31 Days to Financial Independence (Day 13): Trimming Your Spending – Health Care

“31 Days to Financial Independence” is an ongoing series that appears every Thursday on Money360. You might want to start this series from the beginning!

Last time, we continued looking at the average American family budget, going through each category and examining how one could trim the cost of typical expenses in that category. Here’s the “average American family budget” that we’re looking at, along with links back to the earlier entries on those specific areas:

Housing – $10,080
Transportation – $9,004
Taxes – $7,432
Utilities – $7,068
Food – $6,602
Insurance (including things like pensions) – $5,528
Debt Payments – $5,252
Healthcare – $3,631
Entertainment – $2,564
Cash Contributions – $1,834
Apparel and Services – $1,604
Education – $1,138
Vices – $775
Miscellaneous – $664
Personal Care – $608
TOTAL – $63,784

Today, we’re going to take a look at health care spending. As you can see from the budget above, the average American family spends $3,631 per year on health care. That averages out to about $300 per month. Remember, however, that this “average American family” includes single adults, married couples without children, and families with children, too. In other words, a single person is probably coming in below that, whereas a large family (like ours) is probably coming in above that.

Exercise #13 – Trim Your Health Care Spending

The rest of this article consists of a long list of specific tactics that you can use to trim your food costs. As with the other savings articles in this series, it’s important to remember that everyone lives a somewhat different life and thus some of these tactics are going to seem useful and sensible to you, while others will seem like a stretch to you, and still others won’t apply at all. That’s okay. Ignore the ones that don’t apply. Make an effort to adopt the most sensible ones. Then, give the others a trial run and see if it’s something that can work for you. Commit to some of the challenging ones for thirty days and see if they work, or apply them during the relatively rare situations when those costs come up.

Remember, your overall goal is to cut back hard on the areas of life that are less important to you – the shallows – so that you can afford the “deep” areas of your life both today and tomorrow. Health care costs, on the whole, are very important, but that does not mean there aren’t wasteful elements of how many people spend their health care dollars. Keep that in mind as you read each tip. Is this tip cutting back on something that’s really important to me, that amounts to a core life value? If not, why not cut it so that I can afford those things that really matter?

Also, not that we’re not discussing insurance here. Insurance was discussed as an entirely separate topic already.

Let’s dig in.

Buy generic or store brand medications when possible, both over the counter and prescription. Generic and store brand medications are often identical or very similar to name brand versions of medications, which means that you can buy and use such medications as a direct replacement for medications you already use. The advantage? Generic and store brand medications are virtually always substantially cheaper than the name brand version.

Whenever you visit a pharmacy or the pharmacy section of a store to purchase a medication, talk to a pharmacist about store brand or generic versions of the item you’re about to buy, just to make sure there aren’t any hidden differences you should know about. You’ll often find that it’s the exact same thing except that the price tag is a lot lower.

Eat a better balanced diet consisting of fewer processed foods. This is more of an “indirect” savings than a “direct” savings, but it’s still noteworthy. Eating a balanced diet with more vegetables and fewer processed foods is one of the few things that doctors and nutritionists tend to agree on in terms of your long term health. Such a diet has a positive impact on the rates of many, many diseases and ailments. It also has a positive impact on your weight, and approaching a normal weight itself has positive impacts on many diseases.

It’s not hard to do this. You don’t have to become a raw vegan. Just put one more scoop of veggies on your plate and one less portion of meat when you’re eating. Eat an apple for a snack instead of a candy bar. Skip the fast food and eat something at home. Make those substitutions regular, normal things. They don’t have to be “every time” things, but when you make them into regular choices, they’re going to have a greater positive impact on your health and thus a greater positive impact on your health care costs, particularly over the long term.

Again, many people overblow this and think that they need to become fully vegetarian or vegan and then reject the whole idea. Having one scoop more of vegetables and one scoop less of meat on your plate is a great step and doesn’t require you to have a diet of kale and carrots. Just shift what you do right now in a direction that involves more vegetables and fruits and you’re probably in much better shape right there.

Get some real exercise every day. The other major step that almost every doctor in the world agrees on in terms of reducing your long term medical costs is to get some real exercise on a very regular basis. Do whatever it takes to get your heart pumping a little each day and move around each day. You should be walking at least a few thousand steps every day, so a daily walk is a good idea. A daily workout of some kind is a good idea, too.

I have two fitness goals every day. The first goal is 10,000 steps, which I usually achieve with a walk around my town. The second is to start a daily workout, and usually if I’ve started that workout, I’ll finish it. I usually just do the daily workout from as it’s free, doesn’t require any equipment, and achieves the goal of getting my heart rate up and elevating my breathing.

Remember, you don’t have to become a workout guru. You don’t have to go to the gym and “die” to get into better shape. You just need to elevate your heart rate and get a little out of breath for a while. In fact, if you feel like you’re “dying,” that’s a bad thing as you’re overexerting yourself and creating negative feedback against exercise in your mind. Don’t do it. Find things that feel good and elevate your heart rate and your breathing. I find that the workouts do that, as do weights.

