You probably don’t need to be told that health care costs are going up. You likely see it on your bank statement or pay stub.
But if you like data with your financial pain, according to the American Medical Association, in 2023, the most recent numbers they have, health spending in the United States increased by 7.5%, the highest growth rate observed since 2003 (8.5%), if you don’t count 2020 (when COVID-19 hit), which saw health care costs climb 10.4%.
In other words, this might be a good time to start thinking hard about what you’re spending on medical care.
For instance, do you automatically opt for the plan you had the previous year each fall during open enrollment? Change can be hard. If your doctor writes you a prescription, do you buy it without asking if there are less expensive and equally effective options? Do you agree to whatever tests your doctor recommends, without asking if you really need the exam or whether a less pricey option would be just as good?
Here are 13 strategies for getting the most from your health care coverage without breaking the bank
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How to Save Money on Medical Expenses
— Consider starting a health savings account
— Invest in a flexible spending account
— Let your doctors know about your financial situation
— Avoid the hospital when possible
— Comparison shop
— Use health care decision tools
— Check your bills
— Think about long-term health issues and end-of-life care
— Consider telehealth options
— Take advantage of wellness programs
— Explore government assistance programs
— Consider long-term care insurance
— Get routine screenings and preventative care
[READ: How Adults Can Get Free or Low-Cost Vaccines]
Consider Starting a Health Savings Account
“One of the most effective tools for saving money on health care costs is a health savings account, which can be used in combination with a qualifying high-deductible health plan,” says Lorna Sabbia, a Boston-based managing director and head of workplace benefits for Bank of America.
Sabbia says that you can use a health savings account (HSA) to cover current health care costs, from medication to co-pays.
The Internal Revenue Service defines a high-deductible health plan as any plan with an annual deductible of at least $1,600 for an individual or $3,200 for a family. Only people enrolled in high deductible health plans (HDHP) are eligible to open HSAs.
HSAs can help you pay for medical and dental expenses not covered by insurance. These accounts also help you save on your taxes because the money you contribute to your HSA is exempt from taxes.
Many health care plans offer HSAs, which you can set up during open enrollment. You choose the amount you want to put into your account, and the funds are deducted from your paycheck throughout the year. Some employers may also contribute to employee HSAs. You can use HSA funds for a wide array of expenses not covered by your insurance, such as acupuncture, birth control pills, breast pumps and supplies, eye exams, lab fees, massage therapy, a weight-loss program and psychotherapy.
“HSAs are most powerful when used for future health care expenses, given that you can invest your HSA for future growth. Investing your HSA comes with a triple-tax advantage. You can contribute, grow and withdraw tax-free when used to cover health expenses,” Sabbia says.
Some plans may not cover certain expenses, such as office visits for preventive care or appointments with only a co-pay. The HSA contribution limit for 2025 is $4,300 for an individual or $8,550 for families. There’s no “use it or lose it” component to HSAs; if you have money left in your account at the end of the year, it rolls over into the following year.
[READ: What Is an Aging Plan and How to Make One]
Invest in a Flexible Spending Account
Flexible spending accounts are similar to HSAs, with a couple of notable differences. As with HSAs, you can use FSA funds for a wide variety of health-related services and goods. The annual limit for FSA contributions is $2,650, and your contributions aren’t taxed.
Some FSA plans allow you to roll over up to $500 of unused funds into the following year, while others require you to use the funds during the calendar year. Many have a grace period and allow you to claim FSA money from the previous year until mid-March of the following year.
Let Your Doctors Know About Your Financial Situation
You, the patient, should make sure your physicians know your ability to pay for medical products and services, whether it’s a medical procedure or prescription medication. The results of a survey conducted in 2022 of 1,566 participants with cancer or autoimmune disease found that 62% of the patients wanted to discuss cost considerations when talking about treatment, but only 32% reported actually having those conversations.
Maybe your doctor can’t help you find a cheaper way to get health care, but you won’t know if you don’t ask.
Along those lines, Kiara DeWitt, a registered nurse and the founder and CEO of Injectco, a Botox clinic with locations throughout Texas, suggests asking doctors for the cash price before using insurance.
“You do not need to be an expert (on health care prices), you just need to be aware. You would not pay a restaurant bill blind, so do not do it at the doctor’s office either,” DeWitt says.
[Read: The Highest Medical Costs to Expect in Retirement.]
Avoid the Hospital When Possible
If you need to go to the hospital, obviously, you go. But if you are dealing with a procedure or treatment that isn’t urgent, and you can get your care somewhere else, you probably are better off (financially speaking), according to Dr. Bill Hennessey, who is based out of Greensburg, Pennsylvania. Hennessey is the co-founder and chief innovation and billing integrity officer at CareGuide, a company that works with consumers and employers to save on health care costs.
Hennessey says that you want to avoid, as much as possible, being treated at hospitals (if it isn’t necessary), because it’s always going to be more expensive. Hennessey says that if you use an independent surgery center that isn’t owned by a hospital for routine medical treatment such as GI scopes, carpal tunnel releases, cataract surgeries and sleep studies, for example, you’ll pay half to one-third of the cost you would receive at the hospital.
Comparison Shop
As with other goods and services, you can bargain hunt for health care. A few areas you may want to focus your efforts on include:
— Medical procedures. For instance, it’s generally cheaper if you get a procedure performed by a doctor at a hospital in your insurer’s network. You might have already known that. But something you likely don’t know: Hennessey says that nonprofit hospitals must provide charity care to most patients who make $30,000 to $75,000 per year. “The financial counselor office is where to obtain the application and policy guidelines,” he says.
