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What Are the Best Tips for Medical Money Management?

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  • Written By: N. Madison
  • Edited By: Jenn Walker
  • Last Modified Date: 02 November 2018
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A person can consider many different suggestions when he is trying to make the best medical money management choices. Some of the best tips, however, may be those that provide advice on how to handle a health insurance deductible. An individual might also benefit from tips that discuss deducting medical expenses on one's tax return. Additionally, an individual may do well to consider whether he can save money by taking advantage of an employer-offered flexible spending account.

One of the best tips for medical money management is to give careful thought to deductibles. Often, individuals opt for the lowest deductible amount, and this may prove particularly helpful when a person has little money to spare and will have a difficult time paying a higher deductible. In some cases, however, opting for a higher deductible on one's medical insurance just might make good sense, as it may translate into less money spent on insurance premiums overall. For instance, if an individual is unlikely to need a significant amount of medical care in a given year, he may decide that saving on premiums is worth taking the chance with a higher deductible.

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Another good tip for medical money management is to consider one's taxes. In many jurisdictions, taxpayers can enjoy tax benefits based on the money they spend on medical care. For example, one may have the opportunity to deduct a portion of his medical bills and insurance payments on his tax return. This can help to ease some of the stress a person feels over medical expenses since he knows it will help him, at least a little, financially. It is important to keep in mind that tax savings may not be available to everyone, as a taxpayer may have to meet income and expense-level requirements to qualify.

Some medical money management tips also recommend considering flexible spending accounts. These accounts often work well with an insurance plan that meets many but not all of a person's needs. With this type of account, an individual can deposit money from his wages before his pay is taxed, and this money can then be used to pay for medical needs that his insurance doesn't cover. For instance, if medical insurance will not pay for a particular dental procedure, an individual can choose to pay for it out of his flex account. Doing so probably won't translate into savings on the dental procedure, but it may result in savings on his tax liability, as depositing pretax money into a flex account can lower his total taxable income.

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