The big news right now is health care reform. On a practical level though, most of what is being done with health care reform is purely cosmetic. And besides, a lot of what is being done won’t actually affect you immediately. In the meantime, health care costs continue to rise. USA Today reports that PricewaterhouseCoopers expects health care costs to rise by 9% next year. And I’m already seeing increased costs, thanks to the age-based premium.
The fact that my husband and I both turned 30 this year means that we are seeing an increase of $80 per month in our premium, which make no sense. We live a reasonably healthy lifestyle, but you will notice that we don’t get any credit for the fact that I attend the gym, or for the fact that my husband hasn’t been sick for years. And, of course, we aren’t getting any sort of discount for the preventative flu shots (out of pocket) I got for my son so that he hasn’t been sick so far this flu season. Oh, no, no. But administrative fees abound, and turning 30 flips some sort of magic switch. So, even though my actual risk profile says that my health is improving and I’m less likely to be ill, I’m going to be paying more for health insurance in the coming year.
Since it will be a rather cold day in hell before insurance companies actually provide us discounts for responsible health behaviors, and since hell will, in fact, freeze over before the government does something effective for the people due to the gobs of money our representatives receive from the health care industry, I know I’m on my own for this mother of all money drains. So, here are some things I’m considering in terms of reducing the financial cost of health care:
- High Deductible Health Plan: The higher your deductible, the lower your insurance premium. If you are willing to pay more out of your pocket, your premium costs will go down. You may have a higher co-pay, and you may have to pay some of your other expenses yourself until you meet your deductible. Some people get plans with such high deductibles that the only reason they have them is to cover some sort of medical catastrophe.
- Health Savings Account: If you decide to go with a high deductible health plan, you might couple it with a Health Savings Account. This type of account allows you to put money into an interest bearing account that functions a lot like an IRA. You receive tax advantages, and you can use the money to pay for out of pocket expenses as you work toward your deductible.
- Cash Discount: Some health care providers will give you a discount if you pay cash. You can get between 10% and 20% off some services. I get a discount with some of my health care providers. Call yours to find out whether a cash discount is offered, or shop around for a provider that will work with you.
- Change Coverage: At the very least, you can change some of your coverage. Review what you have, and decide whether you still need it. I no longer need maternity coverage, and being able to drop it is a great benefit. Maybe you don’t need coverage for alternative treatments, or some other coverage you have. Evaluate who is on your policy, and whether or not they need to be. You can also look at your coinsurance situation, and whether or not some plan can be worked out with your partner.
In the end, planning ahead for increased health costs is necessary. Even if you don’t get a Health Savings Account, you should still set aside some sort of emergency fund to help cover unexpected expenses and cover costs. Your Flexible Spending Account at work can also help with this. Look at your financial situation and see whether you have any extra money that you can put aside for health care costs. Add it into your budget, since you never know when you will need it.
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