Bringing Health Care Issues into Financial Planning

Many people plan their finances as if they’ll never be sick a day in their lives. Yet the cost of a serious illness is all it takes to devastate most U.S. households financially.

Thus, it’s essential that financial planning take a worst-case scenario view of not only what can happen to your finances if you’re sick, but also ways to deal with the financial exposure if you lose your job and your health insurance. A financial planner is trained to discuss key financial preparations you need to make in order to handle any kind of personal or family health crisis.

But there are steps you can take by yourself to control your risk.

Take off the weight: While dealing first with the numbers on your bathroom scale will have immediate health benefits, it will also make your health insurance options and potential out-of-pocket costs more affordable over time. A recent Stanford University and Rand Corporation study reported that lifetime medical costs related to diabetes, heart disease, high cholesterol, hypertension and stroke among the obese are $10,000 higher than among the non-obese. It added that lifetime medical costs could be reduced by $2,200 to $5,300 following a 10 percent reduction in body weight.

Grill your agent or HR person: Whether you buy health insurance through an agent or your employer, insist that they explain exactly what you’re getting for your premium, and where deductibles do and don’t apply. If you’re purchasing your own insurance policy, compare the premium savings from a higher deductible plan with your usage pattern of health services. What you save can often cover your high deductible.

Weigh life insurance options while you’re healthy: A financial planner can help you make sure you’re carrying the right amount of life insurance to support your family and other heirs as well as cover any remaining medical bills that might remain after you die.

Discuss potential cost of any diagnosis: If your physician diagnoses a particular illness that requires tests, prescription drugs, a hospital stay or ongoing therapy, be very blunt about what you’ll be charged, from the doctor’s bills to ongoing ancillary costs associated with treatment. Ask the doctor or their office manager to possibly negotiate a discounted fee for service. It’s possible to get discounts through cash payments as well.

Ask for generics and samples: Many physicians are willing to recommend a generic substitute or at least supply you with a few samples of the drug they’re already prescribing. While doctors can’t get away with passing sample drugs to all their patients, you should always ask. As long as they are prescribing the medication, samples with the proper dosage can provide cost savings to patients.

Check local pricing resources: In non-emergency situations, you should always compare prices on treatments. Check with local medical boards and state health officials to see if they have online databases on costs for various medical procedures. Also, if there is a support group for your condition, talk to members about what they paid locally for care.

Talk to a financial adviser about planning for long-term care: If you or a loved one is diagnosed with a chronic illness, that’s a financial issue that requires a plan. As tough as it may be to focus on money issues at a stressful time, make an appointment with a tax professional or planner to discuss affordability options that will safeguard your assets.

Begin negotiations before there’s a problem: The best time to speak with a hospital isn’t when you’re behind on your payments. Once a diagnosis is made, either you or someone you designate as your agent needs to contact the hospital business office to check on payment schedules and possible discount plans if you are uninsured or fear your insurance may not cover a significant portion of costs. Any creditor appreciates a customer who’s willing to come to the table first.