Advance Planning & Glossary

Advance planning

An advance directive (or living will) is a written document stating what medical care you do and don't want if you can't speak for yourself — life support, resuscitation, feeding tubes. It's not just an "elderly people" document. Accidents and sudden medical events happen at any age, and without one, the decision falls to family or default hospital protocol, not your actual wishes.

A healthcare power of attorney names a specific person to make medical decisions for you if you can't. It's different from a financial power of attorney; you can have both, held by different people if that makes sense for your situation.

Both are simple, often free to set up (many hospitals and attorneys provide free templates), and worth doing well before they feel urgent — same logic as the revocable trust in the Money guide.

Code blue: know the language, set realistic expectations

People need to know that a code blue situation rarely has a good outcome. Normally, coding someone past a certain point is too much and borders on abuse — but as medical people, we can't tell you to stop until it becomes beating a dead horse.

I'm not going to tell anyone to make themselves DNR. But definitely understand the language, and have realistic expectations going in when you or a loved one is staring down a bad situation.

Where this overlaps with money

• HSA (Health Savings Account) — triple tax-advantaged if you have a high-deductible health plan: contributions are pre-tax, growth is tax-free, and withdrawals for qualified medical expenses are tax-free.
• FSA (Flexible Spending Account) — pre-tax medical spending, but generally "use it or lose it" each year, unlike an HSA, which rolls over and can even function as a retirement account after 65.

Glossary

• Advance directive — Written instructions for your medical care if you can't speak for yourself.
• Chargemaster — A hospital's internal list price. Inflated, rarely what insurers or negotiators actually pay.
• Coinsurance — The percentage of a cost you pay after your deductible, until you hit your out-of-pocket max.
• Copay — A flat fee per visit or service, set by your plan.
• Deductible — The amount you pay out-of-pocket before insurance starts covering costs.
• EOB (Explanation of Benefits) — Insurance's breakdown of what was billed, covered, and owed. Not a bill itself.
• FSA (Flexible Spending Account) — Pre-tax medical spending account, generally use-it-or-lose-it each year.
• Healthcare power of attorney — Names a person to make medical decisions for you if you're unable to.
• HSA (Health Savings Account) — Triple tax-advantaged medical savings account, available with high-deductible health plans, rolls over year to year.
• In-network / out-of-network — Whether a provider has a negotiated rate with your insurer. Out-of-network can mean full, un-negotiated billing.
• Out-of-pocket max — The most you'll pay in a year before insurance covers 100% of costs.
• Premium — The amount you pay (usually monthly) just to have insurance, regardless of use.
• Triage — The process of prioritizing patients by the severity and urgency of their condition.