Understanding Investing Options and Medical Bills
Understanding your investing options can feel like a daunting task, and no one wants to think about medical bills. At best, you might consider them slightly intriguing topics, or maybe they’re simply boring and uninteresting to you. At worst, they can be terribly stressful. Regardless of how you feel about either, they are both important topics in which you should be informed.
I want to introduce a phrase that I will refer to in later posts- “Chronic Finances.” This statement means one of two things and at least one will apply to everyone.
- If chronic means persisting or long-lasting then chronic finances should be your lifelong budget/income plan- how you earn and spend money. It doesn’t have to be a bad thing (or an illness), but it could be!
- For those with chronic illnesses, the phrase has a second meaning- budgeting for medical illnesses (be it treatments, office visits, time away from work or otherwise). This takes special consideration as chronic illnesses often come with steep price tags.
- The Lifelong Budget
Do you know your net worth? Do you know how much you will be worth tomorrow? Next year? Five to ten years from now? Do you know your investing options? Maybe you know the answer to the first question, maybe you know the answer to all of them (good job!), but maybe you don’t know the answer to any of these questions.
Few of us know what our financial worth will be far down the road, but you should have at least some short-term indication if you ever hope to purchase a house or a new car. Do you have a savings account? That’s a good start.
There are numerous options for savings and investments.
Investing Options
- Savings/Checking Account
- Retirement Savings (i.e. 401K, IRA, Roth IRA)
- Certificates of Deposit (CDs)
- Real Estate
- Other investment accounts including
- Mutual funds
- Exchange-traded funds (ETFs)
- Individual Stocks
- Bonds
It’s always a good idea to be informed about your investing options, as they will allow you to build long-term wealth. I will explain more about each of these types of investments in later posts.
2. Budgeting for Illnesses
Medical bills are expensive. Worse yet is that medical bills don’t come with an obvious price tag. Like something in the store? Simple, the price is usually displayed. I wouldn’t buy something without knowing the price, would you? Insurance should be able to provide estimates for office visits and other basic services, but those can be difficult to get.
How do you budget for an unknown expense?
How to Budget for Medical Bills
A few approaches you might decide to take are as follows:
Look into past history
Have you had the same office visit or medical service in the past? Will you continue needing it in the future? How often might you need it in a single year?
For example, if I receive infusions every 8 weeks then I know approximately how many I will need to have per year (6 or 7). If my infusions cost $5,000 each then I should expect a cost between $30,000 and $35,000 per year before insurance pays (because 6 x $5,000 is $30,000 and 7 x $5,000 is $35,000). Once I have this information, I will need to determine what my out of pocket expenses will be after insurance pays their share, but more on this later (this is where it gets more complicated).
This is a great place to start if this information is available to you.
Contact Your Insurance
If you haven’t had the service before then you can get estimates from a customer service representative with the insurance company. In my personal experience this has been a hit or miss. I’ve had customer service representatives that were very helpful and others that were awful. The level of service also depends on the company itself- some are great, others less so. It is, however, still worth looking into if you can’t rely on history!
Ask family or friends
Do you know someone that had an office visit with your doctor? Or had the same medical treatment? Getting this kind of information can be difficult as people tend to be private about their medical history (unless you’re close). I would broach the topic cautiously, but if you’re a close friend or family member and can explain your need, it may help! Bonus points if they have the same insurance (remember that your out of pocket expenses will depend on your insurance policy).
Wait until you receive a bill and hope for the best
This is by far the most common approach (also the easiest), but it’s also the riskiest. Most medical offices don’t send out bills until a month or so after a medical service or office visit has been completed (once insurance has paid their part). Payment terms can vary, but most doctor’s offices expect payment within 30 days. It could be incredibly difficult to make a payment of a hundred dollars or more if you aren’t ready!
In summary
Stay informed about your investing options and adapt your finances to budget for medical bills. Trust me when I say that it will definitely make things easier in the long-run!
The better prepared and budgeted you are, the sooner you can escape debt and build long-term wealth and successful finances.
Keep reading on to learn how to build long-term wealth. Better yet, follow the blog so you never miss an update!