We know nobody’s talking about rising health care costs because it’s super affordable right now and nobody’s struggling at all. (That . . . is sarcasm.) But we thought we’d address it anyway—specifically, how to save on health care. You know, just in case you felt like saving money sometime. In the future. ‘Cause everything’s just fine right now. (More sarcasm.)
From health insurance to prescriptions to therapy, the cost to keep you and your loved ones operational adds up quickly.
Don’t let the system get you down. There are ways to save, and we’re going to show you 10 of them right now.
In this article:
1. Check Your Health Insurance Coverage
2. Comparison Shop Health Insurance Providers
3. Choose In-Network Providers
4. Plan Ahead for Medical Expenses
5. Enroll in an HSA or FSA
6. Save Money on Prescriptions
7. Take Medical Expense Tax Deductions
8. Stay Healthy
9. Look Into Long-Term Care Insurance
10. Lower Your Medicare Premiums
1. Check Your Health Insurance Coverage
You’ve got health insurance (you’ve got health insurance, right?), but just because you have the plan with the highest coverage doesn’t mean you have the right plan. You might be paying for more than you need! Or it could be you don’t have enough and that’s costing you.
Review your health insurance coverage and look for whether you’re using it a lot or not. Under or over usage might be a sign you have the wrong amount of coverage.
If you’re underusing your current health insurance and are young and healthy, look into a high-deductible health plan (HDHP). They:
- Have high deductibles so you pay more when you need care.
- Have low monthly premiums so you save money if you don’t use your health insurance very often.
- Pair with Health Savings Accounts (HSAs) for huge tax savings.
If you’re currently overusing your health insurance—whether that’s from age or health problems—you might need more coverage. Take a look at low-deductible health plans like preferred provider organizations (PPOs), health maintenance organizations (HMOs), and point-of-service (POS) plans. These:
- Have low deductibles so if you’re using your insurance a lot, you don’t have to empty your pockets to pay your out-of-pocket share.
- Come with higher monthly premiums.
An independent health insurance agent can help you compare your plan with other options so you can decide if it’s worth switching. Speaking of which . . .
2. Comparison Shop Health Insurance Providers
Don’t just go with the first policy you find. Just like with everything, shopping around will make sure you’ve got the best deal out there. If this sounds like a hassle, you’re right, it can be. That’s why handing it off to an independent insurance agent can be a really smart move. They’ll shop and you can simply pick.
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3. Choose In-Network Providers
In nearly all circumstances, you’ll save money by using physicians, clinics and hospitals in your health care plan’s network. These in-network providers agree to lower their fees on services in exchange for having access to the plan’s network members. That’s a great deal for you!
Depending on which health care plan you have, your costs for out-of-network care could vary.
- If you have an HMO plan, it’s likely you’ll be responsible for the entire cost of care from an out-of-network provider.
- Do you have a PPO or POS plan? Your insurance may still cover part of your care. But since your overall costs weren’t discounted, the amount you owe will be higher—even after your insurance chips in.
- If you have an HDHP plan, you may have the option of going in or out of network, but staying in-network will save you money.
Let’s look at a quick example:
Oliver visited an in-network physician when he started experiencing flu-like symptoms. The charge was $200. Because his plan has a discounted rate with that doctor, he got a $50 discount on the service. His insurance covered $130, leaving him with a $20 bill to pay.
If Oliver had chosen an out-of-network provider for the same service, he wouldn’t have received a discount on the overall costs. Even if his insurance covered the same $130, he would be responsible for paying the remainder, which in this example would be $70. Oliver can visit an out-of-network provider if that’s his preference, but he should be prepared to pay extra. (An emergency fund comes in handy for those kinds of charges.)
4. Plan Ahead for Medical Expenses
Not every health crisis needs the ER. Sometimes an urgent care clinic—or even your primary care physician—will do. To save on health care, avoid making split-second decisions to go to the ER. Decide ahead of time where you’ll go for what kinds of medical problems.
The urgency of your need for care should help you decide where to go. For example, if someone is at risk of permanent harm or death (we’re talking chest pain, poisoning, bleeding out from a jousting match, etc.), get your behind to the emergency room. If it’s less serious than that but you can’t wait until the next day (think sprains, minor broken bones, dog bites, etc.), go to urgent care.
