Want to know what a catastrophic injury will really cost over a lifetime?
No-one thinks about it. Once you leave the hospital the bills continue to pile up. They can come for years, even decades.
Here’s the problem:
Insurance companies want to settle your life changing injury claim quickly. Quick settlements typically mean small settlements. They take care of bills today, but not tomorrow’s care.
And tomorrow’s care is where the real costs are hiding.
The good news? Lifetime care costs can be calculated. There is a formula for it, and when you learn it you will know precisely what you should be asking for.
Inside this guide:
- What Counts As A Catastrophic Injury?
- Why Future Damages Matter So Much
- How Lifetime Care Costs Are Calculated
- Dealing With Insurance Companies The Right Way
What Counts As A Catastrophic Injury?
The definition of a catastrophic injury is an injury that permanently alters your life. Catastrophic injuries can prevent you from working, living independently, or performing daily tasks.
Common examples include:
- Spinal cord injuries
- Traumatic brain injuries
- Amputations
- Severe burns
Far more people suffer from these injuries than you would expect. There are about 18,000 new spinal cord injuries per year in the United States.
Why Future Damages Matter So Much
Future damages refer to expenses you will incur following the resolution of your case. This may include medical expenses, homemaking services, equipment, and lost wages.
Why should you care? Well, when you sign a settlement, that’s final. You can’t come back five years later and say you want more money.
One signature = one payment for life.
Think about it:
If you accept too little, you (or your family) will have to make up the difference. And with catastrophic injuries, that difference can be enormous.
Think spinal cord injuries for instance. Healthcare expenses for someone with high tetraplegia totals nearly $1.4 million just during the first year. Someone who becomes injured at age 25 can face over $6 million in costs over a lifetime.
And that doesn’t even include lost wages!
That’s why you want knowledgeable people fighting for you when you negotiate with insurance companies about future damages. Personal injury lawyers like The Law Offices of Max G. Arnold know how insurance companies lowball long-term care costs…and how to counter realistic numbers that will stand up.
How Lifetime Care Costs Are Calculated
So how do experts actually come up with these numbers?
Basically it all comes down to this. They calculate the care needed, the cost and how long for.
It really is that simple. Here’s how it works…
Step 1: Build A Life Care Plan
A life care plan spells out every type of care the injured person will require. Typically prepared by a nurse or medical professional known as a life care planner.
The plan covers things like:
- Doctor visits and therapy
- Medication
- Wheelchairs and medical equipment
- Home changes like ramps and wider doors
- Daily help from a caregiver
Everything is included. Small costs mount up very quickly over a 30 or 40-year period. That $50 per month supply bill totals $24,000 over 40 years… and that’s with NO inflation.
Step 2: Put A Price On Each Item
Then each item is priced. Specialists determine how much that care would cost in the patient’s geographic region.
Some of these expenses are astronomical. Take private nursing home rooms, currently running $129,575 per year. Multiply that by the number of years you require that level of care… and you start to see how high it can get.
Step 3: Work Out Life Expectancy
How long will care be needed? It depends on the age and health of the person after injury.
Life expectancy is calculated by actuaries using medical data. The younger you are the longer you will likely need care, resulting in a larger total. Insurance companies always want to use a shorter life expectancy. Every year that they can eliminate lowers your total.
Step 4: Adjust For Inflation And Today’s Value
Healthcare costs rise nearly every year. Therefore statisticians inflate values to account for price increases.
But here’s the thing…
The payments are made usually today, all at once. Therefore an economist calculates the “present value.” Meaning how much money you would need today to meet all those future payments as they are incurred.
Pretty clever, right?
Step 5: Add Lost Earning Power
Lastly, loss of income is calculated on top of everything else. Say your injury prevents you from working. You will miss out on wages, raises and benefits for the remainder of your career. This can equal hundreds of thousands for a younger employee’s claim.
Dealing With Insurance Companies The Right Way
Here’s the truth: insurance companies are not on your side.
Their goal is to pay you as little money as possible. When negotiating with insurance companies after a catastrophic injury, it’s good to know what to expect.
Watch out for these common tactics:
- Quick settlement offers made before the full cost of care is known
- Questions designed to make you downplay your injury
- Claims that you won’t need much future care
- Swapping in cheaper care options than your doctors recommend
So what should you do?
Never settle until you understand your lifetime costs. Save every medical bill, receipt and record. Document how your injury affects your everyday life, no matter how small. Notes such as “needed help getting dressed” or “missed a child’s game due to pain” paint a picture of your injury.
And most importantly of all… Make sure you have experts standing behind your claim. Life care plans and economist’s reports remove conjecture and replace it with hard figures.
Insurers find it much harder to argue with hard numbers.
Putting It All Together
Traumatic injuries do not just impact one year of your life. They impact every year after that as well. For this reason future damages usually make up the majority of any injury claim.
To quickly recap:
- Build a full life care plan
- Price every item of care
- Estimate how long care will be needed
- Adjust for inflation and present value
- Add lost earning power
- Stay alert when dealing with insurance companies
Follow these steps and you’ll have the best opportunity to secure a settlement that truly meets your future needs. After all, when your future depends on a lifetime of care… estimates just won’t cut it.
