Financial impacts of a serious illness (and how to prepare)
September 27, 2021
Living with an unexpected illness or disease costs us physically, mentally and emotionally. But what many people don’t understand are the substantial financial costs associated with having chronic conditions.
These are the most obvious. Medications, lots of trips to your doctor, your specialist/s, allied health professionals, tests, rehab, surgery, orthotics….they all add up.
While GP Management Plans assist with the cost, there are mostly only five visits provided, and these are used up very quickly. There may also be a gap payment over the Medicare Rebate. And there are also often considerable out-of-pocket expenses to see a specialist privately or long waits when you see them publicly. This can put a significant strain on a person’s finances.
When you are ill, you are unable to work which means using up sick and personal leave, and in some cases your annual leave entitlements. Depending on how much time you need to have it could become unmanageable and may result in someone having to permanently reduce their hours, change jobs, become unemployed or retire early.
Any of these things will obviously affect your everyday finances. However, it can also affect your future finances as superannuation is impacted by reduced or lost income.
Here are some hidden costs you might not have considered.
- Home and car modifications
- Buying various household gadgets that help you manage your health issue.
- Cost of Taxi’s or Ubers if your ability to drive is impacted
- Meal delivery services if you are unable to cook for yourself
How can you prepare financially
Have an Emergency Fund – an emergency fund is something that you save outside of your regular savings account, so you can be prepared for unexpected car repairs, medical bills or simply to get yourself out of a tough situation.
Check your Financial Planner – Its good to know what cover you have in your Superannuation or other personal insurances.
Check your health cover – Understand what level of cover you have and what your health fund will cover you for. Eg: If you’re a private patient having in-hospital treatment, Medicare will pay 75% of the MBS fee for each MBS item provided as part of your treatment. Your health insurer will pay the additional 25% if you’re covered by those benefits. However, you can contact Medicare to confirm the amount they’ll pay for the medical services provided if necessary.
Apply for a medical loan – these are personal loans that can be taken out and used for medical expenses, like surgical procedures or dentistry. These can be a good option for particularly large – and unexpected – medical costs.
Talk to your doctor – understand what the costs are upfront and payment options. If you can’t cover the medical bill, you may want to contact your doctor’s office as soon as possible to let them know. They may opt to provide you with a negotiated fee or a payment plan