5 financial mistakes you might be making with your healthcare

The Centers for Medicare & Medicaid Services (CMS)reported health-related spending in 2022 skyrocketed to $4.4 trillion. While those numbers have come down since the highs of 2020, Americans are still spending a ton on healthcare. How are patients managing? NerdWallet reports that up to 27 million adults in the United States are charging medical expenses on credit cards—that’s how.

But charging off medical debt isn’t the best idea. In fact, according to the Urban Institute’s Health Reform Monitoring Survey (HRMS), 15% of adults reported that they or their families had unpaid medical bills that were past due, and nearly a quarter of those reported using a credit card to pay for some or all of their medical bills.

These numbers are scary, especially since most medical costs aren’t optional. But managing your finances, especially related to healthcare and insurance, can help set you up for success. Below, we’ll cover five common healthcare-related financial mistakes that you may be making right now, and how you can turn them around.

1. Not comparing healthcare plans

The best way to find the most affordable healthcare coverage is to shop and compare prices, features, coverage, deductibles, prescription benefits, and provider networks for different insurance plans. We know that sounds tedious and time-consuming, but some websites allow you to compare plans on your own, or you can simply contact a local insurance agent to help.

If you qualify for your employer’s healthcare plan, you should review and compare your options there, too. Many employers still pay a portion of the monthly premium, and since your premiums are paid with pre-tax dollars, it also lowers your taxable income. Those plans are generally hard to beat in terms of pricing and features, especially if you work for a mid or large-size company, but do your due diligence.

It’s easy to compare plans by their monthly premium, but there’s more to your plan than just the price tag. A less expensive premium will lower your monthly out-of-pocket cost, but, in the end, you may end up paying more on claims.

Consider your healthcare needs, the average number of times per year that you visit your doctor, your copay amount, the cost of your prescriptions, and whether your preferred doctors are in network. Keep in mind that the highest and most expensive plan is not necessarily the best option for everyone, even if your budget can afford it.

2. Not knowing how your plan works

Once your insurance plan is in place, it’s important to know how it works. It may be a bit confusing at first, but if you don’t take the time to understand the rules and features, you risk spending far more money than you should.

For example, your physician may be in network, but their in-house lab may not. Or, the hospital may be in network, but not the doctor you see. Check with your insurance company before any scheduled service or procedure to make sure you’re using as many in-network providers as possible. It’s also important to know when you need pre-authorization for an upcoming test or a procedure. Without it, your insurance company may not pay any portion of the cost, which can be pretty hefty.

Getting to know your plan isn’t only about discovering the limitations. If you’re lucky, you might find some hidden gems along the way, like reimbursement for your gym membership or a weight loss program, or a free smoking cessation program. If you have questions about your plan, don’t hesitate to call your insurance company’s customer service department. They’ll help you make better, more informed decisions and ultimately avoid unwelcome surprises.

3. Forgetting to compare service costs

If you’re in the market for a new television, want to hire a lawn service, or need to have your home painted, you shop around for the best price, right? Why not do the same when your doctor orders lab work or an MRI? Sometimes these can be big-ticket items, and there’s no standard price across the board.

Whether you’re choosing a doctor, planning to have surgery, or searching for a pharmacy, you should compare costs. Prices for these services vary widely. With a little research, you can save some cash and put those extra savings back into your emergency fund or a high-yield CD or Money Market. To get started, check out online cost comparison tools, like fairhealthconsumer.org, for the latest pricing on common medical procedures, prescription drugs, and services.

Consider, too, the day of the week and the facility you choose when you need medical attention. Without question, in the case of an emergency, you should go directly to the nearest emergency room. However, you shouldn’t head there for every sniffle and sneeze, as those visits can add up.

If it’s after business hours or over a weekend, consider whether your condition can be handled by an urgent care clinic. During the week, a visit to your primary care physician is a financially smarter choice. Minor illnesses can even be handled through a virtual visit with an online physician if your insurance plan allows. All of these solutions are more cost and time-effective than an emergency room visit, so if it’s not a true emergency, you might want to explore another option.

4. Not inquiring about generic brands

The FDA requires generic medication to work the same and provide the same clinical benefit as the brand-name version. Dosage, safety, effectiveness, strength, stability, quality, and even the way it’s taken, are the same.

