Navigating Health Insurance Costs with Budget and Credit

Upon a desk, tiled letters spell out health insurance.

Photo by Leeloo The First on Pexels.

Health insurance is important for your financial health. It pays for unexpected medical bills and gives you access to other medical resources. 

Unfortunately, health insurance is also one of the most expensive commodities out there. In a 2019 Centers for Disease Control and Prevention survey, 14.5% of American adults live uninsured. 

How can you effectively budget your finances and maintain healthy credit with rising insurance premiums and healthcare costs? This article will teach you everything you need to know—so keep reading!

Why Is Health Insurance Important?

Imagine walking a tightrope without a safety net below. That is what life with no insurance feels like. 

Life is unpredictable, and illnesses or accidents can strike at any moment. These unforeseen events are not just health concerns but financial emergencies waiting to happen. 

Without insurance, you risk a major financial fallout, such as: 

  1. Debt Accumulation: Without insurance to cover a majority of the costs, you might find yourself borrowing money or using credit cards. This approach can lead to mounting interest and debt.
  2. Delayed Medical Care: Without coverage, there is a tendency to postpone or completely forego necessary medical care. This course can exacerbate health issues and lead to even higher costs in the long run.
  3. Limited Access to Comprehensive Care: Uninsured individuals do not often have access to the best treatments, specialists, or facilities. This limitation can compromise the quality of care you receive.

Strategies to Balance Health Insurance Costs

Now that we’ve painted the picture—let’s look at some strategies to maintain a healthy balance between health insurance, your budget, and your credit health.

1. Budgeting with Precision

A detailed budget helps you see where your money goes. One way you can budget smarter is by using the 50/30/20 rule

50% for Essentials: This covers basic living costs, from rent and groceries to critical bills like health insurance. 

30% for Discretionary Spending: Leisure, dining out, hobbies, and other non-essentials fall here. 

20% for Savings and Debt Repayment: Building a financial cushion and reducing debt is vital for long-term stability. Prioritizing this ensures you are prepared for future expenses and can reduce debts that might otherwise accumulate interest.

This method ensures that health insurance remains a top priority without encroaching on other financial areas.

2. Consider Different Policies

Understand what each policy covers. Does it include specialist visits, mental health services, or preventive care? Match this against your current and anticipated needs.

Premiums vs. Out-of-Pocket Costs

A plan with a low monthly premium might have higher deductibles or co-pays. Conversely, a higher premium policy might offer more comprehensive coverage with fewer out-of-pocket expenses. 

Determine which balance is more financially manageable for you.

Network Restrictions

Some policies might limit you to specific doctors or hospitals. Ensure that any plan you consider aligns with your preferred healthcare providers or offers a satisfactory alternative network.

3. Health Insurance Deduction

The IRS provides potential tax relief for self-employed individuals or business owners. This relief includes: 


Depending on your situation, you could deduct premiums you pay for medical, dental, and even some long-term care insurance plans. This health insurance deduction can significantly reduce your taxable income.

Who Qualifies?

Typically, those who have a net profit from self-employment, are partners in a partnership or have earnings from an S corporation might be eligible. However, always consult with a tax professional to determine your specific eligibility and how to claim this deduction.

4. High Deductible Plans with Health Savings Accounts (HSA)

High deductible plans generally come with more affordable monthly premiums, making them attractive for budget-conscious individuals.

With an HSA, you may contribute pre-tax dollars, which you may use for qualified medical expenses. This strategy provides potential tax savings and ensures you possess funds set aside for health needs.

The money in your HSA rolls over year after year, so you’re not pressured to spend it. Over time, this can grow into a significant nest egg for future medical expenses, especially with the investment options many HSAs offer.

5. Review and Adjust

Health and financial situations evolve, and so should your insurance. Just as you might have an annual health check-up, have an insurance check-up. Reflect on the past year. Have there been changes in your health, medications, or number of doctor visits?

Life events like marriage, having a child, or even starting a new job can impact your insurance needs. Maybe you’re paying for benefits you no longer use. Or, perhaps there is a gap in your current coverage.

6. Stay Updated with Healthcare Trends

The healthcare sector is dynamic. There is always something new: changes in health policies and insurance premium rates or the advent of new treatments. Leveraging resources, such as healthcare SEO, can keep you updated. Being in the know ensures you adapt to changes, optimize your coverage, and possibly find cost-saving opportunities.

Safeguarding Your Financial and Physical Health

Navigating health insurance costs alongside your budget and credit health does not need to be challenging. You can ensure coverage without breaking the bank when you conduct the right strategies and remain vigilant.

Have Health Insurance Questions?

We hope that this information on health insurance is helpful for you.

Insurance is oftentimes overwhelming, and we want to shed light on the industry by answering your questions. Comment below and your question may be the topic of our next post!

If you liked this article, share it with your friends!

Empower Brokerage wants to help you find the insurance coverage you need and help you save money getting it.  Stay on top of your health and give us a call at (844) 410-1320.

Get affordable health insurance quotes by clicking here.

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About Katie Pierce

Katie Pierce is a teacher-slash-writer who loves telling stories to an audience, whether it’s bored adults in front of a computer screen or a bunch of hyperactive 4-year-olds. Writing keeps her sane (most of the time) and allows her to enjoy some quiet time in the evening before she walks into a room of screaming kids (all of whom she loves dearly) the next morning.

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