Hidden Financial Costs of Special Needs

Hidden Financial Costs of Special Needs

The Hidden Financial Costs of Having a Child with Special Needs: Part One

Last year my daughter's out-of-pocket medical costs were more than $200,000. Yes, you read that right. Fortunately, supplemental Medicaid picked up a good chunk of that, but we still ended up paying thousands of dollars toward her care. How is it that a child with both private insurance and secondary Medicaid can still manage to have so many uncovered costs? There are many, many hidden financial costs of parenting a child with special needs, and families tend to experience three types of expenses: higher health care costs, higher routine care costs, and reduced employment income.

Higher health care costs occur primarily due to massive underinsurance in the United States. Insurance plans simply do not cover many of the items required by children with complex medical needs. Diapers, over-the-counter medicines, special formulas, nursing care, and adaptive equipment are just a few of the things that may not be covered. Even though insurance typically covers durable medical equipment, we have found that many items have been denied as “items of convenience,” including specialized car seats, bath chairs, lifts, strollers, positioning chairs, and assistive technology items. Specialized therapies, care at a distant specialized medical center, alternative care, and private educational assessments are among other expenses not usually covered by insurance. If these items are reimbursed, they are often considered out-of-network, and may be reimbursed at a lower rate, if at all.   

In addition, families pay an average of 10% of medical costs covered by insurance in the form of deductibles, copays, and coinsurance. It is not uncommon for families to pay as much as $1000 per month on medication copays alone, and $200 a month or more on doctor and therapy copays, in addition to high deductibles and coinsurance amounts.  

Routine costs, such as choosing accessible housing, home modifications, specialized transportation vehicles, specialized day care services, and increased utility bills due to medical equipment, are also significant expenses for many families. Everything--and I mean everything--associated with special needs is unbelievably expensive. On a day-to-day basis, the average family will pay as much as two or three times the cost of typical items for adapted clothing, toys, and other specialty products. For example, the regular baby Bumbo chair is about $40, while the special needs version runs $200. Other out-of-pocket expenses like gas for driving to and from appointments, travel for specialized medical care, and high utility bills from running oxygen concentrators and other medical devices drive the costs into the thousands. Upgrading electricity for medical equipment, renovating a bedroom or bathroom, and purchasing a wheelchair van for transportation can easily run $10,000 or more.

Reduced employment income also has a dramatic influence on a family's financial situation. In one study, a parent in 54% of families was forced to quit a job to care for a child with special needs. Many parents cannot find suitable childcare services to meet the medical needs of their children, thereby forcing them to quit their jobs. Parents also may be unable to work full time or at all, since caring for a child with special needs is so time consuming. As in most families, I spend hours each day as my daughter's nurse, physical therapist, equipment repairer, secretary, scheduler, and medical researcher.  

Underemployment is another issue, since parents often feel obligated to choose jobs with better benefit packages or flexible hours over higher-paying positions. Some families are "forced poor," meaning they intentionally reduce their income or work hours to qualify for Medicaid. Even those parents who are able to work typically suffer a loss in productivity.  Many miss days of work or pay when a child is sick, when a child's nurse does not show up, or when emergencies and hospital stays occur. Many parents will even end up being fired due to frequently missed work.

According to the Catalyst Center, 13% of medical-related bankruptcies are directly related to caring for a child with complex medical needs. With family incomes reduced an average of nine percent, out-of-pocket costs that average tens of thousands of dollars per year, and increased costs in almost every aspect of daily life, it is almost impossible for many families to survive.  

There are, however, many steps you can take to maximize your family's benefits, reduce expenses, save for the future, and obtain additional funding. The second part of this series will discuss strategies to improve your financial situation despite the overwhelming costs you may be facing.

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Written by: Susan Agrawal See other articles by Susan Agrawal
About the Author:

Susan Agrawal happily parents three kids, including a child with complex medical needs. She is an editor and writer for Complex Child E-Magazine.

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