Susan's Scoop

Will healthcare costs wipe out your wealth?

If you’re starting to get grey hair and achy knees like me, the news that “Dawson” (James Van Der Beek) passed away recently after his cancer battle may have hit you especially hard. But the controversy that followed was even sadder; his wife had to start a GoFundMe to raise funds to pay off their medical debts and support their 6 children, despite his fame and success.

This got me to thinking – if they had stayed in California rather than moving to Texas during the pandemic, would they still have faced medical bankruptcy? (California has significantly better healthcare coverage than Texas.) And since healthcare costs are the #1 cause of bankruptcy in the US, does your potential for bankruptcy directly correlate to the level of healthcare coverage in your state?

This is particularly disturbing to me because I also live in Texas, and we have had a terrible time with the health insurance options here. Right now we are on a marketplace plan with United Healthcare (UHC) with an $1800/month premium, and so far this year they haven’t covered any of our medical expenses. Our family doctor dropped UHC after we had already selected the plan, so without a ‘referral’ from an in-network doctor, nothing is covered. And my son got injured while skiing in Colorado, but our plan covers nothing out-of-state, so that was all self-pay for us also. Unfortunately none of these expenses even count towards our deductible because they are considered “out-of-network”.

So could Dawson’s fate also be our fate if one of us gets sick here in Texas? The living spouse left to beg for money while our nest egg gets swallowed by a greedy and unforgiving healthcare system? I don’t have an answer, but it’s definitely something I’m thinking a lot about. And unlike Dawson, I don’t have a bunch of rich celebrity friends or nostalgic fans to fill up the coffers of my GoFundMe. Very depressing indeed!

Out of curiosity, I did some research on which states offer the best health insurance coverage, and here’s a nifty chart by healthcare insider:

As expected, Texas does not rank well.

But instead of spiraling into despair, I’m asking a better question:

If something happened tomorrow and medical bills piled up, would our financial plan hold?

If you’re thinking about this too, here are a few things you can do this week:

• Look up your plan’s true out-of-pocket max (not just the deductible)
• Confirm whether your primary doctor and nearest hospital are actually in-network
• Build (or rebuild) a 6-12 month emergency fund
• Review your disability and life insurance
• Understand your state’s homestead and bankruptcy protections
• Build community. Maybe with rich people just in case.

What I'm Reading

📕 Healthcare Options and Money-Saving Healthcare Hacks​

A shameless plug for a my article a couple of months ago on where to find healthcare coverage and some tricks to save money on procedures, prescriptions, dental care, and labwork.

When You're Ready, Here's How We Can Help

Wealth By Design

If you want to learn more about saving and investing strategies, be held accountable, have your questions answered, and get clear on your unique wealth plan, Wealth By Design might be just what you need.

Free Strategy Session

If you have questions, but you're not sure where to start, let's have a free call. Our free strategy session gives you the chance to share where you're stuck or curious, so we can guide you through some of your best options.