How to prepare for healthcare expenses now

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Three strategies to help with medical bills

Healthcare expenses can really hit home hard. While health insurance is vital to help keep medical costs down, many people think they’ll only use their insurance for routine doctor visits. But life happens, sometimes bringing large medical bills to your front door:

  • Your son breaks a collarbone playing football. Approximately 2 million injuries, 500,000 doctor visits and 30,000 hospitalizations happen each year from high school sports, according to the CDC.
  • A member of your family is diagnosed with type 2 diabetes. Thirteen million men and 12.6 million women in the U.S. have diabetes, according to the American Diabetes Association.

In 2007, a Harvard University study found that debt from healthcare expenses was responsible for 62% of personal bankruptcies in the U.S., making it the biggest cause. Even more surprising, 78% of those who filed for bankruptcy had health insurance.

In addition to having health insurance, how can you prevent medical bills from piling up? Try these three approaches.

Practice preventive care

Regular preventive care and a healthier lifestyle are some of the most effective ways to control costs. Three-quarters of American healthcare expenditures are linked to preventable, chronic or lifestyle-related conditions, according to The New England Journal of Medicine. Healthcare reform required all medical plans to cover eligible, in-network preventive care at 100%, so there’s no reason not to practice prevention.

How to practice preventive care

  1. Doctors agree that an annual physical is one of your best assets for monitoring your health.
  2. If you’re covered on one of GuideStone’s health plans, plan your family’s preventive care by using the
  3. Preventive Care Schedule.
  4. Make healthier lifestyle choices and reduce your risk of health issues.

Allocate healthcare dollars and set them aside

If you have access to a Flexible Spending Account (FSA), are eligible to open a Health Savings Account (HSA), or have an employer-sponsored Health Reimbursement Arrangement (HRA), it may save you cash to use them. FSAs and HSAs allow you to set aside pre-tax dollars to pay for medical expenses throughout the year. And an HRA is an employer-provided, employer-funded medical reimbursement plan.

How to save with an FSA

An FSA can be a handy way to save for medical expenses. Each year, you determine the amount of pre-tax dollars you want to set aside for your family’s medical needs. Generally, the total amount is available from day one (it doesn't have to accrue). FSAs must be set up through an employer, even though they are employee-funded. Additionally, they may only be used to reimburse certain eligible expenses. Learn what's eligible for FSA reimbursement.

Switch to new generic drugs

Each year, some prescription drug patents expire. This means that these drugs are now eligible to be manufactured as "generics." Over 20 of the most-prescribed drugs in the country are slated to "go generic" in 2011-2012 alone. Is a brand-name drug that you’re taking on the list? By switching to a generic version, you could save on drug costs (generics typically cost 20% to 80% less) and copays. Save even more by signing up for Medco’s mail order service. Consult with your doctor to see if switching to a generic is right for you.

You can take control of your healthcare costs. Learn nine more ways to spend smart and keep healthcare from costing an

arm and a leg.

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