Modern family with modern expenses
Four ways to plan your health care expenses

Money may not be everything but your overall wellbeing is highly dependent on your financial health. Financial security safeguards your future and acts as a safety net during any unforeseen circumstances. Although most of us may agree on this, the stats say otherwise, it is observed that nearly 50% of the Indian population just save about 0%-20% of their income, which can be quite low for long-term savings and future exigencies.

An average Indian family's health care spending accounts for 7% of their overall spending. This is because we do not adequately manage our budgets and completely disregard the value of health care programs.

It's easy to assume that health insurance can reimburse the bulk of our medical expenses and should therefore be ignored in the budget, a copay here, a premium there... it'll all be taken care of, right? The data tells us, it's not so easy. With out-of-pocket expenditures on the rise and the ever-present possibility that an unnecessary medical bill could make a dent in your income, it’s safe to say medical expenses should be a top budgeting concern.

You may be wondering how should one plan for healthcare expenses. So here are 4 ways you can stay prepared for your healthcare costs.

How do you breakdown your healthcare budget

When budgeting for medical bills, it's a good idea to break them down into three categories:

Fixed Premium: The first category includes those medical expenses that do not fluctuate over time. for e.g your standard insurance plan, medical premiums, etc. It is a fixed cost that you are aware of and there is no surprise on this.

Routine Expense: Although these expenses may vary from time to time, they are your expected healthcare expenses. Consider your annual checkup copay or the estimated expense of a routine prescription, a periodic lab test, or weekly doctor consultation, all these fall under routine expenses.

Unexpected Cost: These expenses are uncertain, unexpected, and unfortunate, such as an unplanned ride to the emergency department or an immediate surgical operation, these expenses can be impossible to foresee and often steal happiness.

Looking at how much you have spent on healthcare in the past makes it easier to predict your future healthcare expenses. You can start by looking at your insurance and healthcare provider receipts, as well as your bank and credit card statements to identify any healthcare bills you paid out of pocket previously. You should also take into account any expected medical procedure that you have previously planned and then finally draft your healthcare budget accordingly.

Choose the right health care plan that best suits your family

Most financial advisors say that all financial arrangements begin with a health insurance policy. Even before you start investing towards your goals, getting adequate health insurance cover for yourself and for your family can be very beneficial. You can choose from a wide range of health plans, including consumer plans, family floaters, and senior citizen health policies. As a result, you must first determine your needs before purchasing a health plan. Compare options based on rewards and expenses, and do your homework to find a package that meets your needs.

Here are a couple of other features you can look out for:

a) Look for the right policy coverage - Choose an insurance package that covers a variety of medical issues, such as pre and post-hospitalization care, emergency costs, serious disease coverage, maternity benefits, cashless service, regular hospital cash benefit, in-patient hospitalization, and so on.

b) Look for flexibility to add new family members - It is important to choose health care plans that are inclusive and easily adaptable to your changing lifestyle.

c) Look for the waiting period clause - Check the time frame after which the family insurance coverage will include pre-existing conditions and pick a plan with a short waiting period.

Safety Net with an Emergency Fund

Imagine having all your future plans fade away, and having to cut major costs even in everyday expenses because of one unfortunate medical emergency. This is where an emergency fund can act as a lifesaver. Firstly it is important to thoroughly understand your insurance plans and check out their actual coverage. You will come to realize there are quite a bit of expenses that would not be covered, for example, post-hospitalization cost, certain medical prescriptions, some medical conditions, etc. This is where your emergency fund comes in to fill these gaps. You don't have to take on loans or dig into funds set up for other financial purposes to cover unforeseen expenses. An emergency fund is basically a savings account set up to help cover a financial or medical emergency, such as surgery or prescriptions that are not completely covered by your insurance policy. Starting an emergency fund from scratch may seem a bit intimidating at first but it’s best to start small and set a realistic target for yourself.

Modern saving tips for a modern family

A modern family does require modern solutions. For example, a new-age health bank today not only provides you with security but promises an ROI, makes healthcare accessible, and innovates features that monitor and deliver solutions to address your true needs. In order to have an effective healthcare plan, you need to prioritize your healthcare savings first. It’s important to start saving for healthcare expenses as a “need” instead of a “wish”. There are many new-age apps, innovative technologies, neo banks that can help you get your health finances in order with few simple clicks. So it’s time you make choices that are safe for your health, your wallet, and your family with a simple and effective healthcare strategy in place. And with OCareNeo - The Digital Health Bank, you have it all in one App.

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