Steps to Living a Risk-Reduced Life

 

Health and wealth are key resources for a happy and successful life. People in poor health often die young and spend money that could have been invested on health care costs. 

On the other hand, those who practice recommended health behaviors are more likely to exceed average life expectancy and need a nest egg large enough to insure that they don’t outlive their assets.

Poor health and financial outcomes are often couched in vague risk-based terms such as “you are at increased risk for” (heart disease, cancer, outliving your assets, etc.). People see “you’re at increased risk for” warnings and tune them out. Why? Risk warnings are rarely personalized.  We are told that we are “at risk for’ so many things that many people simply “freeze” and do nothing.

While nobody can live a risk-free life, everyone can take actions to limit the amount of risk we are exposed to. These strategies are often shaped by life experiences and expert recommendations. Below are 20 risk-reduction strategies that I personally use.

Car Parking- I park my car on the outer edges of parking lots to avoid getting scratches and dents and for exercise.

Credit Cards- Nobody takes my credit card so I pay cash at restaurants without a cash register. Privacy trumps points.

Decision Rules- I avoid answering phone calls from unknown callers and let them go to voicemail.

Debit Card- I have never had one to reduce the risk of someone wiping out my checking account.

Diet- Since having breast cancer, I’ve been a pescatarian and drink less than one drink a week.

Drive Bys- My husband and I do test drives together to find destinations that one of us has to drive to alone.

Driving- I stay home or wait out heavy rain storms to avoid accidents while driving in bad weather.

Fitness- I typically walk 10,000 steps per day and have never smoked or used illegal drugs.

Hand Washing- I wash my hands frequently to avoid the risk of a cold, flu, COVID, etc.

Income Taxes- I use IRS safe harbor rules to avoid the risk of owing an underwithholding penalty.

Index Funds- I invest in a low expense total stock market index fund to track market returns.

Mail Use- I avoid mailing things and instead use automated payments and online bill pay.

Mask Use- I wear a mask in crowds, in airports, and on planes (same reason as hand-washing).

Leave It Alone- If something is not broken or absolutely necessary, I typically don’t fix it.

Screening Exams and Vaccinations- I do these to reduce the risk of bad health outcomes.

Smart Car Features- I drive a car with a back-up camera and alerts when you are backing up and getting close to things.

Solopreneurship- Earnings from my company are a supplement to guaranteed sources of income.

Stress- I avoid stressful events that I have no control over, including potentially difficult clients.

Text Alerts and Secondary Email Addresses- I want to be alerted about bank and credit card account transactions.

Uniball Gel Pens- When I do use checks, I use pens with special ink to reduce the risk of check washing.

This post provides general personal finance or consumer decision-making information and does not address all the variables that apply to an individual’s unique situation. It does not endorse specific products or services and should not be construed as legal or financial advice. If professional assistance is required, the services of a competent professional should be sought.

The Opioid Crisis and Personal Finance

I recently participated in a panel discussion about America’s opioid crisis at a professional conference. My role on the panel was to discuss the financial implications of the opioid crisis on individuals, families, and the country. Other speakers delved into the extent of the opioid epidemic and its impact on relationships and physical and mental health.

Below are my take-aways from the conference presentation:

Staggering numbers- According to various U.S. Department of Health and Human Services reports, 10.1 million people misused prescription opioids during the past year, 1.6 million had an opioid use disorder, and 50,000 used heroin for the first time. In addition, there were 48,006 deaths attributed to overdosing on synthetic opioids and 14,480 deaths attributed to overdosing on heroin.

Risk Factors- Factors associated with opioid misuse and use disorders include a family history of substance abuse, a personal history of substance or tobacco use, a history of preadolescent sexual abuse, mental health issues like depression (opioids may be misused for their mood-altering properties), and demographic factors (e.g., primarily young males).

How Opioids Get Misused- Pathways to substance abuse include prescriptions by doctors, using another person’s prescription, obtaining prescriptions from multiple doctors, stealing drugs from family and friends, and accessing drugs that are not stored in a secure, locked location. Every day, 2,000 teens in the U.S. try prescription drugs for the first time.

Opioid “Rush” Sensation- During an overdose, oxygen supply to the brain is limited due to lowered breathing and a lowered heart rate. Opioid receptors in the brain and body are flooded which causes a euphoric “high” feeling. The opioid user typically gets sleepy due to shallow breathing. Brain damage or death can occur if Narcan (an emergency treatment medicine designed to reverse an opioid overdose) is not administered promptly.

Health Impacts- People with an opioid dependence are 11.2x more likely than others to have had at least one mental health outpatient visit and 12.2x more likely to have had at least one hospital inpatient stay. In addition, they are at greater risk for Hepatitis A, B, or C and for developing a psychiatric illness and for pancreatitis. Opioid use during pregnancy results in exposure of babies to the harmful effects of these drugs.

Psychosocial Impacts- In addition to health impacts such as mental confusion, depression, nausea, and constipation, other impacts include the destruction of families, low educational achievement, unemployment, homelessness, increased crime and fatalities due to motor vehicle accidents, increased transmission of disease (e.g., HIV and hepatitis), and increased healthcare costs.

