Ask the Readers: Personal Finance During a Health Crisis?
Friday, 22nd June 2007 (by J.D.)This article is about Ask the Readers, Planning, Real-Life
What would you do if you knew you were dying? How would a cancer diagnosis affect your personal finance decisions? The Travelin’ Man from Stuff You Oughtta Know isn’t dying yet, but he’s had a scare.
Here’s his story (this is not written by J.D.): I was given my very first cancer scare last week. I have to tell you — it freaked the hell out of me. For that matter, “scare” may not be the most accurate word. The doctor told me that I have cancer — I am waiting for the results of the biopsy before I am really willing to accept his diagnosis. Anyway, the “freaked out” part is that I just don’t know what to do — and there isn’t as much information out there as you would think, about the things that I care about.
Just in the past week I have found myself doing the things that I normally do — and then stopping and questioning the sanity afterwards. For instance, I added to my long-term stock holdings last week. Again, I don’t think I am going to die, but should I be more conscious of potentially needing the money to be spent on something else short-term — that would be more important than a few more shares of stock?
Some of the questions I have are (and all assume the worst-case scenario, for the sake of discussion, even though I don’t think I am in the worst-case scenario boat):
- Should I alter contributions to my 403b retirement plan? I get a match of 100% up to 5% of salary. I currently contribute 10%.
- Should I divert more of my paycheck earmarked for investment into a high-yield savings account, at least for the short-term?
- Of the money I already have invested, do I need to consider re-allocating my assets to a less risky portfolio (Hey, I am young — it is almost all stocks — and weighted heavily to international ~35% or so)?
- I don’t have a will or living directive written. Is there a process that I need to follow?
- I am single with no dependents — how would that alter your way of thinking versus being married with a few kids to take care of?
- My employer is very generous with paid leave, and I have about 400 hours of sick time accrued. How important is it to manage that time versus looking at things like short-term disability (pays about 2/3), or is that even an option?
- Given the likelihood of remission, but possibly having to deal with this again in the future, how would you alter choosing health insurance packages? Would something like AFLAC be beneficial during the next sign-up period?
- At 35 years old, is it too early to start thinking about long-term care insurance (again, single with no dependents)?
- While my credit is not stellar, I have made great strides to improve it (the only outstanding debt I have right now is my mortgage and student loans - the total of which is about $45k). Are there any “best ways” to handle in the impending medical expenses?
- Are there any other spending or saving habits that you would adjust?
This just scratches the tip of the iceberg of questions that are flowing through my head now, but it is a start.
Let me say that I am not looking for sympathy (heck, I don’t even think the cancer diagnosis is true yet!), and, even if it is true, I don’t think I am going to die. I am not looking for an outpouring of support and prayer (though, I am not going to kick anyone away with a better pipeline to the “Big Guy” than myself), but what I hope to find is excellent, practical, situational personal finance advice for a niche that seems to be lacking. Thanks for reading all of this gibberish. Now back to your regularly scheduled program.
Again: this is not my story — this was written by Travelin’ Man. But his question hits home for me. My family has a history of cancer, especially at a young age. My father died from cancer just before his 50th birthday. My 46-year-old cousin is fighting it now. I am 38. This stuff worries me every day. Madame X at My Open Wallet addressed this question today at her site. What advice can you offer for Travelin’ Man?
Hi. For a single person, I think the best advice is to identify someone who is willing to be your health advocate–someone to go to appointments and take notes, help with understanding your work options (even with all that vacation time, you’ll probably need to talk with HR about eligibiblity under the “family leave” policy (assuming you’re at a company of over 50 workers), help do internet research, and so on. This may be harder for men, but it is really necessary!! I spent 2005 having cancer treatments, and the help of my partner (then, now my husband–that’s one change having cancer led me to make), and it was totally helpful to have his concrete support. We were lucky that his employer understood that this wasn’t just my diagnosis, that his life was being affected as well and who let him use his vacation/sick time as needed to help me.
