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In recent years, inflation has affected the cost of everything from housing to health care.
Since January 2021, overall inflation has increased by 20%, but health care inflation has increased by only 8%, according to Pacific Institute economist Wayne Winegarden.
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“For decades now, health care prices have risen faster than overall inflation,” Weingarten said. “Inflation creates significant affordability issues for families and can further exacerbate health care costs. After paying for food and utilities, there is less income available to cover unexpected medical costs. That’s it.”
You can stay ahead of rising prices by being proactive, maximizing your health insurance coverage, and looking for ways to save money.
Here are four ways to plan for health care costs in an inflationary economy.
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Understand your medical coverage
To stay ahead of the curve, take a close look at your current health insurance policy. Rising medical costs can also lead to higher premiums, higher deductibles, and higher out-of-pocket costs.
Check your plan’s coverage and see if there are any gaps in coverage. If your enrollment period is approaching, take the time to compare different health plans and tailor your coverage to your anticipated needs.
“Health savings accounts are only available if you also have a high-deductible health plan,” said Jordan Thiel, CEO of Everly, a life insurance company. “You may want to consider purchasing an annuity with features that speed up payments in the event of a major medical event.”
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Budget for cost increases
Find your average medical spending and round up to account for inflation. For example, if you typically spend $120 on a doctor’s visit, increase that amount by 3 to 5 percent to include it in your medical expenses.
“It’s also important to consider your health during your working years and adjust your long-term plans,” said Jesse Chadd, chief wealth officer at Aspire Wealth Partners. “Things to consider are ongoing symptoms that require professional or treatment, dental care, vision care, family history, and personal health history.”
Remember to plan for the unexpected. According to the National Institutes of Health (NIH), health care costs increase rapidly after age 50. Older people (age 85 and older) spend three times more on health care per person than people ages 65 to 74.
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Paul Tyler, host of the podcast “That Annuity Show,” said, “Health care is the biggest expense in retirement.” “Unexpected expenses related to bad health habits can lead to unexpected expenses and even bankruptcy in retirement.”
Let’s be proactive
According to research from the Kaiser Family Foundation, “Evidence-based preventive services save lives and improve health by identifying diseases early and treating them before they develop into more complex and debilitating conditions.” Research shows that it can be improved.”
You can do your part by taking advantage of regular health checkups, immunizations, and early checkups covered by your health insurance plan.
“The U.S. Medicare system tends to be affordable for most people I talk to,” Chad said. “Some things are not covered, such as good lenses for cataract surgery. But overall, my customers tell me they love Medicare and their coverage. What’s hard to predict is that It’s about how the system continues to evolve over time.”
Purchase medicines and services
Weingarden said inflation affects the cost of prescription drugs. The current pricing system is opaque and can lead to “strange” results.
Weingarten explains that pharmacy benefit managers (PBMs) now typically work for insurance companies that are part of the same conglomerate, negotiating discounts off the list price of drugs. It is said that there is.
“The price most insurance companies pay is about half the list price,” Weingarten says. “Patients, on the other hand, pay coinsurance premiums from inflated list prices. This means that while insurance costs are well controlled, patient costs are inflated.”
Although you can’t control drug prices, you can use comparison tools and discount programs to shop for lower prices and find better deals. If possible, consider generic alternatives to brand-name drugs, which can reduce overall health care costs while maintaining standard of care.
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This article originally appeared on GOBankingRates.com: 4 Ways to Plan for Health Care Expenses in an Inflationary Economy
