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When you need to protect your finances, there are quite a few things you can do. But what about unexpected medical bills? Medical bills are among the most expensive you can face, and often require long-term payments. Insurance helps, but it usually doesn’t fully cover the full cost of treatment. So what can you do to help yourself? From creating a medical emergency fund to accessing a flexible savings account (FSA) as an employee, here are some suggestions.
A Solid Health Insurance Policy
There are many savings strategies and plans you can use for better healthcare and potentially lower costs. However, no more so than a solid insurance plan. Insurance may not cover the entire bill, but it can greatly ease the pressure of full medical charges. If your health is severe and has been caused by something beyond your control, such as asbestos exposure, there is free legal help for mesothelioma victims and other similar legal programs you can look into.
Protect Your Finances with an Emergency Fund
A 2022 Federal Reserve survey found that 37% of adults in the US don’t even have a $400 fallback for an emergency medical treatment. An emergency savings plan is vital, but it also helps to have a separate one for medical expenses, and it’s easier than most people think:
- Try to save around three to six months’ worth of expenses in an accessible account.
- Remove temptation with savings automation that puts money into your fund.
- With this financial cushion, you reduce stress and potential debt from an emergency.
Apply for Health Savings Accounts
You may not know that there are health savings accounts (HSAs) available through banks and specialized services. These are pretty powerful because they are highly deductible, meaning you can deduct them from your taxes. Additionally, it grows without accruing tax, and if you withdraw funds for medical expenses, you won’t pay any tax on that either. Any funds you save also roll over to the next year, making HSAs a powerful way to cushion the blow of medical bills.
Understand Your Health Network
If you have an insurance plan, there is usually a network of approved clinics, doctors, and services that are approved by your insurance provider. You are free to use any service you wish. However, staying within the approved network will keep insurance premium costs down and reduce medical bills. You can ask if a service is within your insurance provider’s network when you book an appointment, which can potentially save you hundreds or thousands of dollars.
Understand Bills to Protect Your Finances
According to the Medical Billing Advocates of America, around 80% of medical bills contain errors, and it’s even possible that medical bills get sent to collections without your knowledge. To protect your finances, it is advisable that you review medical bills to avoid serious problems.
Request itemized bills
It is best practice to always ask for an itemized medical bill, as it will list every service you received. This makes it much easier to spot mistakes with pricing and erroneous charges.
Check for duplicate charges
It is common for medical bills to contain duplicate charges. Look for services that you have been billed for twice, such as the same test, and immediately bring it up with customer services.
Cross-reference service codes
There are often codes that medical establishments use for each service. Cross-reference the codes with the services you actually received to make sure they are accurate on your charges.
Bills can often be confusing, and one does wonder if this is intentional! However, it is vital that you examine your medical bills to ensure that you are being charged fairly for services received.
Negotiate More Favorable Terms
Most people just accept the prices they are quoted when signing up with a service or booking an appointment for something. Most money-saving experts will advise that you negotiate for better terms. But did you know you can also do this for medical services? If you are paying out of pocket for services, always try to negotiate better terms as you are footing the bill. Most hospitals, providers, and services are willing to come down a little if you are paying for yourself.
Sign Up for Prescription Programs
Prescriptions for medication can get pretty expensive, and so much so that it becomes untenable with multiple items. However, like most things these days, there are prescription subscription services available. Some can cover the entire cost of a script or provide partial assistance. These can be a lifeline when things are getting too expensive. You can also save by asking a doctor to prescribe a generic version of a popular brand medication you need.
Protect Your Finances with an FSA
The Employee Benefit Research Institute found that around 33% of workers use a flexible savings account, known as an FSA. An FSA is a powerful savings tool for employed people as it allows you to set up a savings account for placing funds before you are taxed on them:
- Contributions to an FSA are placed before you are paid, and are therefore, untaxed!
- The funds are available for a range of services such as prescriptions and OTC meds.
- Be aware that you must spend FSA funds before the end of the year, or they will be lost.
Take Better Care of Yourself
This kind of goes without saying, but taking care of yourself typically means almost zero medical bills. Of course, there are things out of your control, such as an illness, condition, or accident. However, personal hygiene, wellness and wellbeing practices and excellent dental care will dramatically reduce your overall medical bills over the years. With good personal healthcare, the most you will pay for are your annual checkups, screenings, and vaccinations, fingers crossed!
Summary
A reliable medical insurance plan is a solid way to protect your finances against hospital and other medical costs. However, a proactive approach to medical care is a winner with an understanding of medical billing, and of course, taking better care of yourself over the years.
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