Generic brands have the same active ingredients, work in the same way, and come with the same risks and benefits as their brand-name counterpart. So, if a generic medication delivers the same result and is less expensive, why not use it?

The main difference between generic and name-brand drugs comes down to cost. Unlike brand companies, generic manufacturers compete directly on price, which results in a lower cost for patients. How much lower? Generics have saved Americans $408 billion just in 2022 by using FDA-approved generic and biosimilar drugs.

Any time your doctor orders a prescription, ask if there’s a generic alternative. You’ll feel better both medically and financially!

5. Neglecting to negotiate a payment plan

Sometimes an unexpected illness, an accident, or a hospital stay brings costly medical bills that your insurance plan won’t cover. Or, maybe you don’t have a medical insurance policy to help offset some of the cost.

While it’s easy to see how a situation like this could wreak havoc on your finances, there are ways to make the cost somewhat more palatable. Contact the billing department and ask about any discounts you may qualify for, especially if you’re able to pay a lump sum or a portion of it upfront.

Some hospitals, nonprofits in particular, have financial assistance programs designed to help people pay for medical care that they couldn’t normally afford, and others offer a 0% interest repayment loan. Neither you nor the provider wants the bill to go to collection, so you both have a vested interest in working together to find a comfortable solution.

Key Takeaways:

• Be sure to shop around and compare all of your insurance options. Once you pick a plan, make sure you understand how it works, in terms of in-network care, prescriptions, and more.
• Check for generic versions of prescribed meds. They have the same active ingredients without having to pay for brand names.
• Unexpected issues are bound to happen. But if you find yourself in a situation where you can’t afford your care, don’t panic. Contact the billing department to see about available discounts or payment plans.

Finding the right healthcare providers and insurance plans can be daunting. Add in the bills and potential medical debt, and it can feel extremely overwhelming. But you’re not alone in feeling this way. Keep these tips in mind as we head into open enrollment and make healthcare a little easier—and put less strain on your wallet.

How to set a budget for holiday spending

You might have pumpkins on your porch, but it’s time to make room for the year-end holidays in your budget. The average American spends approximately $1,000 on Christmas, with 71% of budgets assigned to gift purchases. That’s a chunk of change, and overspending could impact your finances going into the new year. Here’s how you can set a budget for holiday spending and keep your finances in check. 

Start planning early

The earlier you start saving for holiday shopping, the better. The holidays are stressful enough—and racking up credit card debt to pay for gifts is the last thing you need to worry about. Save yourself the headache and start saving as early as possible. Consider using a holiday savings account—funds are automatically transferred to your primary savings each year on November 1st, just in time to start making your list and checking it twice. 

Work backward

Your past holiday spending is the best indicator of what you’ll spend this season. Look at your credit card statement from last year and determine what you spent on presents, travel to visit long-distance relatives, or other holiday-related spending.  

Once you’ve estimated past expenditures, create a baseline for this year that includes what you can reasonably save over the next few months. Set a total and divide it by the number of people on your list, then prioritize. For example, if you plan to spend $1,500 and have 15 people on your list, you may want to spend more on some or less on others.  

But, presents likely aren’t all you’ll buy. Account for decorations, travel, donations, and more. Don’t forget to build in a miscellaneous category, too. It’ll give you extra cushioning if a co-worker gives you an unexpected gift and you feel compelled to reciprocate. It’s always better to have some wiggle room—and whatever you don’t use can go back into your savings.

Look ahead

Setting a spending limit is just the beginning—budgeting requires discipline and regular check-ins. Set a weekly reminder on your phone to review how much you’ve spent thus far and how much you have left to spend. Overshot the budget on a gift? Make an adjustment to other gifts or expenses for the particular month. 

Always keep your budget’s ultimate goal in mind. It might be focused on the months of November and December, but it will affect your finances well into the new year. If you blow your budget and don’t have additional funds set aside, what’s going to happen? You’ll be pulling out your credit card and racking up more debt. 

That doesn’t mean you have to pay for your presents in cash, but you should have plenty of money to pay it off. If you pay with a credit card, use one that offers cash back or other rewards so you can at least gain something in return. 

Shop around for deals

Browse the internet for gifts you need to find the best deal. An easy way to compare prices across multiple platforms is through Google Shopping. Simply search for the item you want, and Google Shopping will present listings. You can filter by price, brand, online or in-store availability, and more. 

