When it comes to healthcare, budgeting medical costs can be tricky. After all, it can be difficult to find the money to pay for all of the expenses that pile up throughout the year.
Whether it’s planned costs, like insurance and prescriptions, or unplanned costs, like a trip to the emergency room, health care expenses can quickly add up. Because of this, it’s important to have a good budget in place to ensure you’ll be able to cover any and all healthcare expenses. However, coming up with a good budget and sticking to it can prove to be difficult all on its own.
Tips for Budgeting Medical Costs
With that in mind, here are a few tips to make budgeting for healthcare a breeze:
First off, it’s a good idea to start by adding up all of your routine medical costs. These may include things like monthly prescriptions, wellness visits, and health insurance fees. You will most likely have quite a few medical expenses each year and it’s important to know what they are. After you add up all of your annual medical expenses, you should have a starting point for your budget.
You’ll also need to include emergency medical costs in your budget. While this may be difficult to do, it’s important to have money set aside in case you get sick or injured. In these instances, it’s a good idea to have a few months’ worth of living expenses to cover costs if the bills pile up or if you’re unable to work. Having an emergency fund on hand is key to being able to afford these unexpected costs.
How to Reduce Your Medical Expenses
There are also a few ways to reduce medical expenses. For starters, it’s important to be proactive with your health. For example, paying for wellness visits can help detect and prevent illnesses in the future that could cost significantly more than the copay for the wellness visit. Additionally, it’s important to take care of health problems sooner rather than later. This can be a big difference in medical expenses. In fact, one study shows that patients who received physical therapy early on for back pain had medical costs that were $2736 less than those who did not. Being proactive is key to preventing medical bills from piling up later on.
Choosing where you receive medical care can make a difference in expenses as well. While most primary care physician expenses will be the same, choosing where to be treated for unexpected health problems can help lower medical costs. In fact, choosing an urgent care location can cost under $150 as opposed to an ER visit, which can cost about $1500. It’s important to be smart about choosing where to receive medical care to cut down on costs.
Consider a Medical Savings Account
And last but not least, you should consider using special savings accounts to help you save money for medical costs. Special accounts like an FSA (Flexible Spending Account) or HSA (Health Savings Account) can help you save money and keep your budget in check.
When it comes to medical expenses, every penny counts. So whether you’re trying to budget for annual expenses or unplanned medical costs, these tips should help you keep your finances in order.
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In healthcare savings, I found out that timing also makes a difference. Last December, I decided to go for surgery after I satisfied my individual out of pocket cost. By doing so, my health insurance company paid all 100% of my surgery. It’s always a good practice to review your health insurance coverage.
We have high-deductible insurance plans, so qualify for a Health Savings Acct., which also lowers our income taxes since the HSA contributions are tax deductible. I’ve also found that ‘shopping around’ can save $; for instance, the cost of an X-Ray varies by almost $200 from 1 place to the next around my area!
Wow … that is a pretty significant price difference, Lauren.
Thanks for sharing that info!
It sure surprised us, Len! I count it as another “Plus” for our high deductible plan (the difference between “my insurance will cover it” and “WE need to cover it until our deductible is met”!)
I had my first big expense since going on Medicare earlier this year. It was a complex surgery that I drove halfway across the country to find the best expert for. I wondered what my out of pocket expense would look like. I finally got a statement from Medicare and the top line showed a total expense of $249,000! Yikes! On further reading of the bill it showed that by government slight of hand they immediately disallowed over $220,000 of the hospital charges and that Medicare and my supplement paid for all of the rest. Cost to me was zero. Except for the near heart attack I had when I opened the bill.
If I had to guess, I’d bet there were line items on the statement such as $250 for a single Tylenol pill and $500 for a band aid.
I also suspect if somebody walked into the same office and offered to pay cash for the same procedure, their bill would be 10% or less of the $249,000 total expense that was on your bill.
Add $20 for an unopened box of Kleenex.