Global Financial Costs- Opioid abuse is estimated to cost the U.S. $33 billion a year in health care costs and $14.8 billion annually in criminal justice costs. The largest cost, however, is $92 billion in lost productivity and earnings, which includes losses due to premature death of a worker due to an overdose, lost productive hours, and opioid-related incarceration. The costs of opioid addiction affect individuals and families, employers (e.g., absenteeism, presenteeism, labor shortages, disability payments, and costs of errors made by impaired workers), and governments (e.g., criminal justice and incarceration expenses and reduced income tax and FICA tax revenue).

Individual/Family Costs- Listed below are impacts experienced by individuals and families affected by opioid addiction:

•        Decreased labor force participation

•        Incarceration for opioid-related crimes

•        Depleting savings to pay for a drug addiction

•        Forgone saving/investment opportunities (e.g., 401(k)s, IRAs)

•        Out-of-pocket health care expenses

•        Poor credit history due to delayed bill-paying

•        Lost lifetime earnings due to unemployment and premature death

•        Grandparents raising grandchildren (impact on retirees)

 

Financial Action Steps- The objective here is to prevent an opioid user’s access to cash with which to buy drugs. Third party monitoring of financial accounts is often recommended, and preparation of estate planning documents is essential. Other suggested financial management strategies include the following: 

•        Close joint bank and credit accounts

•        Turn over credit and debit cards to a sober family member (i.e., pay for things cash-only)

•        Cut off online access to financial accounts

•        Direct deposit of paychecks and direct bill payment

•        Text alerts (e.g., late payments and account withdrawals) to a sober family member

For additional information about the cost of opioid abuse, review this colorful infographic.

This post provides general personal finance or consumer decision-making information and does not address all the variables that apply to an individual’s unique situation. It does not endorse specific products or services and should not be construed as legal or financial advice. If professional assistance is required, the services of a competent professional should be sought.

 

How to Cut Health Care Costs

With high inflation currently, many families are closely examining their expenses. One category is health care, which takes a big chunk out of family budgets. This includes expenses for health insurance as well as deductibles, copayments, and coinsurance when medical bills occur. Costs can add up to many thousands of dollars annually.

In 2018, the average American household spent almost $5,000 per person on health care. What to do? Fight back as best you can by controlling any potential health care costs that you can. Consider these 11 money-saving tips:

¨     Ask About Health Care Costs- Request a ballpark price quote. According to an article in the Wall Street Journal, inquiring about costs and mentioning financial concerns may be enough to prompt your doctor to recommend a less expensive treatment or to simply monitor a condition “to see if it gets better on its own.”

¨     Negotiate Drug Costs- Ask questions. The above article also recommends discussing financial considerations about prescription drugs with your doctor. This can lead to receiving a supply of free drug samples that the doctor has on hand and/or a prescription for less expensive generic drugs (see below).

¨     Buy Generic Drugs- Ask your doctor or pharmacist if required prescription drugs are available as less expensive generic drugs. Generic drug savings can average hundreds of dollars over the course of a year. Also make sure that prescribed drugs are on your health care plan’s formulary (i.e., list of covered drugs).

¨     Compare Costs- Call around for prices to compare costs for diagnostic services (e.g., CT scan or bone density test) and lab work. The cost of a single procedure could vary by hundreds, even thousands, of dollars. Hospitals often charge higher prices than free-standing radiology providers and other medical service providers. Use the billing code from your doctor for an “apples to apples” comparison.

¨     Find an App- Use an app to get information about the cost of various medical procedures for people with different types of insurance in different parts of the country. Examples include New Choice Health and Fair Health. Be sure to read their underlying assumptions. New Choice Health, for example, provides a Great Price, Fair Price, and Expensive Price for procedures as well as a list of local service providers and their price range.

¨     Focus on Prevention- Practice good health habits that reduce the risk of costly medical problems. Examples include regular health screening exams (e.g., colonoscopies and mammograms), nutritious food, exercise, washing hands frequently, and flossing teeth.

¨     Get Prescription Deals- Order a 90-day supply by mail instead of buying a 30-day supply from a local pharmacy. The savings are generally 15% to 35% on monthly copayments. Another good way to save on prescription drug costs is to use a website/app like GoodRx and WeRx to search local pharmacy prices and apply available coupons and discounts.

¨     Try to Negotiate Discounts- Ask for a price break if you pay with cash when you are responsible for all or part of a medical bill (e.g., services from an out-of-network provider). Cash payments save a doctor or hospital the processing fee on credit cards. Sometimes, the cash payment may be lower than what insurance provides.

¨     Follow Health Insurance Rules- Read the “fine print” in your health insurance policy regarding referrals to specialists and pre-certification for medical procedures. Not knowing the rules for your health plan can result in denial of coverage for a claim.

¨     Use Free Health Care Services- Take advantage of free or low-cost community health fairs, well-child clinics, flu shots, gyms, and other health and medical services available at your workplace or in your community. Do the same thing for services, such as free rabies clinics, for pets.

¨     Check for Billing Errors- Request an itemized statement of your medical procedures and their costs and review it for errors. Report errors to the service provider promptly and request a revised billing statement. It is estimated that 80% of all medical bills contain errors, often due to incorrect billing codes.