Major medical expenses can create a heavy financial burden. And the fact is, all of us are susceptible to unforeseen and costly medical events. While we can’t control whether and when we might encounter an unexpected health challenge, we can prepare for it financially. Here are several strategies to help you get started.

The realities of today’s medical coverage

To start, it’s important to make sure you have the right health insurance in place to help you manage the financial consequences of a health crisis.

Most people have coverage either through their employer, through an individual policy or as part of a government program such as Medicaid or Medicare. Regardless of how you are insured, it is increasingly common today to face co-pays or deductibles when you need care. Therefore, your financial commitment doesn’t end with the premiums for which you may be responsible. Depending on the policy you carry, you could easily face out-of-pocket expenses costing several thousand dollars.

One way to manage these costs is to pay close attention to whether providers you work with are “in-network,” or “out-of-network.” Typically, your personal financial liability is limited with in-network providers, but your insurance coverage may be lacking if you use out-of-network services.

In emergency situations, you may not have much control over who provides your care. These circumstances can result in particularly large bills that may surprise those who thought their health insurance would cover them.

Take time to understand what is and isn’t covered under your current health insurance policy so you’re better informed on what the potential financial impacts could be.

Insurance isn’t enough — plan for that

Health insurance may mitigate much of the cost risk, but it doesn’t eliminate it. You should have money saved in an emergency fund to help cover additional expenses.

Conventional wisdom recommends that you set aside the equivalent of three-to-six months of household income in an emergency fund. These are dollars that should be readily accessible and held in vehicles such as bank savings accounts or money market funds. Given the rate of inflation and cost of living increases, an even larger emergency fund, equal to nine months or more of income, may be appropriate.

If possible, avoid depleting accounts that are set up to meet long-term goals, such as retirement or college education costs. Having a dedicated cash cushion in place can help you help you handle surprise medical bills without depleting savings devoted to other goals.

Short-term disability insurance options can also be an important financial protection. If you need to take time off work due to an illness or injury, short-term disability policies typically provide a specified portion of your paycheck that can be used for expenses. Evaluate options that may be available through your employer and consider purchasing a policy or enhanced policy on the market if needed.

Other steps to consider

If you find yourself in a pinch trying to pay bills, there are other steps to consider:

Talk to your medical provider to try to make arrangements to either alter the charge or set up a payment plan that you can realistically stick to.

If you need more guidance, consult with a credit counselor who may be able to help you structure a solution to deal with your financial challenges.

If you experience a major medical event, the least of your worries should be paying for it. Planning ahead is your best defense against the impact of surprise expenses. Your financial advisor can work with you to make sure you are properly prepared.

Trisha Schaar, CRPC, CLTC, APMA, is a financial adviser with Echelon Wealth Partners, a private wealth advisory practice of Ameriprise Financial Services, LLC in Marshall, MN. She specializes in fee-based financial planning and asset management strategies and has been in practice for 8 years. To contact her, ameripriseadvisors.com/trisha.m.schaar, (507) 532-2210, 100 West College Drive, Suite 103, Marshall, MN