewed as a “normal” part of aging. Others, like Alzheimer’s or cancer, can be terrifying and unexpected.
After the immediate questions related to prognosis and treatment have been addressed, most people find themselves worrying about the financial consequences of the diagnosis. Can they afford the treatment, the physical therapy, and the specialized nursing assistance? How can they protect their family from having to sort through a financial mess?
Here is your action plan.
First, understand the facts
Begin by getting a good handle on the facts of the diagnosis. Speak with your physician and get a second opinion if necessary. Your goal is to understand the prognosis, the possible range of outcomes, the treatment plan, etc. Even if the facts are difficult to face, you will need them to plan.
Next, speak with a financial planner
Work with a financial planner and an attorney to set the groundwork for the support that you and your family will need going forward. Depending on your circumstances, that may include instituting a Power of Attorney, re-working your financial plan, getting an insurance assessment, etc.
When looking at the finances, be sure to include the possibility of needing to make alterations to your home, move to a different home, or transition to an assisted living facility. Review liability insurance for your car and home to ensure that they provide adequate coverage in the event of an accident.
This is also a good time to think about the financial management of your household. Who will manage your bank accounts and pay the bills? If your prognosis makes it likely that you will need assistance for an extended period of time, consider drafting a compensation clause for the person who will be managing your money.
Advance directives deserve a separate mention here. Think about who will make medical decisions if you become unable to do those for yourself. What are your preferences when it comes to life support and end-of-life care? Getting those preferences clearly defined will save your loved ones from having to guess at your wishes.
Document as much as you can
This is good advice for anyone, but especially so for those who are facing a chronic illness diagnosis. Document and automate as much as possible. Create a binder or a document repository for all important documents, and make sure that your family knows where to find it. Automate bill payments for home and health insurance policies so that they don’t lapse should you be in a hospital and unable to write a check. Consolidate your bank accounts. In short, simplify as much as you can.
Consider your living situation
If an assisted living facility is likely to be needed in the future, consider doing your research and touring the facilities while you still can contribute to the decision. Research costs of care to understand your options. This calculator from Genworth is a good place to start for estimating facility and care costs.
Review your Medicare coverage
If you are on Medicare, review the prescription drug plan you are on (Medicare Part D). You can change to a more advantageous plan during the next open enrollment period to save money on prescriptions. Enrollment period runs from October 15 to December 7 each year, so be sure to understand your current choices and take action on time to save money.
Managing the finances of chronic illness
After the initial reaction to a chronic disease diagnosis has worn off, it’s critical to get all the facts and lean on your professional team to help you plan for whatever’s next. From reviewing insurance coverage to re-working your financial plan, know that there are things you can do to soften the financial impact and take care of yourself and your family.
Image credit: https://www.igliving.com/magazine/articles/IGL_2015-08_AR_Financial-Planning-for-Patients-with-Chronic-Illness.pdf