Health insurance is great to have, especially if someone needs frequent treatment, or just in case something terrible happens. While health insurance often pays most or all of a procedure’s cost, there are many insurance policies that have high deductibles.While these policies cost much less than low deductible plans, they leave you with a large bill if something does happen. If you have one of these plans, or if you are planning on choosing a plan with a high deductible, then use these tips to prepare yourself for devastating costs.
Prepare an Emergency Fund
Most high deductible health insurance policies have deductibles in the thousands. While paying $5,000 for a $20,000 procedure is great, you are still left with the $5,000 bill. One of the best ways to prepare for this is to make an emergency fund.
There are many ways of making an emergency fund, but it is usually best to organize your efforts to ensure you always put money into it. Normally it is best to start the fund with your deductible. In this instance, save about $5,000 for the fund. After that, put aside part of your weekly paycheck. Before setting anything aside, make a monthly budget for yourself. See how much money you need every month, and put the extra away in the fund. You may need to work extra hours to put some money away, but it is definitely worth considering.
High Limit Credit Cards
Using credit is generally a bad idea, but having a credit card with a high limit can save you from having to declare bankruptcy from several expensive procedures. If your credit score allows it, you should try to get a credit card that has a maximum limit of about three-four times more than your deductible.
If you can’t get a credit card with that high a limit, then get a credit card that is at least enough to pay for one full deductible payment. When you use this approach, make sure you allocate your funds so you can quickly pay off the card. Otherwise, the interest rate will make you pay a lot extra, and you won’t have this safety precaution if another procedure is needed and the credit card is taken up.
Going after high-risk stocks might be a bad idea, but paying money into a secure investment can help you make some extra money that may be available within a few months or years. While this is not as immediate as the other measures, it can help you turn a small amount of money into a larger amount; enough to pay your high deductibles.
Since you don’t want to end up losing money, make sure you look into very secure investments that are guaranteed or have a very high chance of increasing in value. For example, bonds are a good idea. They take time to mature, but there is almost no chance that government-backed bonds will lose their value. Consider doing this immediately, so the investment can be used if an accident occurs.
High-Yield Bank Accounts
Getting a high-yield bank account is a great way to increase your money, which can be beneficial when you need to pay a high deductible. You typically need to start with a base minimum, typically around $5,000 to $10,000, but you get more from these accounts than you do from others. When using one of these accounts, make sure that you can take out the money whenever you want to, because some accounts do not allow you to do this.
Much like secure investments, this should be thought of as a side preparation and not a primary one like an emergency fund or credit cards. If possible, it is best to keep the money in this type of account so it can keep growing. However, the money from these accounts can make it much easier to pay down your hospital or doctor bills.
Compare Health Insurance Policies
Before entering into a high deductible health insurance policy, you should always compare different companies to ensure you are getting the best insurance. Some health insurance companies make you pay a large premium, even if you are getting a high deductible plan.
By comparing health insurance companies, you can easily check the deductible, co-pay and premium amounts. This ensures that you only pay what you are comfortable with, and it keeps you from being ripped off by less-than-reputable companies.
Being prepared to pay off your deductible is a great idea when you have a high deductible insurance plan, especially if you or your family is prone to needing procedures. Use the methods above, and definitely consider comparing insurance companies to get a lower deductible and premium. This will help keep your health care affordable, while assuring that you can still see a doctor when needed.