Money Matters: Health Care Costs
When it comes to health care expenses, the financial burden for most Americans can be the biggest of all money issues. When we have money issues, many families end up cutting back on health care if that is possible. There are ways, though, to make sure you and your family have the right coverage in case of a serious illness or catastrophe. In addition, we can’t forget prescription drug coverage.
First thing first: start by asking yourself a few questions:
• How much can you afford to pay monthly for health care?
• Who requires coverage under your plan (just you, or a spouse or dependents as well)?
• How often do you, your spouse, and children visit the doctor?
• Do you want or need dental and vision coverage?
• Do you or your dependents have medical conditions that require specialized care?
• What would happen in the event of an accident or surgery?
• What is the maximum deductible you could afford to pay?
If you or a family member has a pre-existing health condition, it can be more difficult to get the health coverage you need. As part of the Affordable Care Plan passed in 2010, there is a Pre-Existing Condition Insurance Plan (PCIP) available until 2014 when the law, if it goes fully into effect, ensures coverage by all insurance companies for pre-existing conditions.
Here is a brief explanation of some of the most common Managed Care health plans from our friends at Practical Money Skills for Life:
• HMOS (Health Maintenance Organizations) are a type of health insurance plan where coverage is limited to doctors who work for or contract with the HMO. A primary care physician generally oversees your care and must refer you to specialists as needed.
• PPOs (Preferred Provider Networks) allow subscribers to use doctors, hospitals and providers outside of the network for a fee.
• High-Deductible Health Care Plans are high-deductible plans with low monthly premiums, designed to offer minimal day-to-day coverage but to protect you in the event of a catastrophe.
• Point of Service Plans combine some aspects of PPOs and HMOs. Like PPOs, they generally require users to choose a primary care physician, who can make referrals to other doctors inside or outside of the network.
• Fee-for-Service Plans reimburse you for a large percentage of what you pay out-of-pocket. You pay the bill for services; then your insurance company pays you back.
After choosing your plan and services, make sure to use them wisely. Most health insurers supply educational materials on preventive care such as quitting smoking, weight loss and chronic disease management. Many even provide financial incentives for completing treatment programs, getting immunizations and using generic drugs.
For information about managing health care in retirement, click here.
For more on the importance of health care for self-employed workers, click here.
In addition to making life more enjoyable, living a healthy lifestyle is key to keeping healthcare costs down. People who live a healthy lifestyle tend to be more productive and better at handling stress, making them employees that are more valuable. Being fit can even save you on health insurance – many companies factor in height and weight when determining rates for consumers. Making healthy choices, like quitting smoking, can also help to keep your health care and medical insurance costs done. For tips on living healthfully on a budget, click here.