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3 options to save for unexpected medical costs

Medical expenses are the number one contributor to debt and bankruptcy in the U.S. In fact, 67 percent of people worry about how they can afford surprise medical bills over any other expense, despite having health insurance coverage. From a short trip in an ambulance to a long battle against cancer, patients are smacked with overwhelming bills that cause unnecessary stress when they should be focusing instead on getting healthy. Luckily, there are several options available for families to begin saving for medical bills and responsibly prepare for unexpected costs.

Start an emergency savings fund.

With a little adjustment to your lifestyle and monthly budget, you can efficiently grow a pot of savings to cover a rainy day. Budget your contributions the same way you budget for your bills, mortgage, retirement savings and other expenses. It doesn’t have to be 20 percent of your income; start with two or three percent and work your way up until you have enough money to cover at least six months of expenses. Making it a habit to save a set amount each month will deem a blessing when those bills start piling.

Consider investing in a Health Savings Account. 

If your employer offers the option to contribute to a Health Savings Account, you should participate in it. HSAs work similarly to retirement accounts and offer great tax advantages. Your contributions are tax-deductible and any interest the account gains is tax-free. When medical expenses arise, no matter your age, you can withdraw money from your HSA and never be taxed. 

Users can withdraw from HSAs at any time. Though if it’s for non-medical expenses, expect to pay a 20 percent penalty. After age 65, you can withdraw from an HSA for both medical and non-medical expenses and not pay any penalties or taxes.

Get extra coverage with a supplemental insurance plan.

Enhance your current health insurance policy with supplemental insurance. Aflac is the most commonly known provider of such products, but there are other providers like AARP and State Farm that offer beneficial options. Various policies assist with unplanned expenses that your current health insurance policy might not cover, including copays and costs for overnight hospital stays. Supplemental policies such as cancer insurance and critical illness insurance will help you prepare for the worst.

Don’t let the dread of hospital bills deter you from addressing your health care needs. We can work with you and your family to determine the best option for addressing unexpected medical costs. Contact us today!