We all know that health insurance can cost a lot. In 2022, the average American who received coverage through their employer paid more than $6,100 for a family plan — or about $500 per month. That’s nearly 10% of the typical household budget.
But there are also many expenses outside of premiums to contend with, including copays, deductibles, medications and medical devices. Here are 10 strategies to save on out-of-pocket medical costs.
1. Health Savings Account (HSA). HSAs are available to employees with a high-deductible health plan (HDHP). They let you set aside pre-tax dollars to cover certain qualified health care costs. In 2022, the minimum deductible for an HDHP was $1,400 for an individual and $2,800 for a family, and you could contribute up to $3,650 for individual coverage and up to $7,300 for family coverage. The money invested in an HSA is tax deductible, and it can grow and be withdrawn for qualified medical expenses tax free, giving it a triple tax advantage.
2. Flexible Spending Account (FSA). FSA funds can be used to pay for qualified medical expenses, such as health plan deductibles, copayments, prescriptions and medical devices. Your employer sets the limit on deposits, and this money isn’t taxed. You may be allowed to roll over up to $500 of whatever you don’t spend from one year into the next, or your employer may allow up to 2.5 additional months to use up those funds. See your human resources department for more information.
3. Pharmacy discount programs. Pharmacy discount programs offered by major chains as well as independent companies operate outside your insurance plan and can help save you money on prescriptions. Discounts may vary, so research a number of different programs.
4. Urgent care. Some facilities that look like urgent care clinics are actually associated with hospitals and bill at much higher “emergency room rates.” So it’s important to understand which type of facility you visit.
5. Generic medications. Once a drug manufacturer’s patent lapses, other companies can make it in a less expensive but chemically equivalent generic form. Ask your doctor how much a prescribed medicine will cost and if a generic would be appropriate.
6. Free health services. Many free preventive and wellness benefits, as well as maternity and newborn care, are provided under the Affordable Care Act (some restrictions may apply, contact your health plan provider for more information). Take advantage of those you qualify for.
7. Shop around. We routinely shop around for a new phone or TV, yet often fail to do so when it comes to our medications, provider services and medical procedures. Hospitals are now required to publish prices for many services, which makes comparison shopping easier. Shop the cost of nonemergency procedures to see where you can save, but also research your providers’ health and safety outcomes.
8. Time your procedures. Health plan deductibles renew yearly. Be mindful of the calendar and get nonemergency procedures scheduled before your deductible rolls over each year.
9. Hire a medical billing advocate. If you have a serious medical condition, consider hiring a medical billing advocate to review bills to look for errors that can cost you money. They can challenge any discrepancies and negotiate with health care providers on your behalf.
10. Protect your health. One of the best ways to save on health care is to do what you can to keep yourself healthy. Stay up to date on screenings and recommended vaccinations, don’t smoke or drink excessively, maintain a healthy weight, stay active and manage stress.
Medical bills can be overwhelming and threaten your financial wellness, but armed with information and smart strategies, you can fight back.