Insurance Basics

Budget tips for healthcare costs

7 MIN READ

We believe healthcare costs should always feel manageable. That’s why we’ve identified three key ways to create a better healthcare budget and help you save for whatever’s next.

1. Understand how your healthcare plan really works

Your healthcare plan comes with many benefits. It’s important to know how those benefits work and what’s included in your plan so you can take advantage of what’s offered or even available to you at no cost.

To understand your healthcare plan, it’s important to know what’s in-network and covered under your benefits. This means you’ll need to ensure that each doctor, hospital, lab, pharmacy and other healthcare providers you visit are in-network.

But this also means that when a doctor suggests a particular prescription, it can be worth taking the time to find out if it’s in your formulary—the list of drugs your plan covers. If the prescription is covered, you may see significant cost savings at the pharmacy. If it’s not covered, it’s worth asking your doctor or pharmacist for an alternative or generic option. You can find Credence’s full list of prescriptions covered here.

To learn even more about how your healthcare plan works, you can check out more Health 101 articles here.

2. Open an HSA with your bank

If eligible, a Healthcare Savings Account (HSA) is a great option for paying for your healthcare expenses with pre-tax dollars. In order to contribute to an HSA, you must have a benefits plan that meets the annually determined federal requirements.

An HSA is a bank account used for a wide variety of healthcare expenses, from doctors and ER visits to prescription and over-the-counter drugs. The best part of an HSA is that you own the account in its entirety. Meaning the funds in your HSA account carry over year-to-year and stay with you even if you change employers or retire.

It’s important to note that healthcare plans with an HSA don’t have insurer-negotiated, reduced costs, such as a copay for appointments or savings on prescriptions. You’ll be asked to pay a full amount for each visit or each prescription, but you can use your HSA card for almost any of these costs.

An HSA is a great savings tool both for covering everyday expenses and long-term healthcare expenses for retirement. Some HSA benefit plans even include employer contributions, which can help you get ahead of those everyday expenses in the long run. Meaning that, over time, an HSA can be a great investment for you and your family.

3. Use an HRA to help cover most out-of-pocket costs

If eligible, a Health Reimbursement Account (HRA) is another great option for paying for your healthcare expenses with pre-tax dollars. In order to take advantage of an HRA, you must have a benefits plan that meets the annually determined federal requirements.

An HSA is a bank account used for a wide variety of healthcare expenses, from doctors and ER visits to prescription and over-the-counter drugs. The best part of an HSA is that you own the account in its entirety. Meaning the funds in your HSA account carry over year-to-year and stay with you even if you change employers or retire.

An HRA is an employer-sponsored account that is solely funded by employer contributions. Employees and their covered family members can use the funds for eligible medical expenses. Your HRA gives you the opportunity to manage your healthcare expenses in partnership with your employer.

It’s important to know that your HRA can only reimburse you for qualifying healthcare-related expenses—but those expenses are often wide-ranging to include the majority of your annual medical needs.Your organization determines which healthcare expenses are eligible. It can vary by plan design, but common eligible expenses include deductibles, coinsurance and copays.

Suggested Articles

Related Assets