But, enough of that digression — now, two years later, (but still taking follow-up medications and dealing with the side/after effects of my treatments) I’ve found that cancer has made me even more determined to retire early. I don’t know if or how much cancer may have shortened my life, but certainly it hasn’t changed my mind about wanting to live in a way that minimizes the time I work and maximizes the time I spend at my own devices.
One thing I haven’t done is buy long-term care insurance. I just have never seen a policy that seemed worth the money.
I can’t speak to much, as I am a newbie, at 39, to all of this. What I can say is that you must get a living will and advanced directive! I know you can get one at the hospital if you’re being admitted. Other than that, you can talk to your doctor. There may be other resources. My mil had a stroke a few years back. They couldn’t find her living will and advanced directive, of which my dh was the executor. The hospital and other family members went against her wishes and did brain surgery. Now she is completely dependent on a full time nursing staff. She is blind in one eye and can’t move the left side of her body. Because she can’t speak, all health care decisions have been taken out of her hands because no one, except my dh, can understand her. We live three states away. It’s very sad. She wanted to die if it came to it.
When thinking of these issues, it’s very important to think of the feelings of those who would be left behind, those who would be caring for you or arranging things. Keep in mind their financial limits, which are huge unless they are millionaires. Another mouth to feed is one thing, medical care is another.
Also keep in mind that humans are emotional beings. Logical decisions are rarely made when someone you love is in a difficult position. Relatives may do what makes THEM feel better, not what you want. While you have no dependents now, that could change. What’s more, someone will be left making decisions for/with you. That person needs to know your feelings and wishes. And, if those feelings change, tell someone.
Good luck with your decisions. Good health and long life.
I have to also emphasize the will, living will & medical advocate.
Make a will, keep it up to date & make sure it (and all other important documents) are easily available for your loved ones. Having to hunt for important papers after the death or incapacitation of a loved one is the *last* thing our friends and family want to deal with.
The living will is very key. Lay out what you want to happen to you in particular circumstances, should you be unable to speak for yourself. You may assume that your mother/wife/whomever will know, but, unless you lay it out for them, you can’t know for sure.
Mistakes happen in the medical profession. They happen because of poor communication & human error. Having an advocate to keep up with things when you are unable (whether because you’re too exhausted or literally incapacitated) is key. Nurses have neglected to look at patient charts & have given patients who were scheduled for surgery full meals or medicines to which they were allergic. Doing your best (or having an advocate do THEIR best) to stay on top of things & catch those mistakes before they become a problem saves you time & difficulty.
Lastly, most funeral homes will let you put together a funeral plan. It sounds morbid, but, again, it will save your family from having to deal with it later. It lets you get the funeral you want (people DO fight over these things after the death of a loved one), and, you can look at the expense to your family.
My family went through this a few times unfortunately. My only financial advice would be to have a good amount of cash on hand. Health plans don’t always provide the best care immediately, and there are many more services you could get access to if you’re willing to pay out of your own pocket.
Gal
I don’t know if I can help with too many of your questions, but I would like to throw this piece of advice out there: find an attorney if you haven’t already. With ~400 sick hours available to you, I’d take a day or two off and talk to an attorney about making a will. Even if God himself tells you that you’re not going to die until you hit 100, it’s still a good idea to have one and have one early. From what I hear, it’s a relatively painless process and there’s even places online that can help you write one up. As a big proponent of “Getting Things Done”, I think getting that this part knocked out will be a big relief now and in years to come.
I think that if the money you have invested is mostly in retirement funds you should leave it where it is. You still have twenty years until retirement. Whether or not you make it that far is irrelevant. If you wound up eventually with a reduced life expectancy, and/or the desire to retire earlier, you’ll probably appreciate the extra growth and can adjust then.
