The Rise of Specialty Drugs: 5 Strategies to Avoid Costly Medical Expenses
By Aviva Abraham
With the rise of prescription drug costs, finding the right healthcare coverage is more important than ever. Life is unpredictable; you can get sick suddenly and find yourself financially burdened, especially if you are self-employed. Getting healthcare coverage today- the right coverage, can save you hundreds of thousands of dollars in the not so distant future. It can give you and your family peace of mind.
Last year Joan and her family moved into my neighborhood from Ottawa. Joan is a real estate lawyer, and set up her practice in North York. She is also a single mom with a young daughter. It took time for her to establish herself in busy Toronto, to make connections, and find new clients. Because finances were tight, she postponed getting a health plan. After all, she was healthy, and young. She figured she could get an insurance plan when she was financially stable.
Two months ago, Joan started feeling sluggish, kept getting headaches, and pains in her legs. For weeks her doctor couldn’t find the source of her symptoms, and she just kept getting worse. It got to a point where she couldn’t even work. Finally, a friend recommended a new doctor, who diagnosed her with vasculitis, a rare but fatal disease that attacks arteries and veins. The doctor told Joan that she needed to begin treatment immediately.
He recommended a new specialty drug called Rutuximab, not covered by OHIP.
It cost $20,000 for the first round of treatment. Joan had to dip into her savings and RRSP’s to pay for it. This health issue cost her a lot more than $20,000, between the stress of not having any income, losing some new clients, and having to scramble to get the money she needed for the medication. It would have cost a lot less, and she would have avoided a lot of financial stress, if only she had set up a health insurance plan.
- 6% of Canadians live with at least one major chronic disease, such as arthritis, asthma, diabetes, heart disease or a mental health issue.
- New specialty drugs can treat diseases faster and better, with fewer side effects than brand name drugs. But they are 10-30 times more expensive!
What would you do if you were in Joan’s shoes? What would you do if you or a family member needed thousands of dollars of drugs every month? Would you have the financial resources to deal with a health issue? Would your business survive that financial pressure? Making sure you have a comprehensive health insurance plan today will provide you with the money you need to deal with medical issues that arise. It means you can recover faster and more fully, so you can get back to work, and to earning money.
But there are so many plans out there, so much information, how do you know what plan is right for you?
Here are some strategies that will save you money today on existing medical expenses, and it will get you the healthcare coverage you need to protect your family for the future:
- Meet with a trusted, independent insurance advisor who deals with these situations every day. Although health insurance is offered by banks, credit cards, and other organizations, you need a specialist. You don’t go to a mechanic for root canal. It’s that simple. An independent insurance professional has more in depth product knowledge, knows about healthcare costs and can customize a plan to your specific needs. Your family’s and business health depends on it.
- Ask your advisor about the new health insurance plans. A lot has changed in the health insurance industry in the last few years. There are more options available for self-employed outside of traditional group benefit plans. It may surprise you to learn how affordable it is to get healthcare coverage. For example, for $250 a month Joan and her daughter could have been covered for up to $250,000 of drug, plus dental, hospital and travel insurance!
- Apply for critical illness insurance to provide a cash infusion should you be diagnosed with 1 of 25 critical conditions like cancer, stroke, heart attack, or Alzheimer’s. There are inexpensive ways to make sure you can get access to cash when you need it most. The younger you are when you apply, the cheaper the insurance. And you even have the option of getting all your premiums back if you never make a claim. A thirty-five-year-old female, in relatively good health, can get $100,000 of coverage for about $1 a day!
- If you are self-employed, set up a Health Spending Account (HSA) to pay for all of your unreimbursed medical expenses through your business. This includes braces, laser eye surgery, a nutritionist, a homeopath and any CRA approved medical expense; there are dozens of eligible medical expenses. If you are already paying these expenses, you can save approximately 30% on your existing medical costs simply by restructuring your medical expenses through your business!
- Need more convincing? Protect yourself with Catastrophic Drug Coverage. Some insurance companies provide an alternative solution, should you not want a full health insurance plan. You can apply for what is called Catastrophic Drug Coverage, which provides hundreds of thousands of dollars of drug coverage, if you satisfy a deductible (depending on the insurance provider, between $2,500-$5,000), and if you are relatively healthy today. For approximately $22 a month our thirty-five- year- old female mentioned above could have $250,000 of drug coverage should he require medication in the future for a serious health issue. Considering the fact that over 50% of Canadians will need thousands of dollars in medication in the next few years, this is another cost effective way to protect your finances.
Talking about getting sick isn’t easy. But it’s necessary in our world of rising healthcare costs. There are affordable solutions for today’s self-employed professionals, so don’t wait until you are sick. Make healthcare part of your business plan today!
Aviva Abraham is a group benefits and insurance advisor at Creative Planning. Aviva started her career as a CPA in New York City, before moving to Toronto with her husband and family. In 2010 Aviva switched careers and joined Creative Planning Financial Group, specializing in providing healthcare solutions for self-employed and small business owners. You can reach her at firstname.lastname@example.org or 416-545-5310.
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