Healthcare expenses can be a burden even for people with health insurance. People on plans with high deductibles may end up spending a lot of money before their insurers start footing the bill for their care. It’s no surprise that so many people regularly find themselves in medical debt and have to make sacrifices to cover their healthcare costs.
But some of these sacrifices can be quite extreme. In a recent survey by HealthCareInsider.com, 17% of respondents said they forgot to pay for food so they could cover their health costs. It is a really sad and unfortunate thing to do.
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The importance of health savings
It’s one thing to cut down on something like entertainment to pay for medical bills (which 18% of survey respondents did). But it’s another thing to have to cut back on the essentials.
Not only are Americans cutting back on food to pay for health care, they are also skipping rent and mortgage payments to cover that cost. These are tough choices that could potentially leave them homeless, let alone their credit score.
This is why health savings are so important. Here are a few different options to consider.
Regular savings accounts
You should have money in a regular savings account to cover emergencies, and some of these could include unexpected medical bills. Generally speaking, your emergency fund should have enough money to pay for at least three months of medical bills. On top of that, you may want to save enough to cover the deductible imposed by your insurance plan. For example, if this deductible is $ 1,400, this is what you would like to save.
You can also open a savings account dedicated only to medical bills. In this case, again, you should aim to save at least the equivalent of your plan’s deductible.
Flexible expense accounts
With a Flexible Spending Account (FSA), you have money deducted from your paychecks to spend on health care expenses. You get tax relief on your contributions, but then you have to spend that money only on qualifying medical expenses, and you have to use it before the end of your plan year.
For this reason, it is important to estimate your health expenses for the year in advance, as you must register with an FSA before the start of your plan year. A good bet is to base your FSA contribution on your medical expenses for the past two years.
Health savings accounts
Health Savings Accounts (HSAs) work the same as FSAs, but they are limited to people with a high deductible health insurance plan. If you are not sure if your plan qualifies, you can ask your benefits coordinator or call your insurance company to ask.
HSAs offer more flexibility than FSAs because you don’t have to use your money within a certain time frame. In fact, HSA funds never expire, and the money you don’t need for short-term medical bills can be invested for further growth.
Do your best to save for health expenses
No one should have to forgo food when medical expenses arise. If you’ve had to skip meals to pay for health care costs, do your best to save money. To do this, you may need to find a second job temporarily, but it’s worth it if it means being able to eat and take care of your health needs at the same time.
Also, don’t hesitate to negotiate with your healthcare providers if you end up with large bills that you can’t cover without having to make an extreme sacrifice. You never know when a supplier might give you a little slack by lowering your bill, giving you more time to pay, or a combination of the two.