Healthcare costs continue to skyrocket these days. In the worst scenarios, they may cause you to suffer from horrible financial situations, such as excessive debt and personal bankruptcy. Even worse, it’ll slowly drain you both financially and mentally over time.
That’s why financial preparedness for any medical emergency is a must. However, having a health insurance plan isn’t enough to be fully prepared against medical emergencies’ financial implications. Here’s what you need to have to be financially prepared for any unexpected medical events.
Public Health Insurance
Public health insurance is any medical coverage purchased through a government program. Typically, all people of all ages and from all walks of life in a country are entitled to it. However, it prioritizes low-income individuals or families, individuals who qualify for special subsidies, and the elderly more.
Unfortunately, public health insurance comes with a few drawbacks. The medical services it covers are often limited. Moreover, it’s common to go on a waitlist for specialist visits since almost everyone in a country uses it.
This overcrowding at public facilities is often associated with low-quality care as well. As a result, misdiagnosis, inappropriate or unnecessary treatment, and prescription errors occur in many countries.
On a positive note, public health insurance premiums are less expensive than other health plans, primarily because of government subsidies. In some countries, employers are even mandated to cover a portion of their premium, making it much more affordable.
Private Health Insurance
Private health insurance can provide curative and preventive medical care coverage that your public health insurance doesn’t cover. Not only that, it offers shorter to no waiting times, better individualized medical attention and more sophisticated facilities.
Another difference between public and private health insurance is getting elective procedures. These are surgeries that aren’t medical emergencies and are often planned for in advance. Most of the time, if you have private health insurance, the waiting time is shorter than that of public patients.
However, the greatest disadvantage of private health insurance is its cost. It’s undeniably much more expensive than any national public health insurance scheme. The good news is that there are ways to trim its cost. For instance, some insurers allow removing some elements in your policy that you don’t need. As a result, your lower monthly premium costs will be reduced.
An emergency fund is a cash stash or highly liquid asset used to cover unexpected costs. They’ll serve as your safety net that can enhance your financial security in times of financial distress.
The rule of thumb is to save anywhere between three to six months’ worth of your monthly expenses as your emergency fund. You can either set aside the whole amount from the get-go or set several smaller savings goals to avoid stressing your cash flow. Consider saving your tax refund as part of your emergency as well. Instead of using it as extra money for discretionary spending, save it as an added financial cushion.
Store emergency funds in a separate saving account to avoid spending them for another purpose. Then, have it deposited automatically to that account, either by the bank or your company, to ensure savings.
If you want greater interest-earning potential, save your emergency fund in money market accounts, no-penalty certificates of deposit (CDs), or high-interest savings accounts. Moreover, they won’t charge you fees should you pull your savings out before its maturity date.
Prescription Discount Cards
If you lack insurance or adequate coverage, one way to manage expensive medication costs is by taking advantage of prescription discount cards. They sometimes go by the names like discount prescription drug cards, drug Rx discount cards, drug savings cards, pharmacy discount cards, or prescription savings cards.
They’re like traditional coupons that offer discounts of up to 90% off the price of the brand and generic medications. However, pharmacies don’t discount every prescription medicine that much. Several medicines aren’t even discounted at all.
Many generic drugs can also be completely free with discount cards, but only at specific pharmacies. In fact, the actual savings vary depending on the partnership between discount card providers and pharmacies. For example, BuzzRx offers the best-discounted rates at Walgreens.
More importantly, it’s crucial to understand that prescription discount cards aren’t replacements for health insurance. Remember that they’re only applicable toward the price of prescription medications at certain pharmacies.
Have a healthy lifestyle now to avoid high medical expenses in the future. Eat a well-balanced, healthy diet, get enough sleep, exercise regularly, make incremental changes, and have fun to achieve optimal health. Doing so drastically decreases future healthcare costs and the chance of incurring them.
Financial preparedness and prevention are both realistic approaches to any unexpected medical emergency. However, since life is unpredictable, it’s always good to be equipped with several alternative options.