Illness Happens: Navigating the Cost of Care
Podcast Transcription
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Hi everyone, thanks for joining me for this episode of PFCU's Money Talk Podcast. I'm your host, Maddy. Life can come at you fast and you want to be prepared for what could happen, especially when it comes to your finances. Whether it's a sudden illness, short-term illness, long-term illness, or caring for someone you love, there's going to be an impact on your finances. And we want you to be better prepared with this guide and the resources it holds. Let's start with sudden illness. Sudden illness occurs when a medical ailment develops abruptly and unexpectedly.
Since the nature of sudden illness is to strike fast, it's hard to catch a breath before you're completely submerged in financial, physical, and mental exhaustion. And to help, here are some things to keep in mind.
First is the choice of going to an urgent care facility or an emergency room. And this decision can be made by considering two different things, the cost and the type of emergency. Emergency rooms are equipped with all the bells and whistles of a traditional hospital. They're also legally required to treat any patient regardless of if they have health insurance or are able to pay out of pocket for costs. So, keep in mind that even if you can't pay a portion of the bill upfront, you will still be expected to pay afterwards. And average costs vary by state and illness, of course, but an ER visit averages out to be roughly $2,000 nationwide, which is far higher than what you're going to pay at an urgent care. So, it's a big decision.
Now a visit to urgent care centers costs on average $100 to $150 per insured patient, depending on the co-pay and how much treatment was needed. But even without insurance, the average cost still is pretty low between $150 and $200, depending on your needs. However, an urgent care is limited on what they can treat. They're more equipped to handle non-life-threatening conditions, so it's best to head to the ER if you're experiencing any life-threatening symptoms.
A short-term illness won't keep you down for long, and that's good news. Although it does go away relatively quickly, it's not to say life won't be difficult when you're sick, especially if work is less than forgiving with their sick leave policy or you have a family that still needs taking care of. But there are lots of things in place to help you manage. Short-term disability is a type of insurance that is either offered through an employer or can be purchased on an individual basis through an agent or broker. This insurance covers anything from childbirth and physical injury to mental health.
If it's offered through an employer, it's generally 40%-80% of your salary that's covered for a fixed amount of time, which is usually three, six, or 12 months. Typically, the first step to applying for short-term disability is to speak with your HR department if you have disability insurance through your employer. Otherwise, you're going to be calling your insurance company directly.
Now, a long-term illness will affect your life indefinitely and can only be controlled by medications or treatments. Some examples of long-term illnesses include diabetes, arthritis, high blood pressure, epilepsy, and asthma. You could apply for long-term disability insurance to cover the costs or wage losses for any disabilities lasting longer than six months. To apply for long-term disability, you must meet the Social Security Administration's disability requirements.
Okay, now let's talk about medications, which we know are not cheap. And paying for treatments and medicine for an extended period of time can take a serious toll on your finances. But there are programs that can help. So here are some plans and benefits to ask your current or future employer about.
The first one is a flexible spending account or FSA. This is an employer sponsored plan that can be used to pay for qualifying healthcare costs like deductibles, copays, coinsurance, prescription drugs, or other medical equipment, which would be like crutches or wheelchairs.
A health savings account or HSA is a savings account that lets you set aside untaxed dollars to pay for qualified medical expenses. There's lots of acronyms here.
A Health Reimbursement Arrangement or HRA is a virtual fund that helps pay for qualified medical expenses. So, what is different with a health reimbursement arrangement from an FSA or an HSA is that employers are the ones who contribute to an HRA. So that means that the employer decides what this fund covers. In some cases, if the company provided health insurance doesn't cover prescription costs, then the health reimbursement arrangement will. That was a lot but just remember that you have options a lot of the time, flexible spending accounts, health savings accounts, health reimbursement arrangements. So, look into your options and don't forget about all the federal and state benefits that are available to low income, disabled or people of retirement age. Two great examples of these benefits would include Medicare and Medicaid.
Medicare is a federal insurance program for disabled or dialysis patients under 65 and anyone else over the age of retirement. The US Treasury holds a total of two trust fund accounts that are designated only for Medicare. You can visit Medicare.gov for more information on this.
Medicaid is an assistance program created for low-income families to help cover their medical expenses. Visit Medicaid.gov to find eligibility requirements and more information.
That was a lot of information. And again, this information can be different and applies differently to everyone, right? Depending on your illness, your insurance, your employer, what you need. But no matter what your situation is, illness can be a difficult time for anyone involved. And that's why it is a good idea to shield you and your family from the inconveniences that usually follow getting sick. Hopefully these resources and tips can help you make more informed decisions, at least take the first step of getting that information.
Thank you so much for listening to this episode. See you next time.
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