If you’re dealing with a medical emergency, whether your own or that of a loved one, we are sorry you’re going through this. We know how scary it can be!
A medical emergency is frightening enough without having to worry about financial decisions. Even with insurance, medical bills can be expensive. And if the emergency impacts your or your loved one’s ability to work, you have to adjust your budget to account for lower income or higher expenses as well.
While navigating your health or the health of a loved one, the question becomes: How do you make the best financial decisions for your family at this time? What can you do to stabilize your finances for both the short-term and long-term?
There’s no universal answer — the best decision for your family depends on your unique financial picture. However, we want to make sure you have some support during this difficult time. We’ve created a quick guide to help you take stock of your finances during or after a medical event has impacted your family.
Step #1: Protect Your Income
If you don’t have a big emergency fund, you’re not alone. With the economic challenges of the last decade and the high cost of healthcare, it’s hard to save enough to cover expenses related to a medical emergency.
Emergency room bills aren’t the only concern. If you or your partner is injured and unable to work for a while, you’ll have to figure out a way to offset that lack of income.
Fortunately, there are a few steps you can take to limit the toll on your income and budget:
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- Talk to your employer: If you were injured at work, you might be eligible for workers’ compensation. Even if your medical emergency isn’t related to your job, you may be able to work with your employer to alter your schedule, work from home, or go on temporary unpaid leave.
- Look into unemployment: Depending on your state laws and the details of your situation, you might qualify for unemployment benefits if the medical emergency prevents you from working for a long period of time.
You may also want to consider other ways to augment your income. For example, you or your partner may be able to earn a little extra by taking on gig work, such as delivering food or driving for a rideshare company.
Step #2: Research Short- and Long-Term Disability Options
You might qualify for disability insurance through your employer, or you may have private disability insurance coverage. Disability benefits usually allow you to receive a percentage of your salary while you’re unable to work. There are two basic types of coverage:
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- Short-term disability insurance: In most cases, this type of policy lasts for a few months (often up to six).
- Long-term disability insurance: If your medical condition will last beyond a few months, you may qualify for long-term coverage. With this type of coverage, you might be able to receive a portion of your salary for a long period of time. However, eligibility requirements may be strict, and it can take a while to file a claim.
Disability insurance can significantly lower the impact of a medical emergency, but policies can be complicated. It’s a good idea to research your coverage and learn how to file a claim as soon as possible, especially if you have to go through your employer.
Step #3: Take Advantage of State Programs
Many states offer programs to help residents cope with the financial stresses of medical emergencies. Some of these programs offer benefits for caregivers also, which means you might be able to qualify if you are caring for a spouse or family member who is ill or recovering from an injury.
For example, in Colorado, the Family and Medical Leave Insurance program gives residents access to paid leave during emergencies when they or a family member is unable to work. State programs like these often cover situations such as childbirth and serious health conditions.
Look and see if your state offers a similar program. You may be able to qualify for paid leave while you recover or care for a loved one.
Step #4: Consider Additional Resources and Aid Programs
If your state doesn’t offer a financial assistance program, there may be other options. For example, if you have any saved sick leave or paid vacation with your employer, you can use that.
If your health insurance includes a health savings account (HSA), use any money in that account toward the cost of care. With an HSA, the funds you withdraw to cover eligible medical expenses are tax-free.
If there’s still a financial shortfall, consider requesting help via a crowdfunding platform like GoFundMe. This option may not be a long-term solution, but it could help you cover immediate financial emergencies such as high medical bills.
Step #5: Review Your Medical Bills
Medical bills are often complicated, and the thought of going through each line can be overwhelming. But it’s important to do so — errors and unnecessary charges are more common than you may think.
Start by asking for an itemized bill. Review every detail to ensure there are no duplicate charges or incorrect expenses. You may also want to contact your health insurance provider to make sure that you receive all the benefits included in your coverage plan.
If you do find errors or charges you don’t understand, follow up with the medical facility to get more information or request that they be removed. Many hospitals and doctors offices allow you to break up large bills into monthly payments (often without interest), allowing you to pay over time. Having a thorough understanding of your medical bills can also help you negotiate a payment plan that fits your budget.
Step #6: Prioritize Your Long-Term Financial Health
The stress and emotions of a medical emergency can make it hard to think about the future. But it’s vital to consider your ongoing financial health and future goals while you’re making a plan to cover the immediate expenses.
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- Essential expenses: Start by identifying necessary spending, such as housing, food, and utilities. Depending on your situation, you may also have childcare expenses or transportation costs. If you think you might not be able to pay for some of these essentials, try contacting your providers to see if they have any options for financial relief.
- Cut discretionary spending: If you need to lower your expenses for a while, focus on non-essentials like entertainment, convenience services, and vacations.
Taking these steps can help you avoid making impulse decisions that harm your overall financial stability.
Step #7: Get Guidance From a Financial Expert
Financial planning is about more than just budgeting, investing, and making retirement plans. An experienced planner can help you navigate every aspect of your finances, including a complicated medical emergency.
Consider reaching out to a financial planner for guidance and support on
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- Adjusting your budget
- Accessing disability benefits or assistance programs
- Managing debt with a feasible repayment plan
- Covering the cost of long-term care
A financial planner can help you minimize the financial impact of a medical emergency.
Feeling Overwhelmed After a Medical Emergency?
Managing your money can be stressful when you’re dealing with a medical emergency. If you want an expert to help you navigate medical bills, assistance programs, and budgeting challenges, Guiding Wealth can help.
Our experienced financial planners are dedicated to helping you make the best decisions for your family and goals. We understand that medical emergencies happen, and we work with you to ensure that you can remain financially stable and on track for your long-term goals.
We can also help with other aspects of financial planning, from debt repayment to retirement planning. Whether you want to start investing or need help coping with medical bills, you can trust Guiding Wealth for comprehensive, compassionate advice. Schedule a consultation online to get started.