Healthcare costs can really strain your budget. With prices on the rise, managing these costs while staying healthy is crucial. A recent report from CNBC highlights that health benefit costs for employees could jump by 6.7% next year, the largest increase in 15 years. Here are four practical tips to help you keep those costs in check.
1. Understand Your Coverage
Knowing what your health care plan covers is essential. Take a moment to assess your potential out-of-pocket costs. This can guide you in setting aside enough savings for emergencies. If you realize you’re not using your coverage as much as you should—or if you’re using it excessively—it might be time to rethink your plan. Are you over-insured or under-insured? Adjusting your coverage can save you money.
2. Utilize an FSA or HSA
Flexible Spending Accounts (FSA) and Health Savings Accounts (HSA) can be great tools for managing health costs. These accounts let you set aside money tax-free for health expenses. An FSA is typically offered through your employer, while an HSA is available for those on high-deductible health plans. Using these can save you a noticeable amount—estimates suggest FSAs might cut your out-of-pocket costs by around 30%. HSAs are even more advantageous, as they offer tax benefits when you contribute, grow your funds, and withdraw for qualified medical expenses.
3. Find Ways to Lower Prescription Costs
Prescription medications can be a big expense, but there are ways to save. Consider switching to generic drugs, which are often just as effective but cost much less. Talk to your doctor about alternative medications that might be cheaper. Also, check if ordering by mail or buying a larger supply can help you save money.
4. Be Proactive About Your Health
Skipping routine check-ups might save you money in the short term, but it can lead to higher costs later. Regular screenings and cleanings can catch problems early, saving you from more expensive treatments down the line. Aditi Sharma, a vice president at Fidelity, notes that addressing health issues promptly can lead to better outcomes and lower overall costs. The sooner you consult a doctor, the better off you’ll be.
By understanding your coverage, leveraging tax-advantaged accounts, managing your prescriptions, and staying proactive about your health, you can navigate rising healthcare costs more effectively. A little effort today can lead to significant savings tomorrow.
