Strategies for Handling Care Costs
Written by Sarah Watts
Photograph by David Franklin/Getty Images
A diagnosis of Parkinson’s disease will inevitably raise questions about the future. But how you’ll manage to pay existing bills while also managing PD-related care costs doesn’t have to be one of them.
In fact, there are quite a few resources that you or a loved one with PD can use to offset care costs and stretch your budget, once you talk with your doctor and family about how symptoms will likely progress.
Kathleen Campbell, president of Campbell Financial Partners LLC, has worked with retirees who have chronic conditions. Her advice to families of people who are newly diagnosed? Start having conversations with your children and partner as soon as you get the news. “Parkinson’s is progressive, and nobody knows what the future will hold,” says Campbell. “So let’s start talking. If you’re older, do you want to stay in your house? To what degree will you need assisting living, and who will be your caregiver?” she says, adding that addressing these questions now can take the stress out of decision-making and free you up to enjoy life.
The following are some strategies you may consider to help you plan:
Open an HSA
For couples with high-deductible health insurance plans, a Health Savings Account (HSA) may be a smart way to save on taxes. “An HSA allows you to accumulate funds and withdraw anytime you want for health purposes,” says Ira Fateman, a certified financial planner and teacher at San Francisco State University. “You don’t have to pay taxes when the money comes out, if you’re using the funds for health-related expenses, and you can use it for any qualified expenses, including long-term care, insurance premiums or assisted living.” Furthermore, you can deduct the amount you contribute to an HSA on your tax return. A Health Savings Account must be linked to a qualifying, high-deductible plan. For your current plan to qualify, for instance, your deductible would have to be at least $2,600 for family coverage or $1,300 if the plan covers you alone. To check your eligibility and get help setting up an HSA, contact your employer’s human resources department or a local bank.
Apply for SSDI Benefits
If clients can no longer work, Fateman advises them to apply for Social Security Disability Insurance or SSDI. People who have paid into the Social Security system and qualify as disabled under Social Security guidelines are eligible.
Meanwhile, carefully consider when to take your regular Social Security retirement benefits. “The way the Social Security system is structured right now, you lose a substantial amount of benefits if you file before full retirement age, which is 66 for most people,” Campbell says. Filing at 62, for example, will reduce your monthly benefits by about 30 percent.
One upside: According to the National Institutes of Health, the average age of diagnosis for Parkinson’s is 60, with five to 10 percent of patients diagnosed before age 50. In other words, most Americans are still working when they’re diagnosed.
“If you can keep working, that’s a great thing in all regards,” says Fateman. “Financially, it will give you time to prepare a budget and provide cash flow.”
Tap Retirement Savings
For most, retirement vehicles like traditional and Roth IRAs get used to supplement retirement costs after the age of 59 1/2. But drawing on these funds can be helpful for Parkinson’s-affected families as well.
“An IRA provides a minimum safety net if you’re diagnosed,” says Fateman. Once a client meets the IRS qualifications of disability, they can start to withdraw money from their traditional and Roth IRA accounts without penalty, regardless of age. Just be aware that you must still pay income tax on the amount withdrawn from a traditional IRA.
Consider a Reverse Mortgage
For couples who need extra income, reverse mortgages can be a “definite resource for people with Parkinson’s,” Fateman says. “Reverse mortgages can enable a client to stay in their home and solve a cash flow problem,” by tapping the equity in the property.
Not everyone qualifies for a reverse mortgage, however. Applicants must be at least 62 years old and live in the home as a primary resident, according to the U.S. Department of Housing and Urban Development. Fateman recommends consulting a qualified reverse mortgage counselor to find out if you’re eligible.
No matter what your circumstances are, communicating openly is the best way to make a plan.
Your Pocketful of Resources
Save this quick list of websites and services to get you started:
- Find a Planner: The National Association of Personal Financial Advisors provides a directory of certified financial planners at napfa.org.
- Research Options: Find information on Medicaid, reverse mortgages and more at aarp.org.
- Get Help Paying for Meds: RxAssist is a site that provides links to patient assistance programs for help with prescription costs. VisitRxassist.org.
Originally printed in MoreThanMotion, June 2016.