Inflation and healthcare costs: How you can prepare
You’ve likely noticed higher prices at the pump, the grocery store, and just about everywhere else. This could also include your doctor’s office or local pharmacy. A recent study from HealthView Services projects that healthcare expenses will likely spike 12% higher and stay there for two years before coming back down. Even then, health expenses may tend to keep rising, just at a slower rate.
With this in mind, here are things to consider when making healthcare choices for you and your family.
Save Often, Save Smart
You’ve probably already started looking for ways to budget expenses and maximize savings. Coupons are great for groceries, but a reimbursement account for healthcare expenses may be more helpful. Reimbursement accounts are a way to help you with tax savings and to pay for eligible medical and dependent day care costs. Some common reimbursement accounts include:
- Healthcare Flexible Spending Account (HCFSA): An HCFSA allows you to set aside money from your paycheck on a pre-tax basis to help with eligible expenses, like prescriptions, doctor visits and more. The full amount you elect to set aside is available at the beginning of your plan year for tax-free healthcare expense reimbursement.
- Health Savings Account (HSA): An HSA is similar to an HCFSA in terms of helping you pay for eligible expenses tax free. However, the funds that are set aside are available for distribution only as funds are contributed to your account, allowing your account to build over time. HSA funds can roll over into the new plan year, allowing you to treat this account as a long-term savings option. These accounts are only available to individuals covered by a qualified High Deductible Health Plan (HDHP).
- Dependent Care Account (DCA): A DCA lets you reimburse yourself pre-tax for expenses associated with caring for a child under 13 or an adult dependent incapable of self-care.
- Limited Purpose Flexible Spending Account (LPFSA): An LPFSA is designed to help you save money pre-tax on eligible dental and vision expenses. You can use an LPFSA together with an HSA for extra tax savings.
If you have one of these accounts but only think of it for copays or prescriptions, you may be missing out on more savings opportunities. View the FSA and HSA eligibility list
If you don’t have a reimbursement account, check with your human resources representative to see if your employer offers any of these options and whether you’re eligible to enroll.
Use Your Benefits
This may seem obvious, but if you have supplemental insurance benefits, don’t forget to use them. When you’re wrapped up in everything that goes with an accident or surprising diagnosis, it’s easy to forget to file a claim. Familiarize yourself with your policy’s benefits so you know all your options. For example, some insurance policies include wellness benefits for annual physicals or screenings. Don’t leave benefits on the table; file claims as quickly as possible.
When your doctor advises that you need a procedure, it’s not uncommon for them to refer you to a particular specialist or hospital. This may not be the most cost-effective option, though; different providers can charge vastly different amounts for the same procedures or medical equipment. Calling around to price check is well within your rights as a patient. In fact, hospitals are required to make prices for procedures available per the Hospital Price Transparency Law. Doing this can potentially save you hundreds of dollars. Tips for shopping for healthcare from PatientRightsAdvocate.org
This blog is up to date as of August 2022 and has not been updated for changes in the law, administration or current events.
Employers offering PFML reduce the stigma around discussing mental health. It signals understanding and empathy for personal challenges.
An old tax avoidance strategy is making the rounds again. Employers should be aware so that when it comes knocking, they know how to respond.