One measly unforeseen medical event can easily derail your financial progress if you are not careful. According a recent CNO survey[1], 85% of respondents have reported having some level of concern about their personal finances with one of the top stressors being medical events. One of the best ways to mitigate the damage of a sudden medical expense is to have a plan.
Proactively Save
One way to prepare for a medical event is to proactively prepare for one. Setting aside a small amount of your income for medical expenses can become part of your normal savings routine, slowly building your safety net. It also helps reduce your stress knowing that some money has been assigned to an “emergency” or “medical” category in your budget. Contributing to a Health Savings Account (HSA) is another great way to save for medical expenses. HSA’s don’t only provide a savings vehicle, they also provide some major tax benefits: deposits are tax-deductible, growth is tax-deferred and spending is tax-free.
Don’t have access to an HSA? No problem! Consider using a sinking fund to hold onto your medical savings. You can track the amount in a spreadsheet, use an app, or even go the old school route and put cash in an envelope.
Evaluate Insurance: Health and Life
Understanding your insurance policies is an effective way to be prepared for an unexpected medical event. Health insurance and life insurance can help protect you and your family from extremely high costs and expenses. Take a look at your out-of-pocket maximum and use that as a guide to create your medical savings goal. Working toward that amount will help give you an extra layer of protection in the event you or your family members need medical care.
Once family members start to depend on your income, life insurance becomes more important to consider. Having a life insurance plan in place can give you piece of mind knowing your family would be financially set given an unprecedented medical emergency.
Know Your In-Network Providers
One simple step you can take to reduce medical costs is to make sure all of your primary care and specialist providers are in your insurance’s network. Out-of-network providers offer the same care as in-network providers, but at unnecessary increased rates. Lastly, create a quick list of local, in-network providers so you can be prepared in the event of an emergency. Most health insurance companies can help you determine which doctors are covered on their websites.
Understand Medical Bill Payment Options
Sometimes medical bills do hit hard and there’s nothing you could do to avoid it. There are a few things you can do to manage your medical expenses including payment plans, hardships benefit plans, or even negotiating costs. According to NerdWallet, debt collectors buy debts for pennies on the dollar, which can open up some negotiation power. You can also review your medical bills in detail to ensure everything appears to be correct and you aren’t being overcharged.
We’re Beside You Every Step of the Way
Our approach at Bankers Life is to support you every step of the way as you navigate each new phase of your life. Lean on us to answer questions about health or life insurance to ensure you have the support you need before you actually need it.
[1] Q1 2023 CNO Customer Advisory Board Survey: Helping Consumer Navigate Economic Uncertainty, 85% of respondents have some level of concern about their personal finances with the top life events experienced being loss of a family member, leaving the workforce or a major medical event, 2023
