In a survey released in early 2018, only 37% of Americans said they would be able to pay for an unexpected $500-$1000 cost. 63% of respondents said they would need to resort to measures such as cutting back other spending, using a credit card, or borrowing money from friends or family in the event of a costly emergency. We have been writing for years on our position that people should not have to decide between health care or groceries or skipping prescriptions. There are ways to build a health spending plan to ensure you are financially able to pay for medical expenses, no matter when they arise.
There are a number of savings options available that can help make the most of income. Health savings accounts (HSAs) or Flexible spending accounts (FSAs) deposits are often made pre-tax through the employer, and can be spent tax-free on qualified medical expenses. FSAs and HSAs both allow people to save money in tax-advantage accounts, but there are key differences:
FSAs can be used with any type or no insurance; HSAs can only be used/contributed to in conjunction with a high-deductible health plan.
Money in FSAs not