Participate in workplace and insurance wellness programs. Many workplaces and insurance plans offer programs where benefits are offered if you commit to certain wellness initiatives. Some workplaces, for example, offer pedometers and give insurance discounts to people who meet a certain step count threshold. Others offer financial incentives for weight loss.

Ask around your workplace – particularly the human resources department – for such initiatives, especially if you work for a large organization. It’s also well worth ing your insurance company directly to see if they offer such programs. If you can directly earn money or other benefits by losing weight or exercising, it becomes a double win.

Have regular wellness visits / healthy checkups with your doctor. Almost every insurance plan covers such visits in full, so they shouldn’t result in any out-of-pocket expenses for you. It is far cheaper for an insurance company to pay for wellness visits for a responsible person so that medical problems can be caught early and covered inexpensively than to pay for expensive medical care for someone who wasn’t taking care of themselves, so they make it as efficient as possible for people to take advantage of this.

So, take advantage of this. For you, those wellness visits are free (or very low cost – check with your provider). Go to them. If they do find a problem, it’s going to be cheaper and easier and less painful for you now than it will be later on when it becomes a true life challenge.

Take advantage of preventive care offered by the Affordable Care Act. Many elements of preventive care are offered special additional coverage due to the provisions of the Affordable Care Act. Many elements of treatments for common ailments such as diabetes are made much less expensive for people because of the ACA. Regardless of your feelings on the law, it’s financially beneficial for you, if you’re suffering from a chronic condition, to take advantage of those provisions.

Again, talk to your doctor. They know the details on the ACA and how it applies to your situation. Ask them about inexpensive ongoing care and preventive care.

Check on your insurance coverage for every procedure and look for alternatives for uncovered procedures. Whenever your doctor suggests an additional procedure of any kind, don’t just nod your head “yes” in a daze. First, ask your doctor about potential insurance impact as well as alternatives that might be covered. Second, talk to your insurance company about the procedure and your options.

It’s better for everyone involved – you, the doctor, and the insurance company – if you can find a treatment plan that takes care of your condition at minimal cost. However, everyone’s medical conditions are a little different, so it can take some time and effort to find that most effective treatment plan. Be an advocate for yourself and talk to all sides to find a solution.

Know your local emergency care providers. This takes a little bit of homework, but it can save you a ton of money in a pinch. Know what emergency care options are available in your community and how each of them work with your insurance. Make sure your insurance is accepted at a particular hospital and then know the relative quality of care at the hospitals where your insurance is accepted.

With just a little research, you can figure out pretty quickly where the best place for you to go for a medical emergency is in terms of balancing your out of pocket costs and the quality of care received there. Then, in an emergency, you’ll already know where you should go to get the best bang for the buck medical care.

Talk to your doctor about cutting prescriptions. Many people find themselves prescribed to medications to take care of ailments of various kinds. Sometimes, those ailments improve over time and don’t require as much medication or the same type of medication. Sometimes, those conditions are being overtreated by medication, or a short-term medication is used for longer than is intended.

In those cases, it makes sense to cut back on the medications that you take. Doing so can actually improve your medical outcomes while also saving you a lot of money (and probably improve life quality by reducing side effects). Again, this is a perfect opportunity to talk to your doctor about whether or not you can trim your medication intake and still experience positive health outcomes.

Talk to your doctor about actions – not medicine – you can take to help improve your condition. Many medications are given to people to help deal with problems that they can improve through personal action. Pain medication might be given to cover up an ailment that can be fixed with regular exercise, for example, or a diabetes medication might be given to cover up for an ailment triggered by obesity.

Rather than merely relying on medication, look for actions you can take to fix the underlying problem so that there’s no problem for the medication to treat. Ask your doctor what kind of personal actions you can take to resolve the underlying medical problem, either by reducing the severity, by eliminating it completely, or by minimizing the symptoms of the illness. If your other life choices can enable you to eliminate a medication from your life, that’s going to save you a lot of money.

Buy generic drugs without insurance by asking whether the cost is lower if you don’t use your insurance plan. Believe it or not, many pharmacies can sell generic prescription medications over the counter for much less than the cost to people who have prescription insurance. It seems crazy, I know, but that’s simply the medical insurance situation in America.

Talk to your pharmacist about any and all medications you’re prescribed and see whether or not a generic alternative paid for without insurance is less expensive out of pocket for you. You very well might find yourself paying a lot less out of pocket for the medicine you need.

Order maintenance medicines in bulk by mail. There are many mail-order prescription insurance programs that will send you all of the medications you need for an extended period (say, three months) all at once. These types of programs are typically significant money savers.

If you take a long term maintenance prescription or two, take a look at ordering those prescriptions through the mail in bulk and see whether or not such a plan can save you money compared to using your local pharmacy.

Next time, we’ll look at some strategies for reducing entertainment costs.

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