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October 02, 2021

How would getting sick affect you financially?

Health care costs are top of mind these days as the U.S. government continues to squabble over just what ObamaCare will eventually look like and how it's supposed to protect more Americans from being bankrupted by overwhelming medical bills.

Of course, unlike our cousins across the border, Canadians aren’t supposed to get into financial trouble when they fall sick. But, according to one recent study, we do – repeatedly, it seems.

Among Canadians who have received a serious health diagnosis, or who have lived through a major accident, 40% admit that the aftermath caused them some degree of “financial hardship.”

What’s worse, more than half of those who’ve had a serious health event described at least one financial consequence. The list ranges from reduced savings (22%) to increased credit card or line of credit debt (22%) and even being forced to remortgage or sell the family home (5%).

The common denominator? Almost three quarters of those polled said they had no private health insurance at all. Despite this, 81% admitted they had no money set aside specifically for medical expenses.

That could be a problem since, over the past 12 months, Canadians spent an average of $1,354 on medical or health care services. And while that may not seem like much, that average may be a bit misleading. 

Medicare doesn't cover everything, particularly when it comes to drug costs. While the cost of basic drugs to control such things as blood pressure and cholesterol levels may be manageable, the skyrocketing cost of new biologic and specialty drugs can be significant.

The average annual cost of those drugs per person is $15,000 a year, compared to $525 a year for maintenance drugs, according to some estimates, and a single prescription costs more than $2,200 on average.

That can be a lot to handle. The result was that 39% of those who have lived through a major illness or accident say they've experienced a significant change in their lifestyle: 19% ended up working less; 17% quit their jobs; 14% retired earlier than planned; and 6% ended up postponing their retirement.

Has a medical issue set you back severely? How long did it take for your finances to recover? Or are you still trying to get back on your feet? 

By Gordon Powers, MSN Money



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Gordon PowersGordon Powers

A long-time fund company executive, Gordon Powers now heads up the Affinity Group, a financial services consulting firm. Gordon was a personal finance columnist for the Globe & Mail for many years, has taught retirement planning...