Even the most organized and financial competent people experience unexpected medical bills that could disrupt their budget. A simple eye infection that requires immediate treatment could cost $100-$200 at a walk-in or minute clinic. If you have insurance, that cost could be as low as $20 for the co-pay, but you may still be required to pay $80-$100 for the antibiotic eye drops if your prescription insurance plan has a high deductible.
Without insurance, you’ll be responsible for the entire bill. Many clinics require payment upfront, so you may be faced with an unexpected expense that could pull hundreds of dollars out of your budget. This could compromise your ability to pay other bills as well.
There are a few things you can do to prepare for this type of unexpected expense that will help reduce the stress and financial problems associated with illness and accidents.
Flexible spending accounts
Ideally, when you chip a tooth, break a bone, or come down with a bad cold, you could go to a clinic or your doctor’s office without borrowing money to pay the bill. For most Americans, seeking medical care comes with anxiety about how to pay for it.
Many employers offer programs which allow you to contribute on a pre-tax basis to a flexible spending account or FSA. An FSA lets you make contributions to an account and the money can be used when needed for unforeseen medical or dental issues. Since you are contributing pretax, your overall taxable income is lowered as well.
If you aren’t contributing to an FSA, then having an emergency fund is a smart way to prepare for unexpected medical and dental expenses. Look carefully at your monthly budget and put away a predetermined amount each paycheck to build your fund. Are there areas where you could reduce spending and free up some cash for your emergency fund? Saving $20 each week would create a $1,040 emergency fund in just one year.
Personal installment loans
While it may be tempting to charge an unexpected medical or dental bill to your credit card, interest rates on this type of financing can make it difficult to pay off the debt, especially if you’re only making minimum payments. Also, some people resort to tapping their retirement accounts to cover these costs, which can trigger penalties and income tax consequences.
A personal installment loan offers a set interest rate, set term, and predetermined, even monthly payments that are easy to put into your budget. Before charging a credit card or dipping into retirement or savings, investigate the option of taking out a personal loan.
Telemedicine and prescription card programs
There’s no need to pay full price for prescription medications, even if you don’t have any type of health insurance. Prescription discount cards can reduce your out-of-pocket expenses for prescriptions by up to 90%. If you don’t have a discount card, ask your doctor or pharmacist if they can help you find one to help you reduce your overall healthcare costs.
Alternatives to traditional health insurance can also help uninsured or underinsured people get the medical care they need. Telemedicine programs like My Doctor Plan are inexpensive, easy to use, and allow you to have access to a doctor by phone or online anytime. Sunset Finance offers prescription card programs and Telemedicine as optional add-ons to the other services they offer.
Accidents and illnesses are something that everyone deals with at some point in their lives. While we may not know for sure when it will happen, we can take steps to be financially prepared for inevitable unexpected medical and dental expenses.