Including Health Care as Part of Your Financial Considerations (Sponsored by Aflac)

Ever since moving to Colorado, there have been a ton of expenditures. First, the biggie: I needed to buy a car. But then there is also tons of gear that I had no use for in NYC that seems imperative in Colorado: hiking boots and apparel, a high-end sleeping bag, a tent, my own ski gear (rather than rentals)… the list goes on. It seems like every week I am shelling out for something new, and my bank account is definitely starting to feel it! Then there’s also the fact that I am trying to save to buy a house here so I can finally stop renting, but most homes here start in the 300s… it is not an easy housing market! I’ve definitely heard a ton of jokes about how much money I must be saving by moving from NYC, but so far, I haven’t really seen it.

Of course, I count myself lucky that I have a great job and that I have disposable income for all this outdoor gear (which I do realize is not actually a necessity). According to this article called One Emergency Away From Financial Disaster, 76 percent of Americans live paycheck to paycheck – a number that was much higher than I expected. From that article I also learned that millennial workers’ finances are especially precarious, and healthcare emergencies are an area they are particularly unprepared to deal with. The 2014 Aflac WorkForces Report found that only 15 percent of millennial workers agree that managing health care expenses is an important part of their financial plan, and 19 percent say they don’t consider health care expenses a part of a financial plan at all. I have to say, I am guilty of not really thinking about health care when I am analyzing my financial accounts!

The WorkForces Report also found that 35% of millennials have less than $500 to pay for out-of-pocket expenses associated with a serious illness/accident… and that stat hit pretty close to home for me. Being fairly young and fairly healthy, I am on the high deductible health care insurance plan through my work. I max out my contributions to my health savings account so that I have a cushion in case of emergency, but last summer when I slipped a disc in my neck, it completely wiped out my health savings and forced me to pay out of pocket for a lot of my medical care. Not good!

So what to do? Well, for starters, it’s important to educate yourself about how your insurance deductible works. Choosing a plan with a low monthly premium and a high deductible may give you more money in your paycheck, but could also result in unaffordable payments if you need medical care beyond covered preventive services. A coworker put together a cool spreadsheet years ago that I continue to use to figure out what plan makes the most sense for you/your family – basically, it asks for how many times you go to the doctor each year, what the out-of-pocket cost is, then calculates whether you’re better off with a high deductible plan (where you pay per visit) or a fully-managed care plan. Whichever way you go, it’s also important to prioritize contributions to a health savings account (if your company offers one) just the same way you prioritize 401k contributions. HSAs usually accept pre-tax contributions, so you’re getting more for your dollar putting money there than into a regular savings account (broad generalization – speak to a financial advisor about your own unique situation).

Thank you to Aflac for sharing all this information with me, and reminding me to to more closely review my own health care planning. For my company, open enrollment (when you can change your health care plan) isn’t until May, but October is a common month for open enrollment for many companies that have the calendar year the same as the fiscal year – so make sure you are doing your homework and making the best choices possible. Your health is priceless – don’t skimp on saving for it.

I was selected for this opportunity as a member of Clever Girls Collective and the content and opinions expressed here are all my own.