How to Financially Plan for a Chronic Illness

I was eight years old the first time a bleeding episode sent me to the emergency room.

My parents had pulled my tooth the night before, and I woke up in the middle of the night to a strange sensation on my face. I got up, looked in the mirror, and screamed.

My face was covered in blood and my tooth was still bleeding. My parents took me to the ER, where I was given a shot in my gums to stop the bleeding.

For years, everyone was dismissive of my bleeding symptoms, so I wasn’t overly concerned. It wasn’t until I was 29 that I was finally diagnosed with a rare bleeding disorder called Factor V Deficiency.

You’ve probably never heard of this disease, but I bet you’re familiar with Factor VIII Deficiency…better known as Hemophilia.

Your body has several different proteins called clotting factors which work together to make your blood clot properly. If any of these proteins are missing or deficient (like my factor five), blood clots more slowly than it should.

I have a mild to moderate deficiency, which means that I am very, very lucky.

Those with severe deficiencies are at risk for internal bleeding into major organs, spontaneous bleeding that occurs for no reason, and hemorrhaging from minor injuries.

Because my deficiency is mild, I am only at risk for severe bleeding in situations where heavy bleeding is common, such as during surgery. As a precaution, I would be given transfusions of fresh frozen plasma prior to surgery…which will cost several thousand dollars.

It’s important for me to be aware of this and to plan for it.  I do have insurance but my insurance company is awful, and they’ll find any excuse they can to pay as little as possible.

If you have a chronic illness, it’s crucial to plan financially for your illness.  Medical bills can be extraordinarily expensive, and it your disease causes you to be disabled, you may lose income as well.

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Here are several tips on how to financially plan for a chronic illness.

Choose The Best Insurance Plan

One of the best financial choices you can make when you have a chronic illness is to choose the best insurance plan for your particular situation.

Thoroughly review what the plan covers, what the deductible and coinsurance are, how much the co-pays cost, what prescriptions cost, etc. It’s also important to note any exclusions or exceptions to coverage.

Depending on your income and health situation, you might be eligible for assistance programs such as Medicaid, CHIP, or government subsidies to help with the cost of insurance premiums.

Do Your Research in Advance

Because my insurance company loves to get out paying for anything, I am very thorough about researching what my medical costs will be before I have any major tests or procedures.

If you’re about to have surgery or anything else expensive, get the CPT code from your doctor’s office so you can confirm with your insurance company that a service is covered. Get this confirmation in writing if possible.

Also, make sure that both the hospital (or clinic) and the doctor are in-network.  I had a gall bladder ultrasound earlier this year that wasn’t covered because the clinic was in-network, but the radiologist (a man I never met) who reviewed the scan was not.

Related: Why I Have $500+ in Unnecessary Medical Expenses – And How to Prevent This From Happening to You

Use an HSA or FSA

A health care savings account is a great way to cover qualified out-of-pocket medical costs.

With an HSA (health savings account) or FSA (flexible spending account), your employer will deduct money from your check and deposit it into a savings account that you can use for medical expenses.

This reduces your taxable income which saves you money. For example, if you earn $40,000 per year and put $3,000 into an FSA, you’ll be taxed as though you only earned $37,000.

What’s the difference between an FSA and an HSA? HSA’s are only used with high deductible health care plans. If you don’t have a high deductible plan, an FSA is a possible alternative for you.

FSA’s and HSA’s have different rules regarding annual limits, how much can be rolled over into the next year, and how the expenses are tracked.

For more info, read FSA vs. HSA.

Emergency Fund

An HSA or FSA probably won’t be enough to cover all of your out-of-pocket medical expenses. For any major emergencies, you can use an emergency fund instead.

Ideally, this money would already be saved before you start racking up medical bills, but that isn’t always what happens. If you’re struggling to pay your bills, the idea of saving might seem insane.

Dave Ramsey, author of The Total Money Makeover, recommends saving a $1,000 emergency fund before you start paying off debt.

This allows you to cover minor emergencies without taking on any additional debt. If $1,000 seems nuts, try a smaller amount to start with. Save any little bit of money you can here and there. It adds up!

