5 Ways to Get Financially Prepared For Medical Emergencies

Medical inflation is here to stay. Its global trend is reported to step up from 8.8% in 2022 to 10.0% this 2023. With this projection, healthcare and insurance costs are expected to increase further.

Without financial preparedness, medical inflation may result in excessive debt, personal bankruptcy, and other setbacks that hurt your finances and affect your optimal well-being.

Get financially ready for any medical emergency and beat medical inflation in these five ways:

Public Healthcare

Take advantage of public health care in your country. This government-run program usually aims to help all citizens access low-cost medical services. However, most of the time, they prioritize older people, people with disabilities, and economically marginalized individuals.

Medicare is a good example of a publicly funded healthcare system. It’s been used as universal healthcare in many countries, including the United States, Canada, and Australia. Compared to other health plans, it’s much more affordable and sometimes free, especially for the priority groups.

Unfortunately, public health care isn’t without drawbacks. They’re usually notorious for their:

• Longer waiting period
• Overcrowded facilities
• Limited treatments
• Low-quality medical care and services
• Medical errors

Despite these downsides, investing in your country’s public health care is better than having nothing. It’s a cost-effective way to financially secure you and your family against the rising medical costs.

Private Health Plan

Private health insurance can help fill the gaps that public healthcare lacks. Its benefits include lower out-of-the-pocket medical costs, shorter waiting periods for hospital admittance and elective procedures, and individualized medical care.

However, many private health insurance policies don’t cover many medical conditions and diseases, especially critical illnesses. If you need care that falls into one of the gaps, you’ll likely be on your own when paying for their treatments and medications.

In addition, private health insurance is much costlier than public health care. To pay less, consider removing part of the coverage you don’t need. Additionally, look for a company that offers a health plan that only requires you to pay for at least 50% of the premiums, or better, free of charge.

Emergency Funds

An emergency fund is your cash reserve or liquid assets specifically set aside as a safety net against any unexpected but necessary expenses or financial emergencies. It can be used for sudden hospitalization and prescribed medications.

Setting aside an emergency fund that’s as much as your three-month living costs is recommended. It could be financially hard to reach this amount for others, so try to build it up over one year instead of immediately setting the entire target aside.

There are many ways to save for your emergency fund, but here are two of the most common ways:

1. Allocate a fixed percentage of your monthly income for emergency funds
2. Save tax refunds, cash gifts, annual bonuses, and other cash windfalls as emergency funds rather than spending them

If you think you won’t use your emergency funds soon, stash them in high-yield savings accounts, money market accounts, or certificates of deposit (CDs) instead of regular savings accounts. Doing so will help you grow your emergency funds.

Discount Cards

If you don’t have insurance or lack prescription coverage but have to buy medicines, one way to save is through prescription discount cards. They’re designed to offer up to 80% savings on most prescription drugs, including brand-name and generic medicines.

Some participating stores and pharmacies offer a free drug discount card to their loyal consumers, while others require membership fees. They also target people who self-pay (100% out-of-pocket), uninsured and underinsured, and pet owners.

Note that prescription discount cards aren’t replacements for any health insurance coverage. Although they help lower out-of-pocket expenses, the savings are only on medicine costs, not including other healthcare treatments.

Drug Coupons

Another way to save on medication costs is through prescription drug coupons. Drug manufacturers, doctors, and pharmacists often distribute them as part of marketing brand-name or new medicines.

However, unlike most discount cards, drug coupons have expiration dates and refill limits. They also exclude individuals who have government-run healthcare insurance, such as US health insurance programs Medicare and Medicaid.

Savings from drug coupons may also vary from one pharmacy to another. In other words, coupons aren’t guaranteed to give you the same savings. Although they lower your out-of-pocket costs on medicines, they only do so by a fixed amount.

Final Thoughts

Healthcare costs have risen much faster than the general inflation rate, and this trend shows no sign of slowing. Build financial resilience against today’s high medical costs with a mitigation plan armed with health plans, emergency funds, discount cards, and drug coupons.

More importantly, the best kind of health insurance is a healthy lifestyle. Consume a nutrient-dense, balanced diet, stay well-hydrated, strive to maintain a healthy weight, exercise to boost and preserve your health, get enough sleep, and take that well-deserved break.