Stop Paying More Than You Have to on Out of Pocket Healthcare Costs
When you’re young and relatively healthy, healthcare expenses don’t amount to much. You might have an occasional doctor visit here and there, but the costs are manageable.
But by the time you reach middle age – or as soon as you develop any type of chronic condition – out of pocket healthcare expenses suddenly become a huge factor in your monthly budget. Learning how to lower these costs will help to improve your financial outlook.
4 Ways to Lower Your Out of Pocket Costs
According to research published in the annual Milliman Medical Index, the total cost of healthcare for an average family of four was somewhere around $15,788 in 2018. More than one-quarter of this expense – or an average of $4,074 – was allocated for out-of-pocket expenses. And these expenses are expected to rise in 2019 (as they have nearly every year for the past two decades).
Healthcare bills are costly in more ways than one. In addition to taking away cash that could be used on other purchases, high out of pocket expenses also hurt the average family’s ability to borrow money.
“As the JPMorgan Chase Institute has documented, roughly one in six families makes an extraordinary medical payment in any given year,” the study’s authors explain. “These extraordinary medical payments are timed around moments of increased ability to pay and associated with 9 percent higher credit card debt a year later.”
If you want to get the healthcare you need without depleting your budget and ruining your credit, you’ll have to develop a plan. Though every situation is unique, here are a few simple ways to lower costs.
- Sign Up for an HSA
If you have a high-deductible plan, then you most likely qualify for a Health Savings Account (HSA).
An HSA is simply a dedicated savings account where you can stash cash for qualified health expenses and get a tax break on the contributions. And if you choose to invest your HSA into a mutual fund, you can even earn tax-free interest on your money.
- Purchase Drugs From Canada
Did you know that you can purchase drugs online from a Canadian pharmacy and save a ton of money in the process? Because prescription drugs are far cheaper across the northern border, you may be able to save as much as 50 to 90 percent on your medications (while using the same product that you’d receive here in the United States).
- Shop Around for Better Plans
When choosing a health insurance plan, the ones with lower monthly premiums seem most attractive. But any time you choose a cheap plan, you’re going to get stuck with a high deductible. This means you’ll likely end up paying more in out of pocket costs.
If you want to lower your out of pocket expenses, shop around for plans with lower deductibles. Yes, you’ll have to pay a higher monthly premium – but the overall costs are generally lower over the course of a given year.
- Invest in Preventative Care
The best way to lower your out of pocket healthcare expenses is to avoid the need for healthcare altogether. You can do this through smart preventative care.
Every person has unique needs, strengths, and weaknesses, but there are some core tenets to good preventative care. By doing the following, you’ll give yourself the best chance to live a happy and healthy life:
- Eat less processed food and consume more fresh ingredients.
- Stay hydrated.
- Exercise at least 30 minutes per day.
- Sleep a minimum of seven to eight hours per night.
- Find ways to reduce stress.
- Visit a doctor for a regular checkup every year.
- Quit smoking.
Don’t Overpay for Healthcare
There’s an assumption among many people that healthcare expenses are what they are. In other words, there’s a feeling that you can’t do anything to lower the amount you pay. But as this article shows, this isn’t true. If you think outside of the box, there are plenty of proactive techniques that allow you to lower costs for you and your family. Figure out a plan that works for your situation and give it a try this year!