Credit cards and doctors visits
I was reading over on CNN Money this weekend that a health care market research company is seeing a growing trend in consumer use of credit cards to pay for medical bills. Due to high unemployment and ever increasing health care costs, consumers are reaching out to credit in order to continue receiving health care. Now, here’s the scariest part: CNN also reported that health care industry watchers see a multi-billion dollar opportunity to offer specialized “medical” credit cards!
If you haven’t figured this out already, let me explain this simply: “Consumers” (That’s you folks) visit the doctor one day, and potentially pay for that doctor’s visit for the next 1-5 years.
Already, 25% — 74 billion or so — of the $294 billion spent on out of pocket medical expenses is charged to standard credit cards. With our current economy and jobless rates skyrocketing, this number is expected to grow quickly. A health care consulting company, McKinsey Consulting, expects this number to grow to $150 billion by 2015.
How can you avoid having to use a credit card for medical expenses?
Here are just a few ways you can avoid using credit cards to pay for your medical expenses:
- Have a medical emergency fund – Start saving money to a medical emergency fund. Use this fund to cover unexpected medical costs. Learn more about specialized emergency funds.
- Set-up a Flexible Spending Account or Health Care Savings Account – Not only do these specialized savings accounts reduce your taxable income, they also can cover your medical expenses. I’ve used an FSA (Flexible Spending Account) for the past 10 years and found it to be a powerful too for saving money and covering required medical expenses. Learn more about Health Care Spending Accounts from Cash Money Life.
- Budget for medical expenses – First, if you don’t have a budget, create a budget. Make sure you include an expense category for planned medical expenses. This category would include any prescription medicines you require, over the counter products, upcoming doctor’s appointments, etc. Accounting for these costs in your budget allocates money for those expenses and will keep you from having to use credit cards.
- Talk to your doctor – If you’re struggling financially right now and feel you might not be able to cover medical costs without resorting to credit cards, talk to your doctor. Doctors can often reduce their expenses, provide tips for getting lower cost health care, or refer you to services that can assist you with medical expenses. Don’t be ashamed to ask! Medical costs are expensive.
What are your thoughts on this? What tips can you share with other readers to soften the blow of medical expenses? Add a comment!
Photo by: dionhinchcliffe