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Managing Higher Out Of Pocket Medical Costs

image of young woman at computer looking at medical bills

Get ready. You're probably going to be dipping even deeper into your wallet to pay for the cost of health insurance.

An analysis by the Kaiser Family Foundation has found that workers’ out-of-pocket health care costs under employer insurance plans are growing as more and more workers are steered into high-deductible plans.1

Feeling the financial pressure? You're not alone. According to a survey from the benefits firm Alegeus, 66% of consumers rank planning for out-of-pocket health care costs as the most challenging and stressful aspect of managing their health care.2

nearly 3 in 5 would have to borrow money for a $3,000 medical bill

Luckily, with a bit of perseverance and planning, there are steps you can take to help you more easily cover higher out-of-pocket medical costs.

Saving strategies

  • Save for your deductible
    Take a moment and review your health insurance plan. Find the maximum you have to pay out-of-pocket. Then start saving enough to cover it. It'll feel good to have the money ready, just in case you need it.
     
  • Start a Flexible Spending Account (FSA)
    An FSA allows you to set aside some of your earnings pre-tax and use that money to pay for qualifying expenses, most commonly for medical or dependent care expenses.

    If your company offers this program, you can participate through payroll deductions. Since the money isn't taxed, it'll cost you less than if you saved it post-tax.
     
  • Use a Health Savings Account (HSA)
    If you have a High Deductible Health Plan (HDHP) with a Health Savings Account, use it to set aside money to help cover any out-of-pocket expenses. You can make pre-tax contributions into an HSA, which will help you save on taxes.

    Funds can be withdrawn tax-free to pay for or reimburse out-of-pocket medical, dental, and vision costs. But keep in mind: HSAs cannot be used to pay health insurance premiums, the monthly cost you pay for your coverage.

Supplemental health insurance

Take advantage of supplemental health insurance
Serious illness or accidents are all but guaranteed to result in high out-of-pocket medical costs. That's why it's so important to get Supplemental Health Insurance.

Based on your diagnosis or treatments and your specific policy, it entitles you to a lump sum payment above and beyond anything that might be paid as part of your primary medical plan.

And here's a nice bonus: You can use the money in any way you choose — to help cover the cost of your deductible, to pay for everyday expenses like groceries or rent, or even cover unexpected costs like travel, day care, or housecleaning services while you're on the mend.

You can sign up for a policy that covers accidents, critical illness, cancer or hospitalization. For help deciding which products are best for your needs, read our article on how Supplemental Health Insurance works.

Get smart

Changes in our health care system are putting more and more decisions in your hands. Your best defense is to take positive action and to arm yourself with the facts.

Make sure you thoroughly understand your coverage and your options. Manage your care to help control costs. And don't forget to take advantage of wellness benefits at work. Gym reimbursement, weight-loss counselors, psychological assistance, and more can help you avoid medical problems before they start.

 

Overview

Supplemental health insurance 101
How to cover rising medical expenses
Which benefits should you choose at your age?
A checklist for smarter benefits enrollment
Financial security through employee benefits

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