I agree with the comments about a healthcare advocate and also a living will. I’d also add that you need to continue to live sensibly and not resort to lots of credit card debt, probably the second worst scenario is that you are ok but permanently sick/disabled. High credit card debt would not be helpful at that point.
I’d suggest reading your healthcare plan carefully, and making sure that someone else knows it thoroughly too. If you know whats covered you’ll have a better idea of the out of pocket costs you might face.
1. get a will/living directive
2. make some of your investments more liquid
3. make your retirement portfolio a little more conservative until you know your prognosis.
4. you can only get std benefits if you are disabled in your ability to do your job, not because of a diagnosis. if you are disabled, take the std benefit. even though it is 2/3 only, it is most likely not taxable. also i f you are disabled, look into ltd benefits at work.
5. you have no dependants, which means it is less critical to have life insurance (it will be very hard to get covered for this in future if you do have cancer, i found this one out with my wife).
6. as far as aflac in the future, your premiums will be sky high with a diagnosis of cancer. same goes with long term care insurance.
7. liquidizing some investments will make it easier to cover medical bills. and remember as long as you show good faith with monthly payments most medical businesses will work with you.
8. remember that most cancers are very curable nowadays, so still plan for the future.
9. i wish you the best of luck, and i’m sure you’ll do great.
cheers, dave.
Following up with what 60in3 mentioned, hopefully your medical insurance will cover the financial end of things. I’ve seen too many examples of people being blindsided by their insurance and the fine print in their policies.
Take the time to check out your medical insurance and find out what you are covered for. Then, as you deal with the doctors, you know what other questions you should be asking regarding types of procedures and medications that are available.
It would also give you insight into whether or not you need supplemental insurance.
If it turns out that you do accumulate medical bills that are not covered, you can eventually consolidate those expenses with your other debt and make the repayment more manageable while you recover.
Thomas
I don’t have any practical experience to offer, but I think the answer to your question, “Should I divert more of my paycheck earmarked for investment into a high-yield savings account, at least for the short-term?” is yes. The liquidity of that money seems well worth the interest earnings you would lose. That liquidity will help you keep things off credit cards, make co-payments, pay for medications, travel, meals, and all the extra things you can’t think of right now.
As far as Aflac, they do offer cancer coverage, but because you have been diagnosed you can’t get it. Or rather, you can get it, but it will only cover some future diagnosis that is not a recurrence of this particular cancer. If you have a cancer with a high cure rate and good prognosis, it might be worth it, but personally I’d put this off until after your treatments are over. It’s not pressing.
It’s great that you have so much sick time saved up. Check your employer policies. Some places require that you use it all before going on disability or taking FMLA leave. Your doctor may be able to tell you what to expect from treatment in terms of how many days you’ll probably be sick. Some people don’t take much leave, others do.
I’d just build up as much of a cushion - of money, concrete offers of help from friends, leave time, and energy as possible.
Good luck.
I can’t stop thinking about the story of a guy (mid 50s) that was diagnosed with terminal cancer. So he spent everything he had (savings, retirement, etc). A few years later, they learned it wasn’t terminal cancer, but he was already out of money.
I have enjoyed reading your blog and wish you best of luck beating this cancer.
I can sympathize with you to a certain extent. My family has a history of early aged cancers. Most of the women died before they were 40 to breast or skin cancers. It’s something that’s always in the back of my mind while I plan for things.
The only concrete suggestion I can think of is to get a will and a living directive in place. We don’t want to think about worse case scenarios but it’s something as adults we need to do.
Good luck JD! You’ll make it.
The “right” advice would seem to be one thing if you’ve got, say, a rather mild form of skin cancer and another completely if you’ve got, say, pancreatic cancer.
Getting a will and a living will, though, are not expensive in absolute terms. If you’ve got absolutely no relatives you can perhaps do without the will (though I would spend $100 - $250 on a consultation with a good estate attorney before making that decision), but there’s no reason to be without an advance directive (living will) which will tell physicians under what circumstances to stop extraordinary lifesaving efforts.
