|October 2021||Maximixe your HSA e-Newsletter||Vol. 17, Issue 13|
Creating Your 2023 Personal Healthcare Budget
- Health Insurance Open Enrollment is beginning this month, on October 15th. This is the time of year to make changes to your health insurance if you need to, like find a cheaper plan or add more coverage.
- It’s time to start thinking about your overall 2022 personal healthcare budget. Your health insurance plan is only the first part of this; Creating a rock-solid healthcare budget means taking a number of things into consideration.
At HSA for America, our mission is to help people make the best financial decisions about their healthcare, so they can live a healthier, wealthier life.
With that in mind, we’ve put together a few tips to help you get started:
2022 Healthcare Budget Checklist
1.) Assess Your Health to Determine How Much Coverage You Need
The first and most important step in making a healthcare budget is determining your essential health needs. You’ll need to consider things like:
- Any previous or existing conditions
- Any medications you take
- How often you use your health insurance
- Upcoming health needs, like pregnancy, dental work, etc.
It’s important to be realistic about your needs, so you don’t end up under-insured when you need it the most.
2.) Find Out How Much You Can Afford to Pay for Healthcare
For this step, start by breaking your potential healthcare costs into 3 categories:
- Monthly Premium – The amount you’re paying every month for your plan.
- Out-of-Pocket Costs – Your estimated copays, coinsurance payments, or prescription drugs.
- Your Deductible – The amount you’ll need to pay before your insurance kicks in.
One of the biggest questions to ask is whether you will be able to come up with your deductible payment if you need to.
It can be easy to assume that the health insurance plan with the lowest premium will be the most affordable. But in many cases, paying a slightly higher premium will reduce your deductible significantly.
3.) Create Your Emergency Fund
The common rule of thumb with emergency funds is to have at least 3 months’ worth of expenses. But the truth is, this number will depend on your lifestyle, your monthly costs, and how many people are in your family.
It’s not a bad idea to make sure that there is enough money in your emergency fund to cover your deductible. If you or someone in your family gets into an accident, you’ll have the money to take care of those bills before they become a stressor.
4.) Use a Health Savings Account (HSA) to Save, Protect, and Invest
Tax-advantaged Health Savings Accounts make it possible to save pre-tax money for future health expenses. Any money you put into an HSA is taken before payroll taxes, and then it’s allowed to grow on a tax-deferred basis.
As long as you use your HSA funds on qualified medical expenses, you’ll never pay a dime in taxes. You can even use the funds in your HSA to cover your deductible, if need be, making the HSA a sort of specialized health emergency fund.
Remember to fully fund your HSA each year in order to maximize your investment. If you’re making the full contribution and not spending your HSA money, it can easily turn into a few hundred thousand extra bucks to spend on healthcare when you’re older.
5.) Contact Your Personal Benefits Manager if you Need Help with Your Plan
As a client of HSA for America, you have ongoing, no-charge access to our team of health insurance professionals. Your Personal Benefits Manager can help you compare rates, switch plans, or even explore some alternatives to health insurance.
Ready to jump in? Click here to get a free health insurance quote for your area.
Want to learn more about investing in a Health Savings Account? Check out our Complete Guide to HSAs.
Click here to schedule an appointment, or call 800-913-0172 to get started.
To your health and wealth,
Wiley P. Long, III
President - HSA for America
The HSA for America Maximize Your HSA Newsletter is published monthly and emailed to subscribers at no charge. Subscribe now to stay on top of the critical information you need to know about health insurance, healthshare plans and managing your finances to achieve financial security.
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