— Insurance plans. Don’t think about jumping from one insurer to another without reading the fine print; HMOs tend to be less expensive than PPO plans. Some insurers also tend to be pricier than others; Hennessey says that top of the list are United Healthcare, Cigna and Aetna. That said, it should be noted that cheap doesn’t always translate to being “better,” and that some health insurance plans look inexpensive but end up becoming very expensive the more you use the policy.
— Prescription drugs. For instance, many discount pharmacy cards, such as FamilyWyze, SingleCare, WellRx.com and GoodRx, provide real savings.
“Pricing systems are upside down,” DeWitt says, of pharmaceutical drugs. “In many cases, a prescription filled with no insurance at a local pharmacy using a discount card can cost $12. The same prescription billed through insurance might ring up at $40. So always ask both options, and do not assume your card gives you the better deal.”
It’s also worth mentioning that, according to the Federal Trade Commission, generic drugs can be up to 85% cheaper than their name-brand counterparts.
[READ: How to Prepare for End of Life: Medical Care and Planning]
Use Health Care Decision Tools
There are many online comparison resources, like the Healthcare Bluebook, which has an online tool that allows you to compare the prices of medical services and procedures by ZIP code. HSABank.com has a health plan comparison calculator. Medicare offers a guide to help people compare the cost of Medicare providers. And U.S. News offers tools to compare the best Medicare Advantage Plans.
Check Your Bills
Don’t assume your hospital or doctor’s bill is error-free.
“Honestly, the biggest mistake is never questioning the bill,” DeWitt says. “Get an itemized statement and read every line.”
She says that if a charge looks odd, jot it down, so you can analyze it later and call and question the health care provider later.
Medical bills are infamous for their errors. One often-cited statistic is that 80% of medical bills have errors, though that was based on research done by “Becker’s Hospital Review” in 2016. Still, it seems doubtful little has changed; last year the Consumer Financial Protection Bureau released a report that stated, “Due to the complexity of medical billing, information about medical debt is often plagued with inaccuracies and errors.”
And if you can, DeWitt says that you should ask about charges before you’re treated. Hennessey recommends getting the cash price for medical services in writing before you get your care.
Or you could hire a medical billing advocate to check your bills and file appeals for denied medical claims. Some employers even offer these services for free as part of their health benefits package.
Think About Long-Term Health Issues and End-of-Life Care
“Preparing for long-term health care costs is extremely important, especially considering that increases in the cost of health care tend to outpace inflation,” Sabbia says. She adds that according to research from Bank of America, “only 7% of employees think their yearly health care expenses in retirement could total an even $10,000. However, current data shows that a retired 65-year-old couple could need $351,000 in savings to cover their health care expenses in retirement.”
The moral of that research? Save more money for retirement.
At some point, you will also want to execute an advanced directive and ask your doctor to complete a “Physician Orders for Life Sustaining Treatment” form. The document, which is signed by the patient and his or her doctor, nurse practitioner or physician’s assistant, is used in more than 43 states and Washington, D.C. It documents your preferences for the level of treatment you want if you can no longer speak for yourself.
But above all, planning ahead is paramount. So is asking the medical establishment lots of questions about pricing, Hennessey says.
“Trust your doctor with your life, not your wallet,” Hennessey says.
Consider Telehealth Options
Virtual consultations can be convenient and may be a less expensive alternative to in-person visits. After all, even if your copay is the same, you’ll at least save money on gas or transportation. Telehealth visits are as safe and effective as in-office visits, according to the American Hospital Association. Furthermore, both patients and clinicians are generally happy with their experience. Former concerns that telehealth would increase health care system utilization and costs have been disproven.
Take Advantage of Wellness Programs
A lot of people pay professionals to help them lose weight or manage stress, but your insurer might help you do that for free. For instance, many insurers have rewards programs, like United Healthcare’sUHC Rewards, which allows members to earn money by choosing health activities, such as completing a biometric survey or tracking their steps. Many insurers, including Aetna, offer coaching and counselors to help members quit smoking and maintain a healthy weight. Other insurers, such as Cigna, may have stress management coaches. It’s definitely worth looking at your insurer’s wellness programs and seeing what they offer.
Explore Government Assistance Programs
If you’re struggling financially or stick to a strict budget, Medicaid and the Children’s Health Insurance Program (CHIP) can provide low-cost or free health care coverage for certain individuals and their families. CHIP may be a good fit if you know you make too much for Medicaid. It’s a joint federal and state program that offers health coverage to uninsured children in households with incomes too high for Medicaid but too low to afford a private or group health plan.
Consider Long-Term Care Insurance
Planning for future health care needs can help prevent unexpected financial burdens later. According to the 2024 American Association for Long-Term Care Insurance annual Price Index survey, the average annual premium for a $165,000-benefit policy with no inflation protection is $950 for a single male (age 55). For a single female (age 55), it’s $1,500. If you’re part of a couple who are both 55 years of age, the average combined annual premium is $2,080 (about $173 a month). That may seem like a hefty expense, month after month, year after year, but it could make paying for long-term health care later in life much more manageable.
Get Routine Screenings and Preventative Care
It’s obviously a good idea to prevent or catch a health issue before it develops or worsens. That’s why insurance companies encourage and often reward members to be healthier. Your insurance policy probably doesn’t make you pay a copay for services such as regular well visits, health screenings and vaccines. So, be sure to take advantage of these services that could help you avoid high medical bills down the line.
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