Are You Prepared For Unexpected Health Care Expenses?
How a health savings account can help.
If there’s one thing for certain in life, it’s unexpected expenses. This can be especially true when it comes to health: we just never know when an unpredicted illness or accident is going to occur.
This unpredictability, along with the added worry about how to pay the bills for doctor visits, hospital stays, emergency room visits and medications, can cause stress. And ironically, financial stress can actually affect your health. It’s sort of a chicken-egg situation.
So what can you do to prepare for health care expenses? One action is to open a health savings account (HSA) plan through your employer. HSAs are like regular savings accounts, except that the funds in the account are to be used only fo qualified medical expenses. The money in the account isn’t subject to taxes — so you automatically save money on your health expenses, based on your tax rate. Plus, the money in the account earns interest.
To be eligible for an HSA, you have to be enrolled in a high-deductible insurance plan. But the money in the account is yours — even if you change jobs — and anything in your account you don’t spend rolls over into the next year. To learn more about HSAs and how to determine the benefits of one for you and your family, check out the easy-to-use Health Savings Account Calculator: http://cdn.optum.com/oh/ohb/calc/calc.htm.
Other ways to help deal with unexpected health care expenses:
Shop around. Some providers, clinics or procedure costs may be cheaper than others.
Ask your provider about less expensive, generic versions of any prescriptions you’re given, or cheaper alternative medicines.
If your provider suggests a test or procedure, ask if it’s truly necessary, if there are other options or if it would be safe to wait.
Being prepared for health care costs can be especially important if you’re retired or close to retirement. Even if you’re not close to retirement age, it’s never too early to start thinking about how you’ll manage those expenses when the day comes. To get an estimate of how much your future health needs might cost, use this tool: https://www.optumbank.com/resources/library/healthsavingscheckup.html.
Even if thinking about things like insurance, HSAs and your health care costs stresses you out, remember: a little knowledge is a powerful thing. Taking just a few steps toward better planning is good for your financial — and your physical — well-being.
Disclaimer: Health savings accounts ("HSAs") are individual accounts offered by Optum BankSM, Member FDIC. Optum Bank HSA calculators are provided as reference tools based on the information you provide. Due to the complexity of federal and state laws and regulations, and your unique individual circumstances, results provided are estimates only, the accuracy or applicability of which are not and cannot be guaranteed. Actual results may vary. The calculators do not validate information provided and do not consider variables such as eligibility, distributions, self-directed investments, account fees, and changes in laws and regulations. The calculators do not provide and are not intended to provide legal, tax, or investment advice. Please contact a competent legal or tax professional for personal advice.
The Optum Bank HSA calculator is intended to be used as a reference tool only. Your actual maximum contribution, tax savings and future savings may vary depending on a number of factors (such as variations in other payroll taxes, income or medical expenses and changes in state or federal tax laws or regulations).
Investments are not FDIC-insured, are not guaranteed by Optum Bank and may lose value.
By Laura Grathwol, Contributing Writer
Sources
Mayo Clinic. Stress symptoms. Affects on your body and behavior. Accessed November 14, 2018.
Mayo Clinic. Health savings accounts: Is an HSA right for you? Accessed November 14, 2018.
Optum Bank. Top 5 reasons to use an HSA. Accessed November 14, 2018.
American Psychological Association. Face the numbers: moving beyond financial denial. Accessed November 14, 2018.
Last Updated December 11, 2018