How can I afford to pay for health insurance?

You can find money in your budget to pay for health insurance.

With the opening of the Health Exchanges for the Affordable Care Act (aka Obamacare), many may be wondering how they will be able to afford the cost of health insurance in addition to all their other monthly bills and expenses. There will be tax credits for those that qualify financially, but for most there will likely be out-of-pocket costs. eXtension has resources to help you learn more about purchasing health insurance.

The first step in determining how to pay for the added cost of the health insurance is to determine where you are spending your money currently. It’s easy to simply say, well I don’t have any money left at the end of the pay period when I receive my next pay check, so I can’t afford it. But determining where your money goes each month is a first step toward finding “extra” money to pay for the coverage. Check out the resources from Michigan State University Extension at for more useful resources on money management.

Tracking your spending is a big step toward determining how you spend your money each month. Here’s how to do it. In a notebook or on a calendar, write down everything you spend your money for a period of time, preferably for a month. It is helpful to group similar expenses with headings such as food, housing, child care, utilities, medical, entertainment, household supplies, transportation and personal (clothing, shoes, laundry, diapers and other personal items).

As you pay each bill, such as rent, mortgage, utilities, cell phone, cable TV or Satellite dish, insurances etc., write down each expense and the amount. Also, write down all other ways you spend your money: groceries, cleaning supplies, prescription drugs, child care, school lunch and so on. Even write down things that don’t cost much such as movie rentals, a bottle of soda or water or other such things. Do not forget the cost of entertainment like going to a bar, purchasing a lottery ticket, money spent at the concession stand or the cost of entry to a high school sporting event.

At the end of the month, add up the totals. This tells you the total amount of money you spent for the month. You can use the record of spending you kept for the month to find places to spend less and still get the things you need including health insurance!

Some ideas for cost-cutting include:

  • Don’t buy it – ask yourself if you really need this item.
  • Borrow – especially something you don’t need very often
  • Share – share items and skills with family and friends.
  • Substitute – ask yourself if something at a lower price would do the job almost as well.
  • Use wisely – make the things you buy last longer by taking care of them.
  • Find the best buy – compare prices.
  • Make it – if you can do it cheaper.
  • Rent or hire – an item you won’t use much
  • Find it free
  • Trade – things or skills for what you need.

Related Events

Related Articles

Related Resources