“Dear Steve,
We are a middle class family ($75000 annual income) with some savings, 401k, health retirement account, health insurance, and a mortgage of $110,000. We own our old cars and don’t have anyother debt currently. However, our son, who is a toddler, has several birth defects due to a serious medical condition. We found out he will might need a bone marrow transplant and/or a kidney transplant along with other cancer risks and surgeries to the birth defects.
Insurance will not cover all of these expenses. We are seeking treatment but it is across the country from where we live. We don’t know when the big hurdles (transplants) will need to be done–it could be months or years, hopefully never. We are in our forties so we need to plan for our future as well as his.
Is there planning that we should be doing to alleviate the financial disaster ahead? We are in Idaho and need guidance of how to handle the upcoming medical bills and expenses to treat our son.
Tena”
Dear Tena,
Well that’s a very difficult situation and I can see the train heading your direction.
I think the reality is you are going to need to plan now for a future bankruptcy. That is unless you can find a health insurance policy that will cover your child for these future expenses without an exclusion for a pre-existing condition.
The government actually has an awesome website to find coverage at HealthCare.gov. I would first suggest you see if you can find coverage going that route. What you are looking for is probably coverage through state high risk pools or pre-existing condition insurance plans. According to the latest numbers from Idaho a policy for your toddler would be $278 per month for a policy with a $1,000,000 limit and a $10,000 out of pocket maximum. See this page for details.
Without the insurance coverage your options are few and inevitable. It is unlikely you are going to sit by and just allow your child to die in your arms so let me be a realist for a moment.
Without insurance to cover the expenses, the cost of the medical care will be beyond your reach and will leave you paying for it for the rest of your lives. This will probably leave you unable to save for your own future care. If you don’t protect yourselves first, nobody will later.
So the reality is you probably need to put as much money now into your 401(k) or retirement plan now. That money will grow to protect you when YOU need it most and it will be off limits from creditors when the medical bills overwhelm you and land you in bankruptcy.
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