Budgeting for Health Care Expenses

Posted by

While my budget has been looking great this year since I haven’t done any shopping – I was smacked back to reality this week. I got 3 bills in the mail the other day for $145, $110, and $120 for doctor bills – all of which are not covered by health insurance. Apparently, this is what happens when you have kids in preschool. They catch EVERYTHING, and bring it home to spread the joy around. This winter has been particularly horrible and I don’t think anyone was completely healthy the whole month of December. Unfortunately, everyone is sick once again but we are close to being able to open a window and let some fresh air in (hurry up Spring)!

Getting sick isn’t an emergency fund “emergency” since it is predictable and should be built into your budget. I’m pretty sure this winter is just the first of many where a lot of my money is going to go to co-pays and the pharmacy. There are a few things you can do to try and lower the cost without sacrificing your health.

If you have health care through your employer:

Comparing health insurance plans is something I do every year. Most people automatically enroll in whatever they signed up for initially but think about how much things change in your life from year to year. Do you have the same needs or concerns that you had 3, 5 or 10… years ago when you started working? If not, you might want to explore all your options and make sure you are doing what is in your financial best interests.

Look at everything when you compare plans and coverage, not just premiums. There are other important factors like your deductible (money you must pay before the insurer pays), co-pay (the flat fee you pay each time you get medical treatment), and co-insurance (the out of pocket % you pay for services). One cost that helped me make my choice this year was the all-in cost which basically means if the wheels completely fall off and one of us gets really hurt or sick what is the most out of pocket we would have to pay. It’s sort of a worst-case scenario way to look at things but I’d rather know what that looks like than be bankrupted by medical bills.

Use a Flexible Spending Account (FSA) or Health Savings Account (HSA) if offered.

These types of accounts allow you to pay for out of pocket health care costs with pre-tax dollars. The IRS sets the limits for what you can contribute annually to them and they have some key differences.

With a Flexible Spending Account you can contribute up to $2,650 in 2018. One thing to consider with this is that they are use it or lose it types of accounts. Some are set up with grace periods or limited carry over amounts that go into the next year but it might help to have an idea of what your costs are before committing the max contribution. With my family of 4 spending that much on things like glasses, dental work ((shakes fist)), co-pays it is not hard to imagine spending that much annually.

Health Savings Accounts are sometimes available if you are in a high deductible health care plan and have different limits for single and family plans. In 2018 if you are single you can contribute $3,450 and family can do $6,900. If you are over 55 you can add an extra $1000 to that. I have this and I like it since it is the only way I know to take advantage of pre-tax contributions, tax free growth and withdrawals for health care costs which are pretty much a given at any age. These do not have to be used annually and can grow until you eventually need them for health care costs, even if that isn’t until retirement. I haven’t been able to save too much because we have current health care needs but I like to hope maybe we will have a few good years where we will all be healthy and this account will get bigger.

If you pay for health care on your own (and/or don’t have great coverage)…

Here are some ways to save money if you don’t have any of the options above to take advantage of. Even if you do there are some things that you may not need or should ask regardless of your plan.

How much does this cost?

This summer my daughter bumped her head and she was a little out of it. I panicked and we brought her to urgent care who said they couldn’t help and sent us to the hospital. By the time we ended up being seen my daughter was kind of acting like her usual self and appeared to be fine. The Doctor finally checked her out and said she seemed alright but then said they were going to do an MRI. I asked how much it cost. They all looked at me like I was some sort of crazy person. No one could answer me. Which lead to my next question…

Is this medically necessary, and what are the risks if we say no?

They let me know that it was just a precaution and that most of the time it is fine and we would be on our way. At this point my little one was just bouncing around like normal so I took her home. It would have cost $1,000+ to have this done I later found out and she was ok. If money was no object would I do an unnecessary test, maybe but it was a small factor in my decision making. Did I feel embarrassed for asking (yes) but it is important to ask questions and I will continue to. No one knows how much procedures cost and people don’t try to negotiate which is part of the problem.

Buy in bulk and use pharmacy rewards cards

Lately I can make it rain with CVS extra care bucks with all the money I have been dropping there on cough drops. If you have a rewards savings card at your pharmacy take advantage of it. Also, do a quick search for coupons from the manufacturer and use them. When you buy pain relievers or OTC medications you can usually save some money if you buy the medium or larger size. Most don’t expire for quite a while (always check).  This might save a little money and time the next time you feel a bug coming on.

Staying Healthy and Preventing Illness

Get into an exercise routine

I’ve always liked exercise but what I do has changed dramatically over the years.  I’ve gone from sports to gym/classes to workouts in my basement when my family sleeps.  They keep me healthy and sane. Budgeting is my thing but this is one area that I am all for spending if it works for you. A trainer that gets you in the best shape of your life or that yoga class? If you look forward to every week it has real value and is worth it.  Just don’t sign up pay and not go, that is a financial no-no.

Eat Healthy

I am not a nutritionist but try eating things that only have a few ingredients. Make sure they are ones you can pronounce – unless you count Quinoa.  Also, avoid eating too much sugar.  Fruits and vegetables are usually a safe bet.  I you aren’t hungry enough for an apple you aren’t hungry – you’re bored.  If you feel like you spend a fortune at the grocery store and have kids read this

Vitamins, Minerals and Herbs

This is an area that I rely on the experts.  I do notice a bit of a difference when I get enough Vitamin D.  Sunshine is limited these days but I use a supplement and have taken some Vitamin C and Zinc.  This helps prevent or lessen the severity of the colds that have been going around. 

Elderberry Gummies taste pretty good so I take them when I can find it in stock. Natural medicine was a lifesaver when I was pregnant and couldn’t take anything.  Since then I will never be out of fresh garlic, cayenne pepper, honey and apple cider vinegar.  This is my homemade flu prevention combo.  Unfortunate side effect: it also prevents attention from the opposite sex.  

No rushing to the Dr.’s office when my family got sick this time around.  I felt a bit more prepared for what to look for.  Looks like we will spend this February “vacation” recovering. How do you manage health care costs during the year? Leave your favorite natural remedies worth trying?

 

Spread the word!

Join the conversation! Comment below

This site uses Akismet to reduce spam. Learn how your comment data is processed.