Ask Natalie: How to cut your health care costs in half

Column by Natalie Pace

Health Insurance costs have doubled since 2013. The average person spends almost $5,000 a year on health insurance; annual family health premiums total $12,252! And that’s just the insurance side of the equation. Once you add in the cost of health care (your deductibles, coinsurances and unqualified costs), an average family could be spending $20,000 or more each year.

When you retire, Medicare has out-of-pocket costs including deductibles, coinsurances and uncovered services (like acupuncture and long-term care), and even premiums if you want a better plan. A Fidelity study claims that the average couple will need $280,000 to cover medical bills when they retire.

Fortunately, there is one simple trick that can cut medical costs dramatically, while providing far better for tomorrow. The sooner you get this information and activate it in your own life, the more you’ll save now, and the more money you’ll have squirreled away for when you need it – when you get sick or retire. (If you are already retired, you don’t qualify.)

My one simple trick is the Health Savings Account. This, combined with the two additional strategies that are listed below, can put the odds in your favor that you can live a richer life today and even have more dough for bucket list vacations.

Three strategies to cut your health care costs in half (or more)

1. Save thousands (tens of thousands for some) annually with smarter health insurance choices. If you are healthy and spending an arm and a leg on health insurance, then you should consider getting a catastrophic health care plan, which could cut your health insurance expenses in half or more, combined with a health savings account. The health savings account is where you’ll start building up the funds for the ultra-high deductible. As the years add up, you’ll find that you have the money built up in your HSA for your own long-term care (something that isn’t covered by Medicare). You get a tax credit for the HSA, and can even invest the funds to earn money while you sleep. Learn more about HSAs in my blog and at IRS.gov.

2. The best long-term health care plan. The Health Savings Account is your best long-term health care plan. Health insurance cancels if you miss a payment. Your HSA stays with you through thick and thin, no matter where you work, and acts as a great supplement to your retirement account.

3. Health is the best health insurance. The truth is that eating right and exercising goes a long way toward reducing your health care costs and increasing your income. (You can’t work if you can’t get out of bed.) Almost 40% of American adults are obese, with 18.5% obese children. The price tag of obesity is over $147 billion, adding about $1500/year, at a minimum, to personal medical costs.

Getting an HSA is not an extra bill. It is one of the easiest ways to put money back into your family budget by cutting your health insurance premiums (many times by half or more), while also reducing your tax bill. (HSAs offer a tax credit.) If you are healthy and spending an arm and a leg on health insurance, then you owe it to yourself to learn more.

If you wish to continue reading more of Natalie Pace’s blog or to access links to the data, click here.

Do you have a budgeting, investing or economic questions for Natalie Pace? Simply email info@NataliePace.com.

Natalie Wynne Pace is the author of the Amazon bestsellers The Gratitude GameThe ABCs of Money and Put Your Money Where Your Heart Is (aka You Vs. Wall Street). She has been ranked as a No. 1 stock picker, above over 835 A-list pundits, by an independent tracking agency (TipsTraders). The ABCs of Money remained at or near the #1 Investing Basics e-book on Amazon for over 3 years (in its vertical). Natalie Pace’s great, great grandfathers James Pace and Lorenzo Wright were some of the original pioneers of Graham County. Call 310-430-2397 to learn more about Natalie Pace’s books, private, prosperity coaching, and 3-day Financial Empowerment Retreats.

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