Not for you, but for other folks in the same situation: If you have kids and you haven’t decided who you want to raise them in the event something happens to both you and their coparent (if applicable), this is probably the wakeup call to 1.) talk to the person(s) you want to take on that role and confirm they’re OK with it and 2.) get that put into your will. That also falls into the category of things all people should have (but most people don’t).
As to whether you should alter your spending habits….depends on your current financial situation, how your treatment would affect your work life, and what your insurance is? I could see it being anywhere from no impact whatsoever to being a massive lifechanging thing. My family’s had some experience with that, so I wish you all the best, travellin’ man, I sincerely do.
As someone who has been through this (my wife, who sadly passed away after an 18 year battle), I recommend that you start socking away as much cash into liquid investments (money market type accounts) as you possibly can.
When you beat the disease and get going again you can always invest the extra again.
Until then you need as much cash flow to help pay for treatments (alternative treatments are generally not covered by insurance) and if you need to be out of work for a while you will be OK. SImplify as much as possible.
Paul
I agree with Victoria — so many people say, “He has cancer”, which is only slightly more informative than saying “He has a virus.” Your prognosis will be affected both by the type of cancer you have and the stage in which it was caught. And that will affect the financial decisions you make.
Others have given more good financial advice than I could, so let me just say that, in this day and age, “I have cancer.” is not even close to synonymous with “I’m dying”, so don’t jump to conclusions.
This is a test comment. Rumor has it that comments are broken. I need to move to a dedicated server!
You do have income insurance don’t you? I think it’s one of the most important insurances to have (after home/ contents and car).
It doesn’t sound like you have a family to worry about taking care of or a lot of assets (I’m assuming that’s what all that school debt means). You might be fine with one of the simple will books, which your public library probably has a copy of. If you have a People’s Memorial in your area, that’s a great thing to join for cheaper funeral arrangements. But frankly, I’d recommend both of those things whether or not you get the diagnosis. Might as well be prepared.
As a healthcare professional, I have cared for patients who have been diagnosed with terminal cancer.I myself have had a recent melanoma scare that turned out to be benign. I believe it’s very important to have your financial house in order. But it is also important that you not lose sight of life’s “wake-up call”. When I read your list of concerns,I didnt see anything regarding emotional attachments, family ect. My advice is to hire a financial advisor and let him worry. You need to stop and be introspective as to why you got hit with this “cosmic two-by-four”.Cancer or not, this may be an oportunity to learn something about yourself and the people who love you.
The best advice I can provide has little to do with money and everything to do with your health. Use Word or Excel or even a large notepad to keep track of all of your medical appointments, doctor’s recommendations, and the results of medical tests. I had a very complex medical issue that resulted in visits to more than 20 doctors. In the doctor’s office you are likely to forget the details of your diagnosis and a detailed description of your medical history will make certain you don’t forget any vital information. You’d be surprised how quickly you forget things when scary men in white coats lean over you. After each appointment go home and append the document so that it’s as up to date as possible. Also if possible get your hands on each and every test result. Having the actual reports in hand is extremely helpful.
Lastly, if you feel close to someone ask them to come to as many of your medical appointments with you as possible. Originally my husband went with me for emotional support, but by the end he was answering the doctor’s questions and advocating for proper treatments. There can be a lot of red tape in the medical world and it helps to have someone fighting for you when you are fighting to survive.
JD - Thanks for highlighting this story. I think it is important for people in my (this/similar) situation to have additional information about their personal finances. In times when there is so much else to worry about, I don’t want to rely on the idea that “the money will work itself out.”
To all who have left advice, or stopped by my own blog and sent well-wishes, I also offer my thanks. It is amazing the outpouring of support from people who you don’t even know when times are tough.
I will have an update posted within the next day or so as to the next course of action. Disappointingly, my Thursday procedure did not settle much for me.
