How to Keep Your Health Up and Costs Down

Pills, syringe, and cough syrup.

No matter your age, you can help keep your body healthy and your money away from doctors by eating right, exercising and avoiding habits that contribute to chronic illness.

But having the appropriate insurance may help your bottom line more than you think. Follow this guide to see if you have what you need at various stages in life.

In your 20s:

  • Get an appropriate plan. Younger people tend to have fewer medical issues, but that doesn't mean you should ditch health insurance altogether. To help save money while making sure you're covered, you may want to consider a qualified high-deductible plan. Also known as a catastrophic health plan, this type of insurance typically covers costs for serious illness or unexpected accidents. But you're responsible for minor or routine health care expenses. You'll pay a lower monthly premium, but pay a higher deductible than with a traditional plan. This type of plan generally makes you eligible to contribute to a health savings account, which lets you set aside money to meet the higher deductible. "It also comes with a powerful triple tax benefit: Not only are contributions tax-deductible, but earnings and qualified withdrawals are tax-free, too," says J.J. Montanaro, a certified financial planner with USAA. Here's another option for young adults: If you're an unmarried dependent who doesn't have access to employer-sponsored health care, you can stay on your parents' health plan until you turn 26. One important exception is Tricare — you must pay the full cost under the "Young Adult" program. If your parents have Tricare, you may be better off shopping on your own.
  • Protect your choppers. Dental insurance may be a smart purchase, especially if you need elaborate procedures or surgery. Make sure to check if your current dentist is among the ones you can choose from.
  • Keep the vision. While your health insurance may cover serious conditions like glaucoma and cataracts, ongoing care for your eyes usually isn't included. Vision plans generally cover exams and either contact lenses or glasses. Some plans may include discounts on Lasik and other elective procedures.

In your 30s

  • Consider broadening your coverage. You may want to supplement your regular health insurance with accident insurance. It can help cover emergency treatment and related expenses, such as transportation and lodging, if you or covered family members are injured at home or on the soccer field.

    Critical illness coverage is another form of protection to think over. While a health plan may cover much of your treatment costs, a critical illness plan typically pays a lump-sum benefit to you if you are diagnosed with a significant illness, such as cancer, or suffer a heart attack or stroke. It may provide extra money for things like child care and housecleaning while you're getting better. "The benefits provided by accident and critical illness insurance help take away the financial stress, so you can focus on recovering," says Greg Galdau, USAA assistant vice president of health solutions.

    • Guard your income. Health insurance can pay some of your medical bills, but what about the income you could lose if you become seriously sick or are injured and can't work? That's what disability insurance is for, but unfortunately, many people overlook it. "We insure our cars so we can get to work and earn an income, but it's even more important to insure the income itself," Galdau says. Your employer may provide some disability coverage, but it usually isn't portable, so consider buying a personal policy you can take with you if you quit or lose your job.
    • Consider a flexible spending account. These tax-advantaged plans may be offered by your employer and let you use pretax dollars to pay for medical expenses and dependent care, too.

In your 40s

  • Take a strong look ahead. While it's smart to begin saving for retirement in your 20s, most people start to focus a little more on the specifics of their retirement once their 40s roll around. "As you start crunching the numbers more seriously, be sure to factor health care costs into your assumptions about your spending needs in retirement," Galdau says. According to the Employee Benefit Research Institute, out-of-pocket expenses for a 65-year-old couple could suck hundreds of thousands of dollars out of a retirement nest egg.
  • Start learning about long-term care insurance. If you equate long-term care insurance with nursing home coverage, think again. While it can cover those costs, it can generally do something even more appealing — help give you the resources you need to stay in your home. "LTC premiums generally get higher as you age, so there's a big potential benefit for starting a policy when you're younger — and potentially more insurable," Montanaro says.
  • Help your parents make long-term care plans. Don't wait until your parents need long-term care to start planning — by that point, your options could be severely limited. Have a discussion with them now about how they would handle those potentially enormous expenses. You also should make sure that both you and they have the right legal documents in place — like a durable power of attorney, a health care power of attorney, a living will, an authorization for medical providers to share information with the person you've chosen to represent you, and a will.

In Your 50s

  • Stop putting off long-term care insurance. Long-term care expenses can pose a real threat to your retirement savings and to your ability to live in the type of environment you deserve. This insurance can be flexible in its design — you can typically vary the features of the policy to stay within a budget while still reducing risk to your assets. "For example, if you extend the waiting period — the time you have to wait before benefits are paid out — you can trim your premium but still have substantial protection for a long-term need," Montanaro says.
  • Get some help in giving care. If you've become a caregiver for a parent or other family member, tap into information resources such as those provided by the National Alliance for Caregiving, to make your role as easy as possible.

In Your 60s

  • Don't go without. If you retire early and lack employer-provided health insurance, don't be tempted to cut costs and skip insurance until you're eligible for Medicare at 65. "The risk of catastrophically high hospital bills is just too great," Galdau says. "Consider buying an individual policy to bridge the gap, if you have no other option."
  • Study ahead. To avoid making important decisions under pressure, learn about your Medicare choices well before you have to make them.
  • Consider some home improvements. Think about other ways you may need to protect your health as your abilities change. This may include making some modifications to your home to reduce the risk of accidents, such as falling.
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