The Business Rusch: Life-Changing Events
Before I start this blog post, let me thank everyone who contacted me in one way or another over last week’s blog. I can’t tell you how grateful I am for the response. Since I was teaching, I was unable to respond to the comments, but I did read all of them. And now I’m a bit overwhelmed by the sheer number of them to even know where to begin. (I’m still behind on my e-mail from last week, let alone writing or blog comment responses.
If you haven’t read the comments, please do so. My experience wasn’t unique. There are a lot of us who have been through this kind of darkness for a variety of reasons.
I’m tired this week, so I’m going to go in a different direction here. Next week, I’ll be back on track and I’ll try to be a bit more global-centered than some of my last posts have been, given that the post will appear on the US national holiday, the Fourth of July.
And now on to your regularly scheduled blog post.
Recently, David Farland did all writers a favor by blogging about the terrible direction his life has just moved toward. Not only has his sixteen-year-old son been horribly injured in an accident, an accident so serious that for days the doctors expected him to die, but Dave’s family has no health insurance. (Dave’s son has improved but as I post this is in intensive rehab. The family still needs a lot of help, and you can find out how you can contribute (or buy a book!) here.)
I know most of you Canadians and Europeans check out when American bloggers start talking about health insurance. You’re covered, and wow, do I envy that. Yes, I know, you have complaints as well, but what Dave described in his blog cannot happen to you. And frankly, it should not happen to a successful professional in the richest country in the world, either.
Stick with me, readers from outside the US. I promise I’ll get to something that does have an impact on you, long before the end of this blog.
When I found out that Dave, of all people, had no health insurance, I was stunned. Dave is not just one of the best writers I know, he’s also one of the best businessmen I know. Surely, I thought, he should know the risks of going without insurance.
Actually, he knew them better than I did.
I’m linking to his blog. Please go read it now. It’s short.
For those of you too lazy to click on the link, here’s the situation in a nutshell. Dave and his family had insurance. They had purchased the best insurance they could for a freelancer, back when they lived in California.
Dave’s daughter had a health crisis in 2004, and Dave and his wife spent an extra $40,000 to make sure she had the right care. Then the insurance company denied her other coverage.
Dave’s family lost everything: their home, their car, their savings, and their children’s college funds. Everything, even though he had done everything right.
Things went from bad to worse. After moving back to Utah to be near family and ultimately losing that initial insurance coverage, he discovered that in Utah—one of those Western individualistic survive-on-your-own-or-don’t-states—he couldn’t get insurance coverage at all for himself or his family, because he’s a diabetic, even though his diabetes is under control. Dave is handling all of this with amazing grace. His family is resilient. But resiliency isn’t everything. At some point, we all need help.
Oregon, where I live, is also one of those Western individualistic survive-on-your-own-or-don’t states, but off and on over the last decade, we have had a governor who is a doctor. He (and several others) got us started on health insurance when he was a state senator in the early 1990s and fought the fight long before Barack Obama even thought of running for President. If Dave had moved to Oregon, he would have had coverage. Maybe not good coverage, but coverage all the same.
Dave thought he and his family could hold out until the new federal law went into effect in 2014. Sadly, events proved otherwise. His son’s injuries, severe and life-changing, had to be dealt with immediately.
When Dave posted that blog entry on April 29, 2013, less than three weeks after his son’s accident, the bill for his son’s care was $700,000. I know it has continued to rise, and will rise all year.
Health care in the United States is extremely expensive. It is the major cause of bankruptcy in this country, even for people who have insurance. One catastrophic accident, mixed with co-pays and things that are not covered (as happened with Dave in 2004), and a family’s assets disappear.
Yet I can predict the comments on the first 700 words of this blog. The Europeans and Canadians will be incredulous, and thankful that they do not live here, despite the problems in their systems. A handful of tough Americans will claim they’re too healthy to worry about this. And a few comments, which I will moderate (and maybe reject), will argue both sides of the political debate that continues ad naseum in this country.
Dave does not mention the biggest problem that writers face, probably because he has already rejected it as an option. Writers who declare bankruptcy lose all future earnings in their work.
