The following is a guest post from my friend, Suzanne Cramer. Suzanne is a certified credit counselor and a Social Media Specialist for CareOne Debt Relief Services. Suzanne writes for Divorce, Debt and Finances and A Straight Talk on Debt. Follow Suzanne on Twitter @SuzanneCramer1 and @AskCareOne where she shares her insights on divorce and managing your finances. And, while we’re on the subject of guest posts, head on over to Mom’s Plans where I have a guest post today.
Medical expenses are one of those budget busters that many of us fail to plan for. Case in point, my time came last year in May when my son was diagnosed as a Type 1 Diabetic. After getting over the shock of how this would affect our lives forever, I progressed to sticker shock from all of the medical bills we were racking up.
No one expects to face a medical emergency or a life changing illness, but it’s important to plan for them. Since I wasn’t as prepared as I should have been I will be facing the consequences for quite some time. Even the initial bills from my son’s diagnoses wreaked havoc on my finances and taught me a valuable lesson: plan for the worse!
If you are on your way to becoming debt free don’t let a medical emergency set you back. Here are three must do’s to prepare your family for the unexpected.
Make Sure You Are Covered
While expensive in many cases, health insurance is one of the best ways to protect you and your family from mounting medical bills. If you need to visit the doctor or the emergency room your insurance helps to cover incurred expenses. Without the coverage insurance provides, you could be left with hefty bills to pay.
- Employee sponsored insurance. Most employers offer partially paid insurance for full or part time employees. If you are eligible it is in your best interest to enroll in one of these plans.
- Unemployed or self-employed. If you aren’t able to buy an inexpensive group plan from an employer, call around and ask different insurance providers for quotes on individual or family coverage. Many websites, such as eHealthInsurance.com, offer quotes from a number of different providers, so you can one-stop shop. You could also call an insurance broker for help.
- High deductible plans. High deductible plans offer low premiums and work well for relatively healthy families that don’t have recurring medical expenses, like frequent doctor visits, or expensive medications. Just remember they have a high deductible; typically anywhere from $1,000 to $5,000 that must be met before any bills are paid. To help you save for the deductible you may want to consider obtaining an HSA account.
Health Savings Accounts (HSA)
An HSA is like an emergency fund for healthcare costs. These accounts are held at financial institutions, and they allow you to save a portion of your pretax income in a special account that’s used to pay medical bills. When you incur an unexpected medical expense, you can use the funds in the account to pay your bills.
There are several things to consider with HSA’s:
- You must be enrolled in a qualified health insurance plan that has a deductible of at least $1,200 ($2,400 for a family).
- Money in an HSA can be rolled over from year to year, so if you don’t use it, it continues to grow tax-free.
- Excellent for your golden years HSA’s can be built up to pay for the increased expenses you may face in your retirement years.
Many employers are also beginning to offer HSA’s as a benefit to their employees, opting to put money in the account for you just for participating in the high deductible plan (which ultimately costs them less).
Government Assistance
Government assistance came through for me after my son’s type 1 diabetes diagnosis. Because of his condition I learned that he qualified for Medicaid in our state (Pennsylvania) as he was now considered a special needs child. Assistance programs vary from state to state but are definitely worth looking into.
- For more information on what’s available visit healthcare.gov.
- Several states also offer programs that provide health insurance to eligible children who are under age 18. To find more information on plans in your area, visit insurekidsnow.gov or call 1-877-Kids-Now (1-877-543-7669).
If you are unprepared and have to face unexpected medical bills that land you in debt there are reputable debt relief providers, that can help you explore your options for getting out of medical debt, including negotiating settlements or setting up a manageable monthly payment plan.
One of the best ways to combat rising healthcare costs is to be prepared. By researching your health insurance options, health savings plans, and government assistance programs you can keep medical expenses at bay and prevent medical related debt.
Have you ever been unprepared for a medical emergency and ended up with medical debt?
