5 ways to prepare for out-of-pocket health and wellness costs

According to McKinsey & Co., 82% of U.S. consumers consider wellness a top priority, with more than half saying they prioritize it more than they did a year ago.^[i] However, rising healthcare costs pose significant challenges to consumers, and an unpredictable healthcare payment landscape can leave them with substantial out-of-pocket expenses.

These expenses can force people to forgo the care they want or need, leading to poorer health outcomes.^[ii]

Given these realities, it’s important to consider the following steps to inform financial decisions about potential out-of-pocket health and wellness costs.

1. Research the cost of your procedures or services in advance. Many websites provide estimated costs of various procedures by region or provider. You can also get estimates by calling your insurance company or the provider directly in advance of your appointment.

2. Check if you qualify for subsidized coverage or financial assistance. People with incomes below certain levels may be eligible for health coverage at reduced or no cost. Hospitals may offer free or discounted care, known as charity care, to people not able to pay.

3. Confirm with your provider and insurance company that you are maximizing health plan coverage. Take advantage of your annual benefits, including getting recommended preventive screenings and visiting in-network providers that usually cost less than those who are out-of-network.

4. Enroll in an employer-based program that uses pre-tax dollars. Flexible Spending Accounts (FSA) and Healthcare Spending Accounts (HSA) allow employees to set aside money from their pay for qualified medical expenses.

5. Consider promotional financing options. Health and wellness credit cards, such as CareCredit, that offer deferred interest financing, enable you to pay for care over time with the opportunity to avoid interest charges, making out-of-pocket costs more manageable. Here are a few things about deferred interest financing to consider:

0. • Deferred interest: No interest is assessed if the balance is paid in full by the end of the promotional period.
   1. How deferred interest promotional financing works. Deferred interest financing allows consumers to avoid interest charges on larger expenses if they are paid off before the promotional period ends. If you don’t pay off the full balance before the promotional period ends, you will have to pay interest that has accrued as of the transaction date.^[iii]
   2. The required minimum monthly payments. Understand the required minimum monthly payments and if those payments will pay the balance off in time. Online calculators, such as CareCredit’s payment calculator, are a valuable resource to estimate possible monthly payments needed to pay off the balance within a given promotional period. Those payments may be more than the lender’s monthly minimum payment requirement.
   3. Mark your calendar for when the promotional period ends. It is important to track and pay the balance of the purchase before the end of the promotional period to avoid paying the deferred interest that has accrued on the purchase.

In the end, it’s important that people have access to health and wellness care for themselves, their family and pets. As healthcare costs continue to rise, it is critical consumers be aware of the various benefit programs and payment options to plan for health and wellness costs. Financial literacy is key!