There’s no question that healthcare is expensive in this country. It doesn’t matter what sort of plan you’re on, you’re paying in one way or another. But is it possible to get good care without overspending? The answer is yes – but only if you have a plan.
How to Save on Healthcare Costs
According to the most recent set of data collected on the topic, the average person spends roughly $10,345 per year on healthcare related expenses – including insurance premiums, copays, medication, and other direct and indirect expenses. (It’s important to note that this is just the average. Roughly 5 percent of the U.S. population accounts for half of spending in a given year, while half the population accounts for just 3 percent of spending).
Even if you spend just half the average amount, you’re still shelling out an average of $431 per month. For someone making an average wage, this is an exuberant amount.
If you study national health expenditure trends, it’s clear that things are getting more expensive by the year. In 2000, the average person spent just $4,855 per year on health spending. This begs the question, how can you continue to get the care you need without going broke in a marketplace where healthcare expenses are surging?
There’s no clear answer, but there are some practical steps you can take to improve your health, lower expenditures, and save money along the way.
- Pick the Right Policy
Picking an insurance policy is a lot like gambling. When you select a plan each year, you’re essentially banking on the fact that you’ll either be healthy or unhealthy. You either pay a high premium to get a low deductible, or a low premium for a high deductible.
When selecting a health insurance policy, the key is to pick something that fits into your budget. Don’t skimp, but certainly don’t pay more than you can afford. Find a plan that fits comfortably and puts your mind at ease.
- Supplement With Discount Memberships
Unfortunately, affordable health insurance policies don’t always come with the coverage you need for healthcare expenses that insurance companies don’t consider “essential.”
Dental care is a great example of this. Most basic health insurance plans don’t cover basic teeth cleanings, fillings, and other dental work. If they do, the amount they cover is typically minimal.
One way to account for this is by supplementing your insurance with discount membership programs. DentalSave is a great example. It works like a wholesale price club for dental care and allows users to save as much as 25 to 50 percent off dental procedures.
Similar programs exist for prescription medication. RxSavingsPlus is an example. You simply sign up, print your membership card, and show it to the pharmacist for savings of up to 70 percent off standard prices.
- Use an HSA
Do you have a health savings account (HSA)? If not, you may consider looking into this option as a way to stretch your dollars and prepare for the future at the same time.
An HSA is simply a tax-beneficial savings account that’s designed for the purpose of helping people pay for out-of-pocket medical expenses. “To qualify for an HSA, you must have a high-deductible health plan and no other health insurance. You are not yet eligible for Medicare, and you can’t be claimed as a dependent on someone else’s tax return,” investment expert Amy Fontinelle explains.
The contribution limits for HSA’s are fairly limiting – $3,450 for individuals and $6,900 for families – but you can place these investments into mutual funds and enjoy substantial growth over time.
- Buy Long-Term Care Insurance
Think healthcare is expensive now? Wait until you’re retired.
“An estimated 70% of seniors 65 and over wind up needing some type of long-term care in their lifetime, and the figures are downright astonishing,” Maurie Backman writes for The Motley Fool. “A year’s stay in a nursing home, for example, will run you about $82,000, and that assumes you’re bunking with a roommate. An assisted living facility, meanwhile, will set you back over $43,000 per year, on average.”
While you might not be able to avoid a nursing home or assisted living facility, you can set yourself up financially by investing in long-term care insurance once you reach the age of 55 or 60. If nothing else, this will protect your nest egg and help it go further.
Make Health Your Number One Priority
There is nothing in this life that matters more than your health. So while it would be nice if healthcare were cheap and affordable, it’s sometimes necessary to spend substantial money in order to get the care you need.
Be smart and save money where you can, but don’t let money hold you back from being healthy. It’s ultimately better to be healthy and poor than sick and wealthy. But finding where the line is drawn in the sand can prove to be difficult.