If you’ve recently been diagnosed with a long-term illness, it can be stressful and confusing to make a future-facing money management plan.
Especially in the United States, people who live with a chronic illness can encounter immense financial struggles. Between the rising costs of housing and medical care, keeping your head above water can feel like a daunting task.
But there’s hope: With good money management skills and links to support networks, your financial outlook can become stronger than ever.
Let’s start by learning how to build a budget, prepare for future costs and protect your hard-earned money, so you can focus more on what truly matters: your health and peace of mind.
Planning Ahead With Your Health and Money in Mind
When you have a chronic illness, you have to plan ahead. Making a roadmap and contingency plan can help you avoid money problems and focus more on your health.
Step 1: Know Your Health Insurance
- Get Acquainted: Know your deductible, co-pays, and out-of-pocket maximum clearly. Being aware of these details helps you budget for expenses.
- Check Coverage: Verify that your treatments, medications and healthcare providers are in-network and covered. Always confirm coverage for special treatments in advance. Learning your medical plan’s coding system can be a major boon to getting clear and precise answers.
- Review Annually: Health plans can change. Check your plan each year to ensure it still meets your health needs and financial situation.
Step 2: Create Dedicated Savings Account for Healthcare
- Flexible Spending Accounts (FSAs): If your employer offers this through your benefit package, sign up. FSAs let you save pre-tax money from your paycheck to use on healthcare costs throughout the year.
- Make an Medical Emergency Fund: Start putting away additional savings for unexpected medical costs beyond what an FSA might cover. This prevents reliance on credit cards during health emergencies.
Step 3: Find Financial Assistance for Medical Expenses
- Government Assistance: Programs like Medicaid and Medicare Savings Programs can help if you meet income qualifications.
- Hospital Financial Aid: Nonprofit hospitals typically offer financial assistance programs to reduce or forgive medical bills. Call the hospital’s billing department and ask about their “Charity Care” or financial assistance policy directly.
Step 4: Have a Gameplan for Large Medical Bills
- Look into Patient Advocates: Patient advocates help manage and negotiate medical bills, correct billing errors and communicate with insurance companies. When you don’t have the “spoons” to deal with the stress, these folks are worth every penny.
- Financial Counseling: If medical bills pile up, a financial counselor can guide you through your options.
- Debt Consolidation: If you have different types of unsecured debts, like medical bills, credit cards or personal loans, a debt consolidation program can save you money on your payments and help you regain control over your finances.
Step 5: Build Long-term Financial Stability
- Apply for Disability Benefits: If chronic illness affects your ability to work, explore options like Social Security Disability Insurance (SSDI) or private long-term disability insurance to provide steady income.
- Prioritize Your Well-being: Having a solid financial plan means less stress, allowing more resources for healthy food, rest and activities that enhance your quality of life.
Need help? We’re here to walk through your options.