Nice post. I have to go for an endoscopy soon. I have been fearing the worst because I haven’t been feeling too well since my last couple of tests. It is comforting to see all the people that care out there. On behalf THE TRAVELIN’ MAN, thanks to everybody too!
Buy a telephone tape recorder. You’ll need it to tape your conversations with insurance companies. I’m not kidding.
More important (in my opinion) than a living will is a durable power of attorney. No one can sit around their kitchen table and know what they will choose when the tough decisions come.
I watched my wife suffer a stroke at 35; she was able to ask for a feeding tube, something she would almost certainly have rejected in a living will. You can’t know what you will choose. I think the best you can do is select someone who loves you (more important than your feelings about them) and tell them you want them to do their best. Of course you should discuss general wishes and desires.
Personally, I want my loved ones to take their best guess what I would want if I can’t decide for myself. I realize they might get it wrong, and I’m o.k. with that. I still think that’s a better bet than a living will.
Don’t pay any bill from anyone that hasn’t been fully processed by your insurance company, discounted appropriately, and had the insurance company pay their part. A hospital/clinic/etc. can be very helpful resolving bills with your insurance company, but they have no incentive to help you if you’re sending them money.
This doesn’t change if your bill goes to collections. Read the Fair Debt Collection Practices Act in that case, so you know your rights.
If you have a disease that will disable your ability to manage the disease, you’re going to have to find someone you trust.
And give them durable power of attorney (or living trust with them as a trustee).
Also you want a healthcare power of attorney that designates that person as health care agent (not just a living will)
We were very fortunate that mom had all that in place when she was diagnosed with dementia in her early 50s (her particular non-Alzheimer dementia usually hits in one’s late 40s/early 50s)
Well, we did set up the living trust after the diagnosis (the attorney makes the call as to whether or not the grantor is competent to do so)
I was set up as co-trustee on the trust (not successor), since we both knew she would not be able to make decisions in short order.
[...] Today I’d like to introduce you to The Travelin’ Man. He’s a frequent commenter on Lazy Man and Money and occasionally we’ll go into longer e-mail chains. Unfortunately, I received a recent e-mail from him that was a far different topic than any we’ve ever discussed. His doctor says that he might have bladder cancer.. You can read his original e-mail at Get Rich Slowly. [...]
Not a finance suggestion; however, if you have a cancer that is treated initially by surgery, have the best possible surgeon perform the operation.
I’m a seven year survivor of ovarian cancer. My surgeon was one of the best in the country, and I believe that played a huge role in my survival. I’ve met many women since that had less than optimal surgery, and they did not do well. Those that I have met with a good initial surgery seem to do much better.
It can be very difficult, if not impossible, for later care to make up for a botched initial surgery.
NCI-designated cancer centers are a good place to look for a qualified surgeon.
Once you have a diagnosis of cancer it is almost imposible to get health insurance…you will be considered uninsurable for some time…this can vary from company to company. SO…keep the health insurance you have…what is the out of pocket limit per year? That is the maximum you will have to pay each year…you will need to at least have that on hand in an emergency fund…if you have disability insurance keep it too…in fact don’t cancel any insurance that you might want in future…they can’t take it away from you when you get a cancer diagnosis, but if you cancel, you many not be able to replace it for a long time, if ever depending on the impact of the cancer on your health…
You should ideally have a 6 months emergency fund for living expenses….
As a fifteen year cancer survivor those would be my inital financial concerns…
Take the rest a day at a time…find out if in fact you do have cancer, get the probable diagnosis, and then make decisions concerning changing retirement investments,etc. You can always pause retirement contributions and just maintain those you already have and play catch-up later…at 39 you are young enough to get caught up…
Hope you do not have cancer, but if you do, it’s not the end of the world…death is inevitable, and once a person grasps that, it can change your perspective for the better….don’t make any important decisions in haste….