Money and health care are always hot topics. Each one can greatly affect the other. Budgeting for health care costs is one of the best ways to ensure you manage your money well. Here are five tips for setting up a healthcare budget.
1. Get Real About What Health Care Costs
To budget effectively for health care costs, you must look at the big picture. Healthcare costs don’t just include premiums, co-pays, and cost shares. When setting up your budget, you have to include other money you are spending on staying healthy. For example, prescriptions, gym membership, and how much money you pay for your vitamins and supplements.
Include all money spent to improve your health, prevent illness, or treat current conditions in your healthcare budget. You must take a realistic approach to the costs to implement an accurate budget. According to the experts, your healthcare costs should reflect about 5% of your take-home salary.
2. Don’t Forget To Include Dental and Vision Care
We often think of health care as strictly seeing a medical doctor. However, dental and vision care is just as important. There are 4 million brace wearers in the United States. Orthodontic, preventive dental, vision, and other professional health care should all be within your budget.
Let’s say your teen needs braces, and they heard that 47% of teens that wear Invisalign say it boosts their self-esteem, compared to 22% of teens that have traditional metal braces. Now your teen wants Invisalign, do you have it in your budget to make monthly payments? Luckily with most orthodontic treatments or dental treatments, you do not have to come out of pocket with the money at one time, you can make monthly payments, but you need to plan for those payments.
3. Prepare for the Worst and Hope for the Best
Making sure you are managing your money well, and budgeting for your medical expenses should include opting in for disability insurance. What would happen if you stayed in the hospital for a few days? Would you be able to pay your bills? Temporary disability insurance is a financial safety net for such circumstances as hospitalization. 8,000 to 18,000 Americans are hospitalized annually for Legionnaires disease. Many sudden-onset illnesses or injuries can land you in the hospital. Spend some of your health care budget on temporary disability insurance.
4. Start a Health Savings Account
One of the best ways to budget for medical expenses is to have the money saved and ready to spend when needed. If you have a health insurance plan with a high deductible, you may be eligible for an HSA. A health savings account is non-taxable savings that you can use for medical expenses. It can be one of the easiest ways to be prepared for health care costs. Ask your employer if they have an HSA program. Some employers have a matching program to help their employees keep healthcare costs in check.
5. Get Expenses Under Control
Call your health insurance company and get some details about your health coverage. Ask about other plans and costs. Do the research to learn about other available options that can save you money. Become familiar with your health insurance plan because there may be ways to save money. For example, many health insurance plans will cover the cost of a gym membership, preventive care, and discounts for participating in health programs.
Budgeting for health care is not easy with today’s skyrocketing costs, but it is an essential part of money management. Start making your budget today. Reach out to a professional if you need help.