41% of insured Americans avoided medical care due to cost

This is not a good thing at all.

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Key points

• Even US policyholders are struggling to cover their health care bills.
• It’s important to save money for medical bills so you don’t have to skimp on the care you need.
• Adding to your emergency fund, having a savings account dedicated to medical expenses, or even opening an HSA can help.

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There’s a reason why going without health insurance is a dangerous thing. Without insurance, you could face astronomical medical bills if you get sick or injured and end up in hospital. In fact, your bills could go up in this scenario even if your situation isn’t serious enough to warrant an ER visit.

But while it’s clear that people without health insurance could struggle to cover their medical costs, new data reveals that even those with insurance companies are struggling to meet their expenses. In a recent Policygenius survey, 41% of Americans who have insurance avoided seeking medical care due to the costs involved. And that’s problematic.

Avoiding medical care could mean putting your health at risk. It could also mean costing you more money by letting minor issues fester.

Imagine skipping a visit to your local urgent care clinic to avoid the $40 copayment you’ll incur. If the infection you have ends up getting worse, you could end up in the hospital and end up with a copayment of $500 or more.

This is why it is so important to put money aside to cover health costs. This way you won’t have to do without care when you need it. And here are some options to consider in this regard.

1. Boost your emergency fund

Ideally, you should have money set aside to cover emergencies, such as job loss or home or car repairs. If you inject extra money into your emergency fund, you’ll have more of a cushion in case medical bills start to appear.

2. Have a savings account dedicated to medical care

If you want to be absolutely sure that you will be able to receive the medical care you need, open a savings account dedicated to health and fund it as well as possible. You should aim to put enough money in this account to, at a minimum, cover your annual deductible. It’s the amount you’ll have to pay out of pocket before your health insurance company starts paying the bills for the services you need (although preventative care isn’t usually subject to a deductible).

3. Open an HSA

To qualify for a Health Savings Account, or HSA, you must be enrolled in a high-deductible health insurance plan. In 2023, that means having an individual deductible of $1,500 or more, or a family deductible of $3,000 or more.

If your plan qualifies, an HSA saves you money on a pre-tax basis for healthcare costs. Any HSA funds that you don’t need to use immediately can be invested for further growth, and your account earnings will not be taxed. Then, withdrawals are tax-free as long as they are used for eligible medical expenses.

Best of all, unlike Flexible Spending Accounts (FSA), HSA funds never expire. You can put money in an HSA in 2023 and make your first withdrawal in 2043, and that’s fine.

Avoiding medical care is a dangerous thing to do. If the cost of care prevents you from meeting your health-related needs, do your best to start putting money aside for health care – either in an emergency fund, a savings account separate or an HSA.