Health insurance isn’t on anyone’s “favorite things to do” list. Partly because plans can be challenging to understand and partly because healthcare costs can accumulate quickly, even with insurance.
High-deductible health insurance plans (HDHPs), in particular, generally have lower premiums, but they come with other significant financial obligations. Still, more and more people are enrolling in these plans with hopes of saving money in the long run.
However, it is essential to budget for various healthcare costs when enrolled in an HDHP to ensure medical expenses don’t get ahead of you. An HDHP, like any other healthcare plan, requires a bit of effort from you to keep costs organized, paid, and as low as possible.
Here’s how you can budget for healthcare costs on a high deductible plan.
Have a Comprehensive Understanding of Your Plan
You can’t budget for healthcare costs if you don’t know the details of your plan. Therefore, you must make sure you have a comprehensive understanding of precisely what your insurance covers.
Be sure to educate yourself on the following details of your plan:
- What’s free in your plan
- Your deductible
- Copayments for different services
- What constitutes out-of-pocket expenses
- Out-of-pocket maximum
- In-network vs. out-of-network care
- How your insurance plan calculates what you owe
- Who to call about costs and other needs
- How enrollment works
You can also enlist the help of a nursing advocate to budget healthcare costs on an HDHP.
Enlist the Help of Nursing Advocates
Nurses are on the frontlines of patient care. They often have the most contact with patients and have a unique opportunity to know patients and their most pressing needs.
Nursing advocates are often focused on patient advocacy, helping people navigate difficult health situations, and educating patients on care options and resources available to them.
They can also be accommodating regarding health insurance billing or other insurance issues because they’re there to ensure medical expenses don’t prevent a patient from getting the care they need and deserve. Even if they can’t get your insurance to pay for all of your healthcare costs, they can still help you budget for what your insurance doesn’t cover, including helping you set up payment plans or apply for financial assistance.
So, consider asking a nursing advocate for help when you or your family face unforeseen medical expenses. First, reach out to your primary care physician or doctor’s office to learn about the nursing advocacy program there. Then, you can contact a suitable nurse advocate, share your needs, and go from there.
Another way to budget for healthcare costs on an HDHP is to look at your previous healthcare costs.
Look at Your Previous Healthcare Costs
The previous year’s healthcare costs are a good starting place when figuring out how much you’ll spend this year and what to budget for on your HDHP.
Conduct a medical-spending audit to determine how much you spent on healthcare in the previous year. Go through all of your medical bills, receipts, and insurance documentation to calculate all of the money that went to out-of-pocket and other medical expenses.
Then, you can budget for this amount in the coming year along with any new expenses that may arise. Then, take things a step further and create a plan to set aside money monthly for those expenses.
It’s also a good idea to set up an emergency fund for unexpected medical expenses.
Set Up An Emergency Fund
Saving for emergencies should already be a part of your budget. However, it’s a good idea to allocate some of your emergency funds to unexpected medical expenses or create a separate emergency fund for them altogether.
Disasters, hardships, or traumatic events can happen to anybody. Whether it’s a chronic illness, preexisting condition, or an injury resulting from a natural disaster, your physical health, mental health, emotional wellness, and finances will be impacted.
So, it’s crucial to set up an emergency fund to cover expenses and budget for out-of-pocket costs. Put money away each month in an emergency fund to help you cope with the financial hardship that accompanies any large-scale medical event so that you can focus on recovery.
Furthermore, you can set up a health savings account to save for emergency medical expenses. You can use the funds to cover most health-related costs aside from premiums.
Prioritizing preventive care can also help you budget for healthcare costs on an HDHP.
Prioritize Preventive Care
Preventive care encompasses routine healthcare procedures that prevent serious illness, injury, or disease. To avoid navigating expenses attached to extended hospital stays, extensive surgeries, or long-term treatment plans the best you can, prioritize preventive care.
The great thing about preventive care is that most HDHP’s cover these services at no charge to you. Preventive care services like shots, birth control, screenings, check-ups, and counseling can be the difference between landing in the hospital with severe illness and staying out of one indefinitely.
Also, be sure to track all of your medical expenses to budget as accurately as possible.
Track Your Medical Expenses
Diligently tracking your medical expenses is a must if you want to budget for healthcare costs on an HDHP. Simply put, if you don’t know what your medical expenses are, you can’t pay them, let alone budget for them in the future.
So, track your medical expenses down to the penny. You can do so manually by organizing and physically filing your invoices, bills, and receipts. Or, you can use a spreadsheet or other online platform to track your medical expenses digitally.
Ultimately, when you track your medical expenses, you have a clear vision of what needs to be paid, when, and how you’re going to do it.
Conclusion
HDHPs can be complex and costly if you let them. By budgeting for unexpected medical expenses, out-of-pocket costs, and premiums with the tips above, you can take full advantage of all the benefits that come with an HDHP.
