Healthcare can get very expensive, very quickly—especially if you haven't planned ahead. When a medical crisis threatens your health, it can also jeopardize your financial security.
The Covid-19 pandemic has been a powerful reminder of how important it is to prepare for the unexpected when it comes to healthcare. For example, a patient who experienced a severe case of Covid-19 spent several months in rehab. When the patient's insurance stopped covering treatment, their out-of-pocket cost was more than $60,000 a month.
Health advisors and wealth advisors often work together to keep their clients in good shape both physically and financially.
Doing the Math on Healthcare Costs
Having a plan in place can help prevent unanticipated healthcare costs from draining away your savings. How fast can the costs of care add up? Here a few more examples:
- A rare illness. When someone is diagnosed with a rare illness, their health insurance plan may not cover cutting-edge experimental treatments or extremely high-priced medications, and depending on their financial situation, they may be ineligible for medication discount programs.
- Inpatient treatment for substance abuse or mental health services. Most of these programs are not covered by insurance, and treatment can cost $50,000-$75,000 a month. Treatment typically starts with a 5-10 day detox, which can cost $1,000 a day.
- Long-term care. The costs of nursing homes and other long-term care programs are higher than many people realize. If a 65-year-old patient with Alzheimer’s moves to an assisted-living facility and lives there for 20 years at a price of $20,000 a month, that stay will cost nearly five million. Private duty nursing at home at a price of $125 an hour will cost $3,000 a day, or one million a year.
What a Health Advisor Can Do
- Collaborate with your financial advisor to create a health and wealth plan for your family
- Ensure that family members have appropriate health insurance based on their individual needs
- Negotiate the cost of treatments that are not covered by insurance
- Manage insurance appeals and denials
- Create alternative treatment plans that are more cost-effective while still providing great quality care
If you and your family are currently in good health, it may be tempting to put off preparing for a health crisis. But it’s worth taking the time to consider how your family’s healthcare needs will change over time. Putting a plan in place now will help you maintain your health and your wealth in the future.