Higher Healthcare Costs Are Affecting Your Financial Habits

a doctor's hands held behind his back, and one of his hands is holding a blue and silver stethoscope

Did you experience higher healthcare costs this past year?  50% of employees with health insurance did.1  Statistics from a recent, reputable survey* revealed that increasing healthcare costs lead to poor financial decisions that not only prove harmful for your current situation but for your future as well.  Take a moment to understand the potential harm of bad habits and how you can transform them into great habits for financial success.

First, the good news.  The survey showed that those of you dealing with higher healthcare costs are…

  • Taking better care of yourselves (69%),
  • Looking for cheaper providers and insurance (25%),
  • And asking your doctors for cost-friendly treatments (41%).

Way to go!  Maintaining good health and trying to save money will definitely help you on your way to great financial wellness.

The bad news… it could be costing you more than you think, both financially and physically.

Bad Habits with Health

When people try to cut costs, they end up cutting their chances of a quick recovery.

  • 19% of employees delay their doctor visits until it’s serious.
  • When employees do visit the doctor and receive a prescription, 43% of them skip doses or don’t even fill their prescription because of the cost.

Bad Habits with Finances

Good intentions to save money, because of increased healthcare costs, could end up hurting rather than helping.  Take a look at what else the survey found:

  • 1 in 4 employees are decreasing retirement contributions, delaying retirement, and increasing credit card debt.
  • 1 in 2 employees decreased their savings contributions, and 1 in 4 have already used up most, if not all, of their savings.
  • Employees are dropping insurance benefits (15%), borrowing money (13%), and taking out loans or withdrawals from their retirement plans.

An inability to overcome today’s financial challenges means setting yourself up for future financial problems: overwhelming debt, no savings to compensate, and a serious lack of funds for retirement.

But all is not lost!

Whether you’re currently dealing with increased healthcare expenses or not, here are some financial tips to prevent higher costs from getting the best of you.

How to Turn Things Around

1.  Review your healthcare – Take a look at your current healthcare and assess whether or not it’s still the best plan for your situation.  Talk with your HR or benefits manager about options with different premiums and out-of-pocket expenses to see if there’s a plan that better fits your budget.  Don’t be afraid to ask questions so you have a clear understanding of what kind of costs you will be dealing with.  Having a clear picture will help you prepare to meet expenses where insurance falls short.

2.  Plan for out-of-pocket expenses – Fit copays into your budget.  Say you just signed up for a new plan that has a $20 copay for doctor visits.  Adjust your budget to account for $20 a month.  Of course, you probably don’t visit the doctor every month (here’s hoping), but planning for it just the same will help if, for some reason, you get really sick and have to have several appointments within a short period of time.  That way, you’re more likely to go to the doctor, take the right prescriptions and get better, because the cost of it all isn’t an issue.

3.  Save up for medical emergencies – Major health issues are not fun, but financially preparing ahead of time will hopefully offer some peace of mind if you find yourself in harm’s way.  Start setting aside a little bit each month for medical emergencies, so you can tap into those savings instead of relying on retirement, loans, or credit cards to meet healthcare expenses.

4.  Work with a Money Coach – Take advantage of a financial wellness program where you can get confidential, personalized, guilt-free, one-on-one financial coaching.  Together, you will determine and focus on your particular financial priorities, create an action plan tailored to your lifestyle, and cultivate positive financial habits.

As the statistics show, problems in one area of finance (e.g. healthcare costs) have a way of affecting all areas of finance, and they play a huge part in your overall health.  Money Coaches have multiple certifications and topic specialties, so they’re equipped to help you through any life stage, with any financial topic: student loans, debt management, divorce, home purchase, disability, tax planning, and credit, to name a few.  More particularly, you can discuss insurance terms, how to use your HSA or FSA, and how to create a budget that takes every health expense and financial goal into account.

Your Money Coach will help you not only learn how to make the most of your healthcare benefits, but also learn how to make the most of your finances overall.  The first step is easy, call 888-724-2326 to get started.

1“By The Numb3rs.”  EBN Nov. 2015: 42.  Print.

*Article statistics are from Employee Benefit Research Institute’s Health and Voluntary Workplace Benefits Survey, found in EBN magazine (source listed above).  For more on the study, visit ebri.org.