Financial Planning for Complex Medical Needs

As of 2013, yearly unpaid hospital bills in the United States amounted to more than $40 billion. For families struggling to care for loved ones with complex health issues, the rising costs of healthcare and medical services can quickly decimate financial stability. Because the need for medical services is not always predictable, planning for medical expenses is the best way to guarantee security in difficult times.

Complex medical services are expensive

Whether you’re coping with a current medical situation or in financial distress from a previous event, paying for large medical expenses can lead to an inability to access basic needs, ensure retirement security, and put food on the table. Though not a comprehensive list, the following medical costs tend to give families the most financial stress:

  • Rehabilitation. Both inpatient and outpatient rehabilitative services may be required, but not all insurance plans cover services 100%. As a result, you’re left to foot the bill or risk lack of medical care.

  • Case management. Some individuals require the assistance of a case manager to ensure basic needs are met, appointments are kept, or respite care is provided. Often, these services are not covered fully by insurance.

  • Special equipment. From mobility assistance to life-saving medical devices, special equipment can be costly. Paying for medical equipment is challenging without a plan in place to cover the expense.

  • Specialist services. Between medical specialists, special education, or transportation, services required in a complex medical situation can be expensive and eat into your budget.

  • Surgical and inpatient fees. When insurance plans don’t cover 100% of surgical and inpatient fees, individuals, and families are expected to pay for a portion of medical costs. A bill such as this can be quite high and can lead to a serious financial crisis.

Tips to reduce medical expenses

Fortunately, there are a few steps you can take to start on the path to reducing medical bills and improving financial health:

  • Review medical bills. Though keeping all medical bills and receipts is a good idea, be sure to carefully review them first. Ensure there are no duplicate charges or invoices for services not performed.

  • Establish an emergency fund. In an emergency, the best preparation is planning. Create an emergency or medical fund to stow away savings for the next unexpected expense.

  • Create a pre-tax medical fund. Though becoming more popular, pre-tax medical funds or Health Savings Accounts (HSAs) are still widely underused. For individuals or families dealing with complex medical issues, an established medical fund can provide financial relief and peace of mind while saving real money on your taxes.

  • Adjust health coverage. Depending on your health needs, it’s wise to review your health coverage and determine if an adjustment is necessary. Choosing a plan with a higher premium that covers more services might be a better option.

Worry less about medical bills

Taking these steps will help you worry less about medical bills and spend more time enjoying life. Consider working with a financial planner to evaluate existing medical bills, create a plan to reduce debt and prepare for future medical expenses.

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