Shopping online is also a great budget-saving tool. Sure, you might be paying a little more for shipping in some cases. But, it’s easier to eliminate impulse purchases compared to shopping in-store. 

Get creative

If your budget is being stretched thin, consider non-monetary or hand-made gifts this year. Could your parents’ yard use some TLC? Offer to mow their lawn for free. Do you have a grandparent whose recipes are scattered on notecards? Compile them into a book for easy access! Whatever it may be, gifts from the heart are always appreciated—and an easy way to save some cash. 

While you’re thinking about all the gifts you’re going to give this year, plan ahead and budget as a gift to yourself. Setting a budget for holiday spending is a great way to avoid overspending and financial stress in the new year. By following the tips above, you can create a budget that works for you and your family and still enjoy the holiday season. 

5 ways to protect your online presence

Every day, it seems like we hear about new or emerging internet scams. As helpful as the internet can be, the horror stories tend to cast a dark cloud. But, with a few simple precautions, you can still use the internet safely. Here are five easy tips you can implement to protect your online presence.

1. Enable two-step authentication

Also known as multi- or two-factor authentication (MFA) or login approval, two-step verification provides an extra layer of security beyond your username and password to protect against account hijacking. When using this security feature, you will log in using your password and then be prompted to verify your identity again. This second verification is usually done via a biometric (fingerprint or face scan), security keys or a unique one-time code through an app on your mobile device.

Many websites and companies offer two-step verification, and they make it easy to set up this second layer—usually found in the settings section of your account. Using two-step authentication can help you feel more secure, especially for sites containing your financial information, like online banking.

2. Check a site’s SSL certificate

Whenever you’re shopping online and entering credit card or bank information, it’s important to make sure that website is secured to protect against hackers trying to steal your information. You can find out if a website is secure by checking its SSL (Secure Sockets Layer) certification. While this process sounds complicated, it’s actually one of the simplest and quickest things to do for your online security.

When on a website, check the URL. Does it start with “http://” or “https://”? If you notice an “s” at the end, that means your connection is encrypted and secure. Any data you enter is safely sent to the website. However, not all sites have SSL certification. They may be fine to browse, but avoid sharing any financial or personal information on websites without this added layer of security.

3. Don’t save financial information on shopping platforms

Many shopping sites let you save your credit card information in your online account. This setup makes it easier to make purchases in the future, as your billing and shipping addresses and credit card information are stored. However, if you can access this information, so can hackers. Rather than store your credit cards and addresses in your accounts, spend the extra minute to enter your information each time you make a purchase.

Even sites with SSL certification can be hacked. While there may not be a way yet to completely safeguard your data from hackers if you shop online, you can secure your financial information better by removing it altogether from shopping sites.

4. Be careful who you trust

Catfishing has made headlines numerous times in the last few years, and this online scam doesn’t seem to be letting up anytime soon. Catfishing happens when a person sets up a fake online profile—usually on social media or dating sites—and targets people with the goal of asking for money.

Catfishers are in it for the long game and may try to strike up an online relationship for months before asking for money. The losses can be extreme, averaging more than $15,000 per victim. To avoid catfishing, don’t accept friend requests from people you don’t know and never send money to someone you haven’t met in person. If a situation ever feels suspicious, trust your gut and cut off contact with that individual.

5. Create strong, unique passwords

Whether it’s your social media or online banking accounts, it’s important to use strong, unique passwords. Contrary to popular belief, you don’t need to constantly change your passwords (unless you notice unauthorized access or your account is part of a data breach). But, it’s recommended to avoid reusing the same password across different accounts.

Make your password a sentence: A strong password is a sentence that is at least 12 characters long and a combination of upper- and lowercase numbers, letters, and special characters. Focus on positive sentences or phrases that you like to think about and are easy to remember (for example, “Il0v3c0untrymu$ic!”).

Bottom line

Protecting your online presence is essential in today’s digital world. Following these five simple tips can help you protect your online presence and safeguard your personal information from hackers and scammers, and minimize your risk of becoming a victim of cybercrime.

Even if you take all the necessary precautions, it’s important to be aware of the latest online scams and threats. Stay informed by reading security blogs and articles, and report any suspicious activity to the appropriate authorities. By working together, we can create a safer online experience for everyone.