Financial Fast Day 6 of 21: How Do You Budget for Medical Expenses?

One of the financial fast group members had a medical emergency. She felt as though she had broken the fast to remedy the unexpected occurrence. We assured her that she had not. However, for future planning we discussed several methods to being financial prepared for medical emergencies and semi-annual dental cleanings, annual physicals, pre-natal care and the like.

Insurance  

Most people rely on the US standard healthcare provided through their employer. The type of insurance varies from person to person. In emergency instances, an in-network provider may not be available which usually increases ones out of pocket expenses. In other words, the insurance company will pay less on services rendered from an out of network doctor. When this happens it is best to have a flexible spending account (FSA) or/and a health savings account (HAS). They are different but both can be used for medical and dental expenses whether it is an emergency or preventative care.

Health savings accounts are like any savings accounts wherein the money is deposited into the account according to the employer’s schedule. So if you incur $1000 in medical bills, insure you have sufficient funds in your HSA to cover the bill. Otherwise workout payment terms with your provider.

If you are laid off or quit your job inquire about COBRA and American Affordable Care Act. If you can afford the premiums this is a worthwhile investment.

Local Dental Schools  

Many times dental schools will provide services at deep discounts. If you require attention, have no dental insurance and have limited funds be sure to contact any that are in your area.

Free Clinic/Planned Parenthood

Planned Parenthood or free clinic offers medical services as well. Because the services are free it can be difficult to get in quickly. However, it is a good option for medical services as most locations accommodate emergency visits.

Doctors/Dentists may offer charity services to income based clients

If you have a regular physician whose been your provider for years be sure to contact the office. Explain your financial situation and see what options they may have. Some doctors and dentists provide limited free or discounted services to customers based on financial need. In addition, as a long-time customer, the provider maybe willing to forgo charging a regular insurance customer rate since 1) you are a long-time customer and 2) you are paying cash so the doctor doesn’t have to go through insurance for payment.

Emergency savings

The best way to prepare for emergencies be it financial, medical/dental, home repairs, car repairs, etc. is having an emergency fund. Work to save at least $1000 for true emergencies. Create a separate savings account for this fund. As you get further out of debt you can build a larger emergency fund but $1000 is usually sufficient for most emergencies.

Stacks of $1 Bills
An Emergency Savings

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