Financial Management During Crisis

Every parent knows that raising a child is one of life's most fulfilling challenges. But if your child has a chronic illness, condition, or disability, your role takes on an even greater purpose. You are more than a loving parent — you have become your child's primary health advocate.

Although the emotional price of raising a seriously ill child can be devastating, it's only part of the picture. Even during this difficult time, you have to consider the financial implications of your child's illness. Some parents become overwhelmed by medical expenses or are blindsided by unexpected bills and additional fees. Even wealthier families can find themselves on the brink of financial free fall because of accumulating medical expenses.

Even so, maintaining your family's financial health is not impossible. With organization and careful planning, you can learn to manage your money during a medical crisis.

Costs of Health Care

The costs of long-term health care can be staggering, and families don't always heed them until they're hit with the first bill or explanation of benefits that they don't understand. "When you're faced with a child with as many medical complications as our son, we were just worried about having him breathe every day and the last thing we thought about were the bills," explains Carol, whose son Dylan has spina bifida.

Some parents may think that insurance will cover all or most of their child's medical expenses — or that being able to afford their child's health care needs won't be a problem. But each medical service comes with its own price tag, and parents are often shocked to learn that hospital care, surgical procedures, doctor visits, and laboratory tests are separate services with separate bills. "Financially, it was a disaster coming. Her first hospital bill, not including surgery and anesthesia, was $308,000," says Kellie, whose daughter has a serious disability. Even the typical 10% co-pay can consume a family's financial reserves.

Some parents may overlook costs that are indirectly related to their child's care — costs that can quickly add up. These include missed time at work, child care for siblings, increased utility bills, custom transportation, and home renovations, such as ramps for wheelchair accessibility.

There are ways to handle these costs, but you need information to negotiate your way through the health care system.

Understanding the Health Care System

The best way to make sense of bills and prevent financial problems is to take a proactive stance. Learn all you can about your health plan.

Just as you want to know as much as possible about your child's health, you should learn as much as you can about your insurance policy. Which doctors participate in your plan? What services are covered? Learn the meaning of insurance language:

• co-pay — the part or percentage of the bill you are responsible for
• deductible — the amount you must pay before your insurance company will pay for services
• referral — your insurance company may require your child's primary care doctor to refer your child to another doctor or specialist before your insurance company will pay for services performed by another doctor
• precertification — you may have to let your insurance company know in advance about any medical tests or treatments the doctor has ordered. If you do not precertify before receiving treatment, the procedure may not be covered.
• network provider — any doctor, hospital, or other provider of medical services who has agreed to participate in your insurance company's network and to offer their services at negotiated rates. Also called a participating provider.
• pre-existing condition — an injury or illness that existed prior to the effective date of your current insurance policy and therefore may not be fully covered
• usual, customary, and reasonable — refers to the amount usually charged by health care providers for services and treatments in the area where you live

Understanding your health plan's design and its policies can ultimately save you thousands of dollars.