After you’re debt-free, Dave suggests squirreling away three to 6 months of expenses in savings. This money can save you if you’re unable to work temporarily due to your illness or if you have an expensive medical emergency.

Stay Organized

When you’re dealing with a chronic illness, you may have tons of medical bills to keep track of.  Medical bills are notorious for frequent errors, so you want to be able to keep a close eye on them.

I keep all of my medical bills in a folder. You might try keeping them in a three ring binder if that works best for you.

Your binder could include all of your bills, records of payments, logins for medical records, your medication list, and any other pertinent information. If you’re a super organized person, you may want to create a spreadsheet to track everything.

Review Medical Bills for Errors

Once you have your bills organized, it’ll be easier to review them and spot any errors. Sometimes an insurance company may accidentally send you a bill for the same service more than once. I’ve found numerous errors on my medical bills.

On more than one occasion, I’ve been charged a (more expensive) specialist visit copay for a primary care visit. Another time, I received a bill for a copay I had already paid in person. I’ve saved hundreds of dollars just by reviewing my bills and questioning errors.

Set Up a Payment Plan

If you’re struggling to pay your bills, call up the hospital and ask about a payment plan. Depending on your income, you may also qualify for some sort of financial assistance. If not, you can still look into doing a no-interest payment plan.

Paying what you can allows you to start chipping away at your debt and to avoid paying more late fees on unpaid bills.

Disability & Life Insurance

If your illness (or any other health condition) ever prevents you from being able to work, it’s important to have disability insurance that covers a portion of your income.

Keep in mind that having a pre-existing condition may impact your disability insurance application and your disability insurance might not cover certain pre-existing conditions.

Life insurance is another important consideration. Again, certain pre-existing health conditions may make you ineligible for life insurance. Do your research so you know what is and what isn’t covered.

Thinking about life insurance and disability is unpleasant, but it’s best to be as prepared as possible.

Make Money from Home

If you find yourself buried in medical bills or if you become disabled and unable to work a “regular” job, you may want to look into easy ways to make money from home.

These days, there are all kinds of nontraditional ways to earn an income. Here are a few examples of careers that allow you to work from home 100% of the time:

• Freelance Writer
• Proofreader
• Blogger – to set up a blog, check out my simple tutorial for starting a WordPress blog on Bluehost
• Photographer
• Freelance Graphic Designer, Web Designer, or Digital Marketer
• Etsy Shop Owner

To make a little extra cash here and there, try:

• Selling old items on Craiglist or Ebay
• Having a garage sale
• Using Ibotta to earn cash back on groceries
• Earning cash back with Ebates when you shop online
• Taking surveys for cash with Inbox Dollars

Find Easy Ways to Save

When you’re struggling financially, you might feel like you’re already frugal and there’s nothing more you can do to save. There usually are more ways to save money than most people realize.

Here are a few tips:

Create a budget and stick to it.  Make sure your budget includes your estimated medical expenses for each month.

Review your bank accounts regularly. My husband isn’t the most organized person (he has many other amazing qualities!), and he’s been charged for subscriptions for months after he canceled them without even realizing it.

It’s also important to review your paychecks and any other financial information regularly. Mistakes happen! You shouldn’t have to pay for someone else’s mistake.

Cut items from your budget where you can. You could try getting rid of cable or your landline telephone, canceling any subscriptions you aren’t using, or finding ways to have fun for free.

Reduce spending in other areas. Groceries are a big budget buster for many people. You could find a cheaper grocery store, use coupons, or buy items in bulk.

In addition, you could try finding a cheaper cell phone plan or a less expensive internet package. Many companies are willing to negotiate on prices if you threaten to cancel your account and go elsewhere.

A Financial Plan

Living with a chronic illness is stressful enough without the added burden of financial problems. If you have a chronic illness, make sure to:

• Choose the best insurance plan for you.
• Do your research so you know what to expect.
• Use an HSA or FSA for out-of-pocket medical expenses.
• Create an emergency fund.
• Stay organized and review medical bills for errors.
• Set up a payment plan if needed.
• Consider disability and life insurance.
• Find easy ways to save money and earn more.