For far too many people, receiving medical care leads to a financial nightmare. Medical debt is a pervasive challenge for families in the United States, and our current healthcare system is inaccessible and unaffordable for thousands of low-income earners.
Yes, this crisis is daunting, but there are small action steps you can take to negotiate medical bills today and manage medical expenses in the future.
Often, you can negotiate reasonable repayment plans to reduce costs. Here’s how:
Many health insurance companies and financial institutions offer a Health Savings Account (HSA). With an HSA, an individual can set aside money pre-tax through a payroll deduction or post-tax on their own for qualified medical expenses.
An HSA can be used to cover expenses not covered or reimbursed by insurance. Qualified medical expenses include deductibles, copayments, and other items under IRS Pub. 502.
You will need to enroll in an “HSA Eligible” High Deductible Health Plan (HDHP). Individuals, their family, or their employers can contribute to an HSA. Contributions by individuals are tax-deductible. Employer contributions may reduce taxable income.
One good thing about an HSA is that they offer tax-advantages which can be particularly helpful in retirement. However, if you are struggling to get by month-to-month or cannot afford a high deductible, this may not be the best option.
If you decide that an HSA is not the right fit for you, we still encourage you to evaluate your current savings plan for medical expenses.
Money Management E-Newsletter: September 2019