Medical debt continues to be a growing concern, with a significant percentage of individuals burdened by it – even those already covered by insurance.
According to BouyFi research, about 75% of the people with medical debt want to pay it off. Many have negotiated a settlement or payment plan with their healthcare provider to help them achieve that goal. Once that debt is resolved, people should develop and commit to a plan that helps to ensure they don’t find themselves right back where they started.
If that sounds like you, establishing a savings routine that fits your financial situation is critical. Planning for future medical expenses requires a strategic plan that considers you and your family’s unique needs and challenges.
Here are 5 steps to help you get there:
Step 1. Be honest about your finances
Begin by honestly evaluating your finances and creating a budget. You may have already completed this task while negotiating your medical debt payment plan. If not, take time to discover how you spend your money month-to-month. Build a budget that allows you to cover all your critical expenses, and then dedicate a portion of what’s left to pay down debt and/or create a savings account.
Step 2. Create an emergency fund
Start an emergency fund to cover unexpected expenses, from simple auto repairs to a short stretch of unemployment, including unexpected medical bills. Although this may take some time, most experts suggest saving enough funds to cover three to six months’ living expenses.
That may seem like a lot to save, but don’t let it deter you from getting started. Whatever you can put away for an emergency will be helpful if and when that event occurs.
Step 3. Factor in your health insurance coverage
Review your healthcare coverage and include it in your overall budget. If necessary, work with one of your healthcare providers so that you know exactly what you would owe once you meet your deductible, both individual and family, and whether your preferred healthcare provider is considered in-network or out-of-network by your insurer.
Don’t forget to also include expenses not associated with your deductible, like co-pays and prescription medication. If you change insurance providers, make sure any prescription drugs you regularly take – brand name and generic – are covered under your new policy.
Step 4. Consider purchasing disability income insurance
More than 1 in 4 of today’s 20-year-olds will become disabled before turning 67, according to the Social Security Administration. Whether short-term or long-term, managed care for a disability can be expensive. Disability income insurance will provide financial support during that income disruption.
Many employers offer group disability insurance as part of the company’s benefits package at no cost to the employee. When you enroll, consider whether you might need supplemental disability insurance to completely cover your individual circumstances.
Step 5. Open a health savings account
If you have a high-deductible health plan, consider opening a health savings account (HSA). HSAs can provide tax advantages, and allow you to set aside pre-tax dollars specifically for medical expenses like doctor’s office visits, co-pays, dental expenses, vision care – even Medicare premiums.
HSAs through your employer can make it easy to save. Simply contribute a portion of your pre-tax paycheck as part of every payroll you receive. Though there is a maximum amount you can contribute each year, there is no “use it or lose it” penalty and you can take your HSA with you if you switch employers.
3 Ways to Save on Medical Costs
Once you’ve established your healthcare budget and ensure that it fits within your overall budget, it’s time to consider ways to save on healthcare costs.
1. Research healthcare options and providers
We often think of hospitals and health centers as one-size-fits-all facilities in which both the quality and cost of care are the same. Nothing could be further from the truth.
Before you schedule health care, take time to research providers in your area. Read online reviews from patients, ask for recommendations from friends and family, and compare the cost of standard procedures. Spending a little time learning about these things could save you money and ensure that you receive your desired health outcomes.
2. Put a premium on preventive care
Make regular check-ups, screenings, and healthy lifestyle choices routine. Catching a health issue early can greatly reduce the cost of treatment and more importantly, save your life!
Consider regular exercise and healthy eating preventative care as well. Maintaining a healthy weight, avoiding tobacco products, and moderating alcohol intake can significantly reduce your overall risk for many health problems.
3. Shop your prescriptions around
Before you tell your doctor to send a prescription to your regular pharmacy of choice, take a moment to consider your options. You may be able to purchase your prescribed medication for less.
Always ask your doctor if there is a generic medication, because if available they will work as well as the name brand and are almost always less expensive. Other options such as ordering through the mail, using a discount card, or comparing prices online through an aggregator like GoodRx will help assure that you are paying the lowest price for your prescriptions.
BuoyFi is always here to help
As you work to resolve your medical debt and plan for a healthy financial future, remember that BuoyFi is always here to help. And if you know someone who would benefit from our services, make sure to tell them about us. We offer a suite of tools, educational content, and access to medical billing advocates that can help to resolve medical debt burdens and plan for a successful financial future.
Ready to take the first step? Download the BuoyFi app today.