by Brian Swerdlow
Anchor Financial
Greater numbers of hospitals are closing across the United States, especially in rural areas.
With all that’s going on in the world right now, you may have missed a quiet but growing crisis that’s affecting seniors, especially those living outside large cities.
For the last several years, a number of smaller hospitals across the United States have closed their doors, posing a grave concern, especially for older adults who heavily rely on accessible healthcare services. As hospitals shutter, the repercussions extend beyond mere inconveniences; they threaten the very fabric of healthcare accessibility and exacerbate existing disparities, leaving older Americans particularly vulnerable.
Hospital closures negatively impact older Americans.
When a local hospital or other healthcare facility closes, the closure strikes a devastating blow to older adults. Many seniors view their health institutions as not just medical facilities but also as community anchors. The loss of community-based healthcare services leaves many seniors and underserved individuals feeling abandoned and fearful. This situation comes at a time when older people most need a sense of security and well-being. Closures also mean a loss in terms of access to health education. Many rural hospitals sponsor free classes for their communities, guiding them in areas such as weight management, diet, exercise, and other critical healthcare subjects. The loss of access to such vital information is a blow to retirees who want to stay healthy and age in place or learn to cope with serious illnesses.
Hospital closures create more barriers to access.
With hospitals closing their doors, older adults face daunting challenges in accessing essential medical care. If they can’t get treated locally, these seniors must travel long distances to alternative facilities in other towns, perhaps even in different states. This kind of situation presents logistical and financial hurdles, particularly for those with limited mobility or resources. Socioeconomic factors further exacerbate these barriers, with increased costs for transportation, lodging, and meals adding strain to already tight budgets.
Greater negative health outcomes
The repercussions of diminished healthcare access are dire for everyone, but especially for older adults. Primary preventive care, such as screening tests, becomes challenging to obtain, leading to delayed diagnoses and advanced disease progression. Hospital closures also restrict access to specialized medical services, creating more disparities in care and compromising health outcomes. If seniors have to travel far, they may not get the care they need, which in turn will lead to diminished health outcomes.
Rural and suburban areas are at risk.
Rural areas bear the brunt of hospital closures, amplifying the challenges faced by retirees. Financial constraints, coupled with difficulties in recruiting healthcare practitioners, along with declining populations, contribute to the closure of rural hospitals. When these institutions vanish, rural communities are left grappling with crisis-oriented care and heightened healthcare needs.
Different states are affected differently.
The impact of hospital closures varies across states, with certain regions experiencing disproportionate challenges. States such as Texas, Tennessee, and North Carolina have witnessed a significant number of rural hospital closures, underscoring the urgent need to address healthcare disparities at both local and national levels. The COVID-19 pandemic did a lot to exacerbate these vulnerabilities, further imperiling rural healthcare infrastructure.
Policymakers need to address the crisis before it’s too late.
Policymakers must acknowledge the critical role of hospitals in rural communities and take proactive measures to preserve healthcare infrastructure. Beyond providing medical services, hospitals serve as economic drivers and community pillars, embodying the essence of rural life. Efforts to reduce the number of closures and enhance healthcare access for older adults are imperative.
Some potential financial solutions if your hospital closes.
As more hospitals go out of business, getting the medical treatment they need becomes a daunting prospect for many individuals, especially older adults. While planning for your healthcare needs, including long-term care, is always a wise idea at any age, if you live outside a metropolitan area, it’s even more crucial. Medicare, while a fantastic benefit, won’t pay for everything or come through in every situation. It would help if you always had a Plan B ready to go when things go sideways with your health.
Fortunately, there are financial avenues available to help you offset increased healthcare costs associated with hospital closures and other adverse situations. Two viable options might include either selling a life insurance policy you no longer need for cash or leveraging the living benefits within a permanent life insurance policy you own. While these solutions offer avenues to alleviate financial burdens, you should consult a professional and carefully consider the associated pros and cons. A competent financial advisor will always include space in your retirement blueprint for dealing with the most expensive cost in retirement- healthcare.
Here are two popular tools for financing your healthcare.
As I mentioned, traveling further from home to get primary or specialized treatments is a frustrating, time-consuming, and expensive reality for many individuals whose local medical facilities have closed. Fortunately, there are some financial avenues available to help alleviate the burden of additional expenses incurred from traveling for healthcare.
Here are two things you might do.
- You might be able to sell a life insurance policy you no longer need.
Life insurance is a valuable financial asset, protecting your loved ones in the event of your passing. However, in times of extraordinary financial need, such as experiencing a disability, losing a job, or outrageous expenses arising from a hospital closure, your life insurance policy can offer a lifeline.
How It Works: Selling your life insurance policy involves transferring ownership to a third party. That third party then gives you a lump sum cash payout. You can use this payout to cover outstanding medical expenses and other financial obligations.
Benefits:
- Immediate Cash: This option gives you a lump sum cash payout to address pressing financial needs.
- Debt Relief: Selling a policy may alleviate the burden of medical expenses and other debts, ensuring financial stability for your loved ones.
Drawbacks:
- Reduced Coverage: Selling your policy diminishes or eliminates your life insurance coverage. This loss of coverage may leave you without security for the future. You should never sell an insurance policy without discussing it with your financial advisor.
- Tax Implications: When you sell your policy, beware of potential tax liabilities. Always consult a tax expert who can help you understand how any taxes will impact you.
- When you have permanent insurance, you can often borrow against the cash value.
Many permanent life insurance policies include living benefits that let policyholders access a portion of their death benefit while still alive. This powerful feature can help you avoid financial hardship. Depending on the design of your policy, you can use a portion of the cash in your account to cover expenses. This benefit keeps you from having to liquidate some of your other, less liquid retirement or investment accounts.
How It Works: Borrowing against the cash value of your permanent life insurance policy entails accessing funds that have accumulated within the policy over time. This policy loan generally has few restrictions and may be used to cover medical bills and other expenses.
Benefits:
- Quick access to funds: When you borrow from your permanent life insurance policy, you won’t need to wait for a lengthy “approval” process or a credit check. You’ll simply request a loan. Many insurers will let you do the entire process online, making it even faster and more efficient.
- You have flexibility. When you borrow from your customized permanent life insurance account, the insurance company does not restrict you from using the money for any of your needs, not just for medical issues.
Drawbacks:
- Reduced Death Benefit: Borrowing against your policy reduces the death benefit, potentially impacting your beneficiaries.
- Premium Adjustments: In certain instances, borrowing against your policy may lead to adjustments in your premium payments.
Conclusion
Hospital closures are occurring in large numbers, primarily in rural areas. However, experts believe that larger cities will also see an uptick in closures in the near future.
If you are at or near retirement, you must prepare for the financial challenges posed by hospital and clinic closures, carefully considering all available options. Some of those options include selling your life insurance policy or borrowing against its cash value, either of which could provide much-needed financial relief during times of uncertainty.
By proactively addressing financial concerns, you can ensure you always have essential medical services and maintain economic stability. Closures can be financially and emotionally devastating, but planning can help soften the blow, especially for those who want to retire with greater security and less stress.
I am always happy to help pre-retirees and retirees evaluate and assess their current portfolios and adapt them to evolving financial circumstances. If you’d like a second set of eyes to help you gain long-term financial security and peace of mind in retirement, contact me today.
https://www.anchorfinadv.com/index.html#contact or call (847) 604-0090
Find Brian on Linked In:linkedin.com/in/brian-swerdlow-141a238
Anchor Financial Advisors Website: anchorfinadv.com
