According to the Fidelity’s Retiree Health Care Cost Estimate released last fall, a 65-year-old couple retiring this year will spend about $240,000 on medical expenses associated with Medicare premiums, co-payments and deductibles, and prescription drug out-of-pocket expenses.
This doesn’t factor in proposed legislation, which if passed into law, could cause health insurance premiums to skyrocket for Floridians in their 50s and 60s.
Like many aging Americans, you may be wondering what the future holds for health care in Florida. Here are eight things you can do to take control of your health care costs and maintain financial security in an uncertain economy.
Understand Your Deductible
You can save money on health care costs by having a basic understanding of how your deductible works. Be familiar with how much your deductible is — and whether you’ve reached it for the year. For example, if you’ve met your deductible, you may consider scheduling your next medical procedure before the end of the year. On the contrary, if you aren’t close to your meeting your deductible, you may consider delaying the procedure until the following year.
Open a Health Savings Account
Consider setting up a health savings account or flexible spending account for predictable health care expenses.
Health Savings Account (HSA)
This type of savings account allows you to set aside money on a pre-tax basis to pay for qualified medical expenses if you have a high-deductible health insurance plan, which has become more popular due to the rise in health insurance premiums.
Flexible Spending Account (FSA)
This is a special type of account that you can set up through your employer’s health insurance plan, and allows you to set aside money on a pre-tax basis to pay for certain out-of-pocket health care expenses like co-payments, deductibles and select medications. Using an FSA can also reduce your taxes.
Stay Within Your Provider Network
A network is a group of health care providers that have a contract with a health insurance company. As part of the contract, they provide services to policyholders at a lower, discounted rate. Avoid paying higher rates for the same services by making sure your health care provider is within your health insurance plan’s network when you book your appointment.
Whether you have a high deductible, are paying out-of-pocket, or don’t currently have health insurance, it pays to shop around. You can request a quote for the cost of a procedure from the provider’s billing office. Make sure to inform them of whether you have insurance or if you will be paying for the procedure yourself.
Healthcare Blue Book offers a list of fair medical service prices to help consumers avoid paying more than they should.
Considering Buying Long Term Care Insurance
People purchase long term care insurance for several reasons: It can provide better long term care setting options (home care, nursing center care, etc.), protect your personal assets and inheritance for your family, and provide overall financial security.
Like all insurance, not all long term care policies are alike. To find the best policy for your long term care needs, shop around and compare prices before purchasing a policy.
Avoid Using Credit Cards for Larger Medical Expenses
While it may seem like the most convenient option, especially with surprise medical emergencies, you should avoid using your credit card for larger medical expenses. Credit card payments are due on a monthly basis, and the likelihood that you can pay the balance in full within that timeframe is slim.
Unless it’s a new credit card with zero interest, you’ll get hit with interest charges, leading you down a long cycle of unnecessary, costly payments.
Instead, work directly with your provider to set up a payment plan that works for your budget. By breaking up the full cost of the medical service or procedure into smaller payments, you can more easily pay off the debt without having to dig into your savings or deal with outrageous interest rates.
Find Ways to Save on Medications
Whenever your doctor prescribes you a new medication, ask if there’s a generic alternative. Most health insurance plans charge more for brand name medications than for the generic version, which contains the same active ingredients.
You can also find coupons for medications and other health care-related expenses like bandages and hearing aid batteries. Internet Drug Coupons offers coupons for a variety of brand-name and over-the-counter medications.
Safety Tip: Avoid purchasing medications online to avoid the risk of counterfeit, and potentially dangerous, drugs.
Take Care of Yourself
This one’s a no-brainer: The healthier you are, the fewer medical problems you’ll have, and consequently, the less money you’ll spend on doctor visits and medications. Exercise, eat healthy, stay up-to-date on regular checkups and preventive care, and avoid bad habits like smoking or excessive drinking. Listen to your body and don’t neglect important screenings.
With these tips in mind, you’ll be better prepared to keep your finances under control and face the uncertainties that lie ahead for health care in Florida.