Remember I told you that we don’t sell stories. We license copyright. Copyrights are property. That’s how they can get stolen, that’s why they’re leased, that’s how they can be purchased. Your novel might be a baby to you, but to the courts, it’s an asset.
And if you have to declare bankruptcy, the bankruptcy court will look at all of your assets. If your novel is earning money, then it is a viable asset, and one the court will take to pay off your debts. You will transfer the copyright in a bankruptcy. (and if you don’t understand any of this, buy Nolo Press’s Copyright Handbook now.)
Dave and other big name writers cannot afford to declare bankruptcy. Early on, Dave’s fans helped him with these expenses by running what they’re calling “book bombs,” trying to get Dave’s independently published titles higher and higher on bestseller lists so people who’ve never read Dave’s marvelous work will find his work and contribute to his family’s income. Other such efforts have continued into June.
These things are Dave’s only hope of paying this huge bill off. That, and negotiating some of the government regulations, with the help of knowledgeable people.
If you live in America, and you are one of the legion of uninsured people, then please go and buy insurance right now. If you believe you can’t be insured, then find someone called a Health Insurance Broker, Agent or Producer. Most states have them. These people must be licensed, and they need to get their commission from the insurance carrier. Have that person help you. If you need to move to a more insurance friendly state, please consider it.
The new law will be augmented piecemeal, with bumps in the road. But you need to be on top of it. Dean and I have had insurance for our entire lives, during our marriage and before we met each other. Even when we were the most broke, we paid the insurance bill first, even before rent. In his post, Dave calls that bill ridiculously expensive, and at the moment, in the US, it is. But to do without it is to take a gamble that will not pay off.
Here’s the problem: We all end up using health care. I had emergency gall bladder surgery in 2003. The surgery itself cost my insurance company $35,000. It would have cost more, but the company had agreements with the hospital that kept some prices down. I paid $3,000 of that because Dean and I have a deliberately high deductible on our policy.
Dean had a stroke in his eye in 2011. He lost part of his sight. We did not have to take him to the emergency room. All of our dealings were with eye doctors, and hence came out of our pockets. But had that stroke been elsewhere, had it hit his brain instead, my superman would have been in the hospital for days, maybe weeks, and we would have racked up the kinds of expenses that Dave Farland’s family is.
This very thing happened to the writer Peter David in December. He had a stroke, and he’s recovering. He had insurance but, as his wife wrote on his blog in January:
Even though Peter has health insurance, there are co-pays and the like, and since this stroke fell at the end of the year, there are all new co-pays to deal with, and there are things that the insurance company just won’t cover. So we are at the beginning of what is going to be a very expensive year.
If you want to help Peter through this expensive year, please click on this link and follow the instructions.
What this blog post doesn’t mention, what Dave’s doesn’t mention either, what Dean and I barely discussed after his stroke, was the other problem. Yes, the bills pile up. And yes, if you’re a writer who has a lot of product—books out, some indie books published, etc—you might continue to earn money.
Or you might not.
(Okay, Europeans and Canadians, you can rejoin the conversation now. This rest of this post also applies to you.)
Most writers work piecemeal. We write, then we get paid. The new world of publishing is slowly changing how quickly we get paid. It’s also changing the need to work continuously to get the checks in the door.
But, we are all one accident, one stroke, one major crisis away from losing months, if not years of our work. And if the accident/stroke/crisis is bad enough, we might never write again.
Have you planned for that?
For months now, I’ve been writing blogs about how your estate can survive after your death. But what happens if you’re still alive and can’t write? What happens if you’re still alive, can’t write, and can’t think well enough to manage your business affairs?
What if you will never be able to manage those affairs again?
Have you even asked those questions? Or better yet, have you answered them?
Because the readers of this blog come from different countries with different laws, I’m not going to go into detail about solutions. Even here in the United States, the laws vary from state to state, and so what works in Oregon might not work in Mississippi.
You need to figure out a plan for your life and your writing estate. You also need to take a good hard look at your support system. In some ways, Dean and I are lucky. We’re both writers and we understand the writing side of things.
