by John Savage, Author, CFHC
Health
This is an area where I have helped many individuals across the country when it comes to finances. Health care continues to be one of the top expenses for families living in America today. On average, health care expenses can easily amount to more than 10 percent of a family’s annual cost. And now, with the new government reach into people’s finances, you have to maintain proper health care coverage because if you don’t this can be another potential tax liability due to no fought of your own.
I am constantly working with families to find ways to navigate health care expense or cost based on their individual situation. With that said, here are some areas peoples finances have been affected in relation to their health.
Monthly Premiums - too expensive and causes them to have a shorter paycheck than what they can reasonably afford. Some people are paying as much as $1000 a month before they received there take home pay. cost continue to rise as insurers find ways to minimize, reduce, and cut their own expenses in order to maintain a certain level of share of cost between patient and insurance provider.
Company error in monthly premiums or missed premiums - the employee will pay for the mistake buy seeing a lump sum of money come out of their check without any regard to how it can affective them and their family financially. As health care cost have become more complicated and seemingly volatile, what patience have to pay upon seeing a provider or having services rendered or administered to them, has also become more complicated and confusing at times. This is one reason some employees who have the opportunity, take advantage tax benefit plans such as FSA's and HSA's. Money can be earmarked for covering specific health car copays, deductibles, or other service fees as they arise, all while being able to lower ones taxable income.
Usually, the HSA is designed for those under a High Deductible Insurance Plan and FSA is a more flexible plan but if you don't use what you put into by the end of year, you loss the money that is in it and that goes back to the employer.
Health Issues – due to some unforeseen diagnosis, sickness, or even stress on and off the job, many individuals have experienced a loss of income because they have taken time off work to rest or seek treatments. Some individuals go on Short-Term Disability in some cases to get the care they need so they can rest and recover. When this happens, disability only covers about 2/3 of their original pay and in some cases about 50 percent. People are denied any disability as a general rule. Not receiving a paycheck due you for 6 months or more is stressful and financially devastating for so many families across the country.
High Deductibles – this is where you pay out of pocket a significant a mount of money up front, before the next tier of benefits with your insurance plan will kick in. Depending on the care needed and any ongoing treatments or testing, this can be very costly for many individuals as well. Also, timing and where you choose to receive care on an annual basis can affect coverage and out of pocket expenses as well.
Delayed Appointments – going into a new calendar year is another situation I have seen where patients have been neglected or not properly serviced due to appointment being cancelled at the end of the year. This happens right when they were about to meet their deductible and have specific care covered by their provider instead of having to come out of pocket. This too, causes a lot of financial stress.
Unexpected Medica Cost – sometimes providers are not upfront about their fees they are charging their clients or they themselves are not sure about the cost the patient is to cover and the portion that the insurance provider is to be covering. This often results in higher charges to the patient than what they were told or confirmed prior to their appointment.
Chronic Health Conditions – this is another area that can and often does, affect an employee’s ability to work and earn a livable wage. This loss or lack of income both short-term and long-term can have financially catastrophic affects leaving one trying to figure out how to navigate living off a limited budget.
Medicare Changes – this is sometimes a challenge when it comes to cover out of pocket cost from year to year, especially since some providers will add services to a network while others may discontinue services within a particular network. You will often find these types of situations with Medicare Advantage Plans (formally known as Part C of Medicare). These plans often help with filling in the gaps of what is or is not covered under the standard Medicare coverages. Many individuals I have worked with did not realize this was available or even an option in their specific area.
This is where Unwind Financial Consulting Services comes in. We can help navigate certain challenges such as how to budget, finding the right resources, or suggesting alternative options to your specific circumstance including referring you to an agent or agency that may be better equipped to help you navigate your current financial situation.