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The What Ifs: Planning for long-term medical challenges

Tips to help you stay ahead of the health care curve

As a family practice doctor, Megan Mendez sees it all the time: When a primary caregiver experiences a major health event, it leaves families—particularly the person with a chronic illness needing care—financially unprepared.

Mendez's father, who is also a family physician, has Parkinson's disease, and is declining steadily. The family is focusing on financial preparedness: Over the past several years, father and daughter have downsized his workload, with Mendez taking on many of his patients. Mendez and her husband are also adding a wing to their home to accommodate her parents.

Why a contingency plan is crucial

Financial preparedness isn't just for the newly diagnosed. Even people without a health issue such as Parkinson's disease, cancer, or Amyotrophic Lateral Sclerosis (ALS) should consider the "what ifs," as some long-term illnesses develop quickly and can be costly. That's key advice from Dr. Ted Kowalski, JPMorgan Chase's head physician and managing director of health services. JPMorgan Chase has supported technology for the Team Gleason House for Innovative Living, which was established by former New Orleans Saints player Steve Gleason. Gleason's struggle with ALS is the subject of a new documentary, and is driving new awareness about the costs of long-term illnesses. Steve decided to get a tracheotomy surgery which allows a ventilator to artificially breathe for him. Although this procedure can extend ALS patients' lives for many years, an estimated 95% of all people diagnosed with ALS, choose to not have a tracheotomy because of the extraordinary expense and the level of care required.

A few months ago, Mendez's mother was diagnosed with breast cancer.

"My father was banking on my mother to be his primary caregiver," Mendez explains. "But even as he's wrestled with his own diagnosis, he's had to step it up and be caregiver for a bit."

Another complication: Following diagnosis, the long-term aspect of a chronic illness doesn't always guarantee time to adequately prepare as symptoms and the way they impact daily life can change quickly and unexpectedly. "Most of us think we're going to have more time between diagnosis and progression to a point of significant financial impact," Dr. Kowalski says.

Also, people are living longer with chronic illness. "Plan for 15 to 20 years, not just five to 10," Mendez recommends. With that in mind, don't just plan around the needs of the individual with the long-term diagnosis, he says. Consider the caregiver, and create a contingency plan for that key person.

Sarah Bratt and her husband Michael are planning for 20 years—and beyond. Sarah is in her mid-30s and has Crohn's disease, a chronic illness that has already required multiple surgeries. Her husband, Michael, is also in his 30s, has the gene for Huntington's disease, a progressive and fatal genetic disorder affecting muscle coordination.

The Bratts have a life insurance plan. "Other than that, we are just planning on Michael retiring in his late 50s so we can have a few 'retirement years' together before he gets too sick," Sarah says.

From diagnosis to daily care

After Dale C. Carter's mother was diagnosed with stage 4 colon cancer on her 80th birthday, she—as the only daughter and primary caregiver—took decisive action. "My first immediate step was to seek out a geriatric care manager to be my surrogate, coordinate mom's care and be an advocate for me," says Carter, one of nearly 34 million Americans who provided unpaid care to an older adult in the past year.

As her mother's executor, Carter quickly reviewed and updated the legal documents detailing her mother's financial accounts, particularly how to handle each one after her passing.

Just a few months after her mother's diagnosis, Carter's 68-year-old husband retired. Several months later, he was diagnosed with Lewy Body disease and dementia, which affects the regions of the brain tasked with thinking, memory and motor control.

Once again, Carter, the primary caregiver, moved forward promptly, with her and her husband's present and future needs in mind.

Due diligence decision-making

Carter significantly reduced her full-time workload to meet her husband's changing needs and the occasional health crisis. But she is aware of a heartbreaking reality: "At some point, I may be unable to care for him and a 24/7 caregiver care may be cost-prohibitive," Carter says.

To navigate this uncertainty, Carter enlisted the help of both her attorney and a financial consultant. "The attorney told me the laws of Indiana with regard to Medicaid. He explained which assets I would be allowed to keep and advised me from his perspective," she explains. She signed a special Power of Attorney (POA) form giving her access to her husband's IRA, and she is a joint holder on all his bank accounts (her son also has POA). "I also established a checking account, savings account and credit card in my name alone. I keep my funds separate, planning for whatever the future holds."

Planning expands possibilities

Although the conventional "saving for a rainy day" advice is most likely an untenable target when dealing with the unpredictable nature of long-term illness, having a plan is still critical, says Michael Guerrero, co-founder and benefits adviser for Elder Care Resource Planning, an organization based in San Francisco.

"Financial planning is really just a tool to help people achieve their goals, and long-term care planning is no different," says Guerrero. "We focus on understanding goals, the desired living arrangements and the level of care—now and into the future. We aim to expand the range of possibilities in hopes that we may help families to discover better options."

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