But that also makes us unlucky. I can see a serious drop in my output in the last part of 2011 and the early part of 2012 as I struggled to continue writing, deal with maintaining every part of taking care of our home, and for a few months (off and on) helping Dean with things that had to do with his health. All of that took time. He gave up writing altogether from the day our friend Bill died in August 2011 to the day that the estate closed in March of 2012. Dean suffered the worst flu I ever saw him get, complete exhaustion, and that stroke in the middle. It’s taken him time to recover.
We had the financial resources to deal with it, although it got dicey at times. The emotional resources were harder. We have a good friend support system that I probably did not lean on as much as I should have.
But since all of this occurred, we’ve been having serious discussions about how we would handle a catastrophic illness, the kind that so many other writers are dealing with at the moment. Since 2011, we have set up systems that will allow our backlist to continue getting published. We have set up our financial affairs that they’ll continue as well, unless Dean and I both die or get severely injured at the same time. That’s one reason I’m slowly writing the estate articles, so that Dean and I have done the research to prepare before we go to the attorney. Hell, before we hire the attorney who will actually work with us.
I have friends who are attorneys, friends who are judges, and so does Dean. We also have two attorneys who handle most of our business affairs. But we’ll be hiring an attorney that specializes in wills, estates, and trusts to handle this part of our life. We’re aware that it’s complicated, and we’re aware that doing this will take some time.
We have a CYA will in place—not good, but adequate should we die tomorrow. We have Advance Directives done to handle the medical care. We have enough covered that things can/will/might continue if we don’t. We are pretty well set if one of us gets catastrophically ill.
But I’ll be honest: we have benefitted from the new world of publishing. Our backlist will drive the books already published, and those monthly checks from e-commerce sites, POD books, and audio will continue, even if we’re laid up for months on end.
However, if we were still traditionally published, the idea of losing a few months to a few years would be as catastrophic as the accident/illness. Here’s why:
Writers who work for traditional publishers get paid only a few times per year. The writers get their advances, usually split between signing of the contract, acceptance of the manuscript, and publication of the book. Some, although not many, writers get royalties, which are paid twice per year.
But traditional publishers work on what I call the produce model. The books “spoil” and disappear out of shelves and out of people’s consciousness within a few months of publication. Readers forget the writer exists, and the publisher does not do any further promotion to goose sales of existing titles until a new title comes out.
I italicized that last part because it’s very important. If there is no new title, the writer gets almost no attention from the publisher. If the writer gets no attention, the books get no attention, and sales flatline. They might flatline at a reasonable level, but still, they’ll be much lower than they would if a writer kept to the usual pace of a book or two every year.
That means the royalties go down. Worse, it may mean that the writer may not have received most of the advance from the new book under contract. Look again at the terms: an advance these days is often (although not always) divided between payment when the contract gets signed, payment at the time the book gets accepted, and payment when the book gets published.
If the writer gets hurt or ill between signing and acceptance, the writer has only received 1/3 of the advance. So suddenly, because of the accident/illness, the writer’s income for the next year goes down by two-thirds, just as the expenses go up.
Can you handle this? Even if you live in Europe or Canada and you don’t have a lot of medical expenses, can you sustain a two-thirds loss of income in one year, and maybe, just maybe, a loss of even more in year two?
And what happens if your spouse needs to care for you? Can your spouse handle that and maintain her job? If your spouse is a writer, I guarantee that caretaking will hurt your spouse’s writing time. Caretaking has an impact on caretaker’s real world job (whatever that might be), on the caretaker’s health, and on the caretaker’s state of mind.
If you’re not married or don’t have a significant other, what will you do in times of serious illness? Who will help you and/or manage your finances? How do you make sure that the person whom you chose to help you doesn’t help himself to your assets?
That very thing just happened to Harper Lee, the acclaimed author of the classic To Kill A Mockingbird. She was in an assisted living facility, recovering from a stroke, when the man her original agent had put into place to take care of his clients stole her copyrights from her. He had her sign documents she could not read at the time, transferring her copyrights to him.
These things happen all the time, especially when you give someone else power of attorney or the ability to handle your affairs unfettered by your oversight. And sometimes you’re too ill to maintain that oversight.
