Healthcare costs keep skyrocketing nowadays primarily due to inflation’s impact on the economy. This could cause excessive debt, personal bankruptcy, and other financial setbacks that can mentally drain you over time.
Everyone should be financially prepared for all kinds of medical emergencies. However, financial preparedness isn’t just about having a budget. There’s more to it.
Listed below are other factors you need to consider.
Take advantage of your country’s public health care. It’s a health plan purchased through a government program. Since it’s government-run, everyone is entitled to get public health insurance. However, it typically prioritizes people:
- 65 or older;
- With disabilities;
- With end-stage renal disease (ESRD), like those who need regular dialysis; and
- With a lower income.
One example of a public healthcare scheme is Medicare. It’s the federal health insurance program in the United States. Specifically, different Medicare parts help cover specific services. For instance:
- Part A is for hospital insurance (covers inpatient stays in the hospital, skilled nursing facility, and hospice care);
- Part B is for medical insurance (covers outpatient care, doctors’ services, preventive services, and medical supplies); and
- Part D is for prescription drug coverage (covers costs for prescribed drugs and shots).
The premiums of public health care are less expensive than other health plans. It’s because they’re primarily government-funded and managed. Moreover, other employers in some countries are even legally held liable to cover a portion of employees’ public health premiums, making it even more affordable.
Unfortunately, public health systems are notorious for their drawbacks, which include the following:
- Overcrowded public facilities;
- Longer waiting period;
- Restricted treatments;
- Low quality of service; and
- Medical errors (e.g., misdiagnosis, inappropriate treatment, and prescription errors).
Despite these drawbacks, it pays to invest in your country’s public health care right now. This affordable healthcare can help ensure financial security for you and your family against rising medical costs.
Public insurance policies usually don’t cover all preventive and curative medical care you need. If you’d like to supplement the coverage gaps of government health plans, investing in a private health insurance product is one of your solutions.
Private health insurance is a health plan purchased directly by an individual. Compared to public healthcare, it offers more coverage, a shorter waiting period, individualized medical care, and more state-of-the-art medical facilities. Additionally, it has a shorter waiting time for elective procedures.
On the other hand, the greatest disadvantage of a private health insurance plan is that it comes with heftier premiums. But there are ways to trim its costs, such as removing some parts in your policy that you don’t need.
Emergency funds can reduce the financial stress caused by medical emergencies. They’re typically money but can be liquid assets set aside for emergencies, hence the name “emergency fund.” Its main purpose is to be your safety net in times of financial distress.
There are two simple ways to start an emergency fund. First, distribute a fixed percentage of your monthly income and allocate it to the fund. To do so, get the approximation of your three-month living costs as a target. Depending on your financial situation, you can immediately set the entire target aside or build it up over one year.
The second way is to save your tax refunds as part of emergency funds rather than spend it. To gain even more from it, transfer the funds to high-yield savings accounts, money market accounts, or certificates of deposit (CDs).
If you lack insurance or prescription coverage, a legitimate way to save on prescriptions is through prescription discount cards. They’re designed to offer brand and generic medication savings to people who self-pay (100% out-of-pocket) for medications.
Companies who negotiate with pharmacies and pharmaceutical manufacturers are the ones who typically offer them, usually at low to no cost. Apart from those who self-pay, they also offer these cards to those who are uninsured, lack adequate prescription coverage, and have pets that take medications.
Many generic drugs can be brought for free or a fraction of the price with discount cards, but only at specific pharmacies. Overall, the discounts can be up to 90% off the price of the brand and generic drugs. However, it’s very rare to get that much discount. Participating pharmacies don’t even discount every single prescription.
It’s important to understand that prescription discount cards shouldn’t serve as a total replacement for health insurance coverage. While they reduce out-of-pocket expenses, the savings are only on prescription medication costs, excluding other healthcare treatments.
In addition to prescription discount cards, you can save up to 80% on medications through prescription drug coupons. Instead of paying their usual copay, people pay a reduced cash price with a drug coupon.
Drug coupons are issued by drug manufacturers or distributed to patients or consumers through doctors and pharmacists, usually to attract people to use new or brand-name drugs. In fact, research shows that these coupons can boost retail sales of brand-name drugs facing generic competition by 60%or more.
The disadvantage of these drug coupons is that they have refill limits and expiration dates, unlike most discount cards. Most coupons generally also exclude those with Medicaid, Medicare, or other government-run insurance.
Moreover, when it comes to price, the brand-name medications these coupons markdown usually have more affordable generic versions. Drug prices vary from one pharmacy to another, too, so coupons may not give you the best savings. In other words, they lower your out-of-pocket cost but only by a fixed amount.
Safeguard yourself against potential high medical costs in the future by having a healthy lifestyle right now. Eat healthily, stay hydrated, sleep well, and exercise regularly. Moreover, create a mitigation plan for medical emergencies by arming yourself with health insurance, emergency funds, discount cards, and knowledge about your healthcare service rights.