Health care costs can be financially devastating for families — especially for those without a sound health care budget. And just having health insurance may not be enough. In fact, the Kaiser Family Foundation reports in nearly two-thirds of households with medical bill problems, the patient had insurance.
Even regular expenses that help keep you well — nutritious food, routine exams, gym memberships — can become a financial burden. But by determining expected costs, trimming where you can, and planning for the unexpected, you can save money and boost your health. Here’s how:
1. Determine your fixed and variable costs, and plan for unexpected expenses.
This is simpler than it may sound. Fixed costs are regular monthly amounts you’re expecting, such as health insurance premiums or medications you take routinely. Variable costs include mostly smaller out-of-pocket costs that can be less regular. Seeing the doctor for a sinus infection? Your office visit copayment and one-time antibiotic prescription fall in this category.
Unexpected costs are bigger out-of-pocket expenses that are unpredictable and could lead to a financial or health crisis. Here we’re talking about car accidents, chipped teeth or trips to the emergency room, which could run from $1,000 to $2,000. Set aside an emergency fund so these kinds of unexpected expenses don’t take a toll on your checkbook or your health.
2. Learn how special savings accounts can work for you.
Health reimbursement arrangements, health savings accounts and flexible spending accounts are special savings accounts that can help you budget and save money for health-related expenses — so you don’t have to sacrifice your health later. Your contributions to an HSA or FSA are deducted from your paycheck before taxes, lowering your taxable income and saving you a little more. Your employer makes the contributions to an HRA on your behalf, and you don’t pay taxes on that money.
It’s important to plan carefully for FSA expenses: Those funds don’t roll over from year to year, so you should only put in what you know you’ll spend before the end of the plan year. HRA and HSA funds do roll over, but HRA expenses and limits are determined by your employer.
3. Review your current health spending.
Gym memberships, massages, acupuncture and high-quality foods are great investments for your health — but does your budget have room for it all? A gym membership may be worth the money for its health and mood-improving benefits, but the personal trainer may cut into your health care budget or take away from your unexpected expenses budget. And fresh food you cook for yourself is great — but buying organic may reduce the amount you have left to spend on regular dental and vision care. There are no right or wrong answers for examining your current health care spending. The goal for your review should be to identify which areas are most important to you — and where you can cut back without sacrificing health benefits.
4. Get back into a routine.
If you’re skipping routine dental visits and annual eye exams to avoid co-pays or out-of-pocket expenses, you’re doing yourself a disservice. Skipping out on these routine exams can cause serious health consequences. For example, a cavity left untreated can lead to inflammation, gum disease and more expensive treatment later. Skipping your annual eye exam can leave you vulnerable to blinding eye diseases that often have no symptoms in beginning stages.
And not all health routines need to cost a lot — or anything. A brisk walk at lunchtime or after work costs you nothing but time. Exercising and eating healthy regularly is a great way to boost your health, which in turn leads to fewer doctor’s appointments and costly health problems in the future.
This post is based on content that first appeared in SmileInSight.