You need a plan for all of that, a way to take care of yourself in these tough times. On a writing business level, this is especially important for you writers who are traditionally published only.
Take, for example, the thriller writer Greg Iles. In March of 2011, he nearly died in a car accident. His Audi S8 was T-boned on the driver’s side on the blues highway near his home. He lost a leg, had several major surgeries, and had a life-threatening tear in his aorta.
The publishers of his upcoming book moved the publication date to December of 2012, a date that got missed. The book will now appear in different form in early 2014, followed by two more. But, interestingly (at least to me), he has changed publishers. Did the old publisher cancel the contract for non-delivery? Did something else happen? Iles doesn’t say, but the long silence and the changes speak volumes about what can happen to a career in the middle of a serious crisis.
The accident happened more than two years ago. Iles is a #1 New York Times bestseller who has had a few movies made from his books, but a gap like this in anyone’s income is painful. And just because someone is a #1 Times bestseller does not mean that person is rich.
Much as I love his work, I don’t know Iles personally, so I have no idea what struggles he’s been through. Painkillers interfere with the creative process and rehab makes writing hard, just from the sheer exhaustion of it all. Even if Iles has a gold-plated insurance police and a disability rider over all of it, he is still suffering serious income loss. He’s also dealing with the frustration of trying to regain his health while trying to maintain his writing.
All because he happened to be on Highway 61 going from Mississippi to New Orleans on March 7, 2011. Had he taken a different highway, had he waited fifteen minutes, he might be just fine and several novels down the road.
It doesn’t matter how well you take care of yourself. You can eat perfectly, exercise everyday, have great health check-ups, and still end up in a two-car crash on a highway in the middle of the night. Or, as happened to another writer friend of mine, get hit by a bus while crossing the street. Or, as happened yet another friend of mine, break both of your arms and your nose as you trip going up an unfamiliar curb.
Things happen, my friends. Those things might not happen to you directly. They might happen to your spouse. But they will take time from your writing, and it will have an impact on your life and on your finances.
We can’t prevent every accident. We can’t stop fate from finding us. But we can prepare. We can have the best insurance we can find. We can have a plan for those moments of disability that will happen to all of us. We can let our loved ones know what to do.
All of those plans will be as varied as the loved ones who help us. Or the business partners who need to step in.
I can’t guide you through the minute details. What I tell my friends here in Oregon is different than what I’d say to friends in London. But I can tell you to prepare yourself. Guard yourself financially as best you can with insurance. Save your money. Pay off your house. Have a plan in place for the days when you will need help.
And use that powerful imagination of yours. Imagine what it would feel like to be in David Farland’s shoes right now. He has to keep earning a living and take care of a very ill son, all as the medical bills pile up. Imagine what it feels like to be Peter and Kathleen David, both writers, struggling to deal with their young family and their writing in the aftermath of his stroke. Imagine what it feels like to be Greg Iles, two years behind on a book, his life irrevocably changed by a collision that happened in less than ten seconds.
You can’t prevent the accident. You might be able to prevent a stroke by keeping your blood pressure under control, but you might not. You can’t always prevent your teenage child from doing something teenagers do. (I’m lucky: I survived the accidents I was in as a teenager (some of them car accidents) with only minor damage and no hospital stays. And I shudder to think what could have happened with five or ten seconds difference on dozens of nights when I or someone I was with was doing something no adult should ever know about.)
You can mitigate the risk with a plan and with insurance.
Please do so. It’s important, not just to yourself, not just to your family, but—as your writing grows—to your readers as well.
This blog is part of what I write every week, despite things happening in my life. I try to have a few blogs stored away for weeks when I’m tired or out of town, but I’m sure one day there will be a Gone Fishin’ sign here because of a life-changing event. I’ve been lucky: I’ve managed to publish a blog post every Thursday since the first week of April 2009.
I do this in part because of you folks. I know that for many of you, I perform appointment-blogging. The blog does take time from my more profitable (and durable) fiction writing. So if you’ve gotten something of value from this blog in the past few weeks, please leave a tip on the way out.
Thanks so much.
“The Business Rusch: “Life-Changing Events” copyright © 2013 by Kristine Kathryn Rusch.