Keep in mind not all urgent cares are the same. If you’re headed for one and you know you’ll need special scans or something like that, you should call ahead to make sure the urgent care provides that. You could spend more money and time going somewhere without the technology you need and end up in the ER anyway.
5. Enroll in an HSA or FSA
An HSA or FSA allow you to contribute money tax-free to a savings account dedicated to health care costs. Both are great ways to save money for health care costs, and both allow for employer contributions.
To open an HSA, you have to have an HDHP. We’re big fans of the HDHP/HSA combo. That higher deductible may seem scary, but when you already have the money on hand in your HSA to cover an emergency, it’s no problem. With an HSA, contributions roll over year to year.
FSAs are only available through your employer, but you can have any type of health plan and still qualify. Since your contributions don’t roll over with an FSA, you have to use the funds every year (unless you’re cool with wasting hard-earned cash. Yeah, no.).
6. Save Money on Prescriptions
We all know the generic Great Value brand dish soap cleans your dishes just the same as Dawn (even though Great Value doesn’t have the cute ducklings). Same goes for prescription drugs. Buying generic is an easy way to save that makes no difference—except to your wallet.
7. Take Medical Expense Tax Deductions
Were your medical expenses crazy high this year? If your medical expenses exceeded 7.5% of your adjusted gross income, you might qualify for a tax deduction.[1] You will have to itemize your deductions.
Other tax deductions to look into:
- HSA contribution tax deduction (In 2024, you can deduct your HSA contributions up to $4,150 for singles and $8,300 for married couples.[2] )
- Premium tax credit (This is for people with incomes between 100% and 400% of the federal poverty line.)
8. Stay Healthy
Okay, maybe this seems a bit simplistic, but it’s not really. So many choices you make—from what you eat to what activities you do—have a big impact on your health (and whether you need care).
So even if times are tight, maybe don’t switch to a fast-food diet—and also now might not be the time to start that new mountain bike hobby.
9. Look Into Long-Term Care Insurance
This requires looking into the future a bit and being willing to pay premiums now, but if you’re over 60, it’s important you look into long-term care insurance. Seventy percent of all 65-year-olds living today will need long-term care.[3] If you’re not financially comfortable cutting a check for $300,000 toward the end of your life, you should buy a long-term care insurance policy—because that’s how much it’ll cost you without it.[4]
10. Lower Your Medicare Premiums
Look out! The government will charge you extra on top of your regular Medicare premium if your income from two years before was above $97,000 for individuals or $194,000 for couples. If you’re coming up on retirement age, discuss strategies with a qualified financial advisor to reduce your taxable income and lower your Medicare premiums.
Plan for Rising Health Care Costs
Okay, so yeah, health care costs are rising—and there’s no end in sight. You’ve probably already seen your health care expenses go up several times (and speaking of age, as we get older, our health care needs increase too!). All around that makes for a pretty expensive-looking future. So how do you plan for rising health care costs? There are a couple of things you can do.
For one, you can increase your contributions to your HSA or other tax-advantaged accounts if you have one or more. Fill that baby up! You can use that money (that’s been growing tax-free!) to pay for medical care and premiums later.
Two, you could try to wait until you’re 70 years old to start receiving Social Security retirement benefits. The longer you wait to start getting benefits, the bigger your benefits payments will be.[5]
As you can see, you have a lot of options to save on health care costs. Now it’s time to put all of this into practice! Here are a couple practical next steps you can take right now to get the best health insurance in place for yourself:
- Open an HSA if you already have an HDHP, or enroll in an FSA.
- If you have insurance already, there’s a chance you could be saving more by making a few adjustments or going with a completely new policy—so reach out to our partners over at Health Trust Financial! They make finding the right health insurance policy easy. And they’ll never try to sell you on a particular company. Instead, they shop around with your needs in mind to find you the best deal. Whether you have health insurance or need it for the first time, Health Trust Financial will guide you through the process so you can be confident knowing you saved money on health care and have the coverage you need.
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