How to Save for Medical Expenses and Disability Costs for the Unexpected Later

An unexpected illness or injury can lead to unplanned medical bills and disability costs. This can be especially difficult for those on a tight budget, including the 60% of Americans living paycheck to paycheck.¹ Here are a few tips to help you learn how to save for medical expenses and disability costs so you won’t be overwhelmed financially in an unanticipated predicament.

Choosing the right health plan is the first step toward saving money on your medical expenses. You’ll need a balance of cost and benefits — you don’t want to pay for more coverage than you regularly use or scrimp on premiums only to pay a bundle when you need care.

Estimate your health care expenses for the coming year, and then select the plan that makes the most sense for your needs. Budgeting for medical expenses can help you stay on track financially as you learn how to save for medical expenses.

Here are a few questions to help you start thinking about your needs as you consider health plan options:

• How often do you typically utilize your health plan throughout the year?
• Is having out-of-network coverage important to you?
• Are you or a dependent taking a maintenance medication?
• Do you prefer your benefits to be structured around co-pays?

Answering these questions can help determine what’s best for you — whether it’s a lower- or higher-deductible plan, a plan with co-pays or a plan with higher coverage for medications.

If you’re concerned about exposure to health care costs, a low deductible isn’t your only option. You can consider selecting a High Deductible Health Plan (HDHP) with a higher deductible and lower monthly premium. If available, sign up for tax-advantaged or employer-provided ways to save, including Health Savings Accounts (HSAs), Flexible Spending Accounts (FSAs) or Health Reimbursement Arrangements (HRAs).

• HSAs: Qualified HDHPs are designed to be used with HSAs to allow you to pay for certain medical expenses with money sheltered from federal taxes. This lets you fund your account with pre-tax dollars, or you can contribute to your HSA from your own bank account (up to the annual maximum allowed) and qualify for a deduction on your tax return. The funds in your HSA account are used to help pay the deductible.
• FSAs: With an FSA, you can reduce your taxable salary and put that amount into an FSA account to reimburse your family for certain health and/or dependent care expenses (up to eligible limits).
• HRAs: An HRA is funded solely by employers to reimburse you tax-free for medical care expenses.

The leading causes of disability are common conditions such as arthritis, back pain, cancer, heart disease, diabetes and mental health issues like depression.² The odds of this happening are one in four, as 27% of adults in the U.S. have some type of disability.³ To help offset lost pay, disability insurance replaces a percentage of your monthly income. Consider purchasing both short-term and long-term disability plans that coordinate for maximum protection throughout a disability.

By thinking ahead and planning for tomorrow’s possibilities, you’re more equipped to lead a resilient life. In addition to helping you learn how to save for medical expenses, we’re here to guide and provide for you along your journey to a strong financial future and help fortify your steps as you follow God wherever he leads. For more information, contact GuideStone® at Insurance@GuideStone.org or 1-844-INS-GUIDE (1-844-467-4843), Monday through Friday, from 7 a.m. to 6 p.m. CT.