The Easiest Ways to Lower Your Health Care Bills

Understanding the complexities of the American healthcare system can sometimes feel like deciphering an ancient manuscript. Just when you think a procedure is covered, you end up with a bill that you can’t afford. You should never have to choose between an important follow-up appointment and paying your mortgage, yet many people are faced with crushing healthcare costs every day. Thankfully, there are clever ways to get ahead of your health bills so you end up paying less out of pocket. Follow these tips for lower health care costs every time.

Enroll in an HSA or FSA

HSAs (health savings accounts) and FSAs (flexible spending accounts) are great options for covering medical costs. Essentially, these accounts allow you to set aside pre-tax money that can be withdrawn later to cover medical bills. These withdrawals are tax free and can be used for copays, prescriptions, vision exams, dental visits, and more. While health savings options are usually offered by your employer, you can sign up for an HSA even if you’re unemployed as long as you’re enrolled in a high-deductible health plan. Annual contribution limits for HSAs are $4,150 for individuals and $8,300 for family coverage, and $3,200 for FSAs.

There are a few major differences between HSAs and FSAs, but HSAs allow a lot more flexibility — HSAs belong to you forever, while FSAs are owned by the employer and forfeited if you decide to work elsewhere. With an HSA, you can carry over unused funds year after year, while funds expire at the start of each new benefit year for an FSA. You can also invest the money in your HSA to generate compound interest over time.

Utilize Tax Deductions

If you pay a substantial amount for medical coverage in a given year, you may be able to write off those charges on your annual tax filing. Visit the IRS website and take a quick 15-minute survey to help you determine whether you’re eligible to deduct your medical bills. Potential deductions include hospital stays, prescription medications, and doctor visits, all of which can lead to a more substantial tax refund.

One of the frustrating parts of the healthcare industry is switching insurances only to find that your lifelong doctor doesn’t accept your new plan. You can either pay out of pocket or cut ties and find a new doctor. While it might be difficult, take the latter option. Ask your doctor if they know of anyone who takes your new insurance or contact your insurance directly for some options. Choosing someone who takes your insurance plan allows you to have more procedures covered, saving you lots of money in the future.

Use Discounted and Generic Prescriptions

Nobody should be forced to pay high costs for a necessary prescription, and the good news is that you no longer have to. Generic medications are almost always just as effective and way cheaper than name-brand options, so ask your doctor if they’d be open to prescribing generic medication to help you save on costs. GoodRx and similar companies help consumers avoid inflated prescription costs by finding coupons and discounts to ensure the lowest possible cost. You can also talk to the pharmacist at your local pharmacy for help negotiating medicine costs.

Invest in Long-Term Care Insurance

While basic medical insurance covers you in the present, long-term care insurance helps you both plan for the future and save money in the long run. These insurance plans cover the cost of aides, nursing homes, and other expenses that affect us later in life. Planning ahead also helps your loved ones, since they may be responsible for your care in later years.

Reduce Medicare Premiums

If you take Medicare, you may be susceptible to surcharges depending on your income. This concept is called the Income Related Monthly Adjustment Amount (IRMAA), and it affects people with a modified adjusted gross income (MAGI) of over $103,000 for individuals and over $206,000 for couples. If you exceed those thresholds, you will end up paying more for Medicare Part B than you would otherwise. However, you can avoid these surcharges with clever money management — putting your wealth into a Roth account can help distribute your money so that you remain in a lower tax bracket. Roth accounts are pre-taxed, and can be invested so your wealth grows over time. When you’re ready to pull that money out, you won’t be taxed on the amount.

Consider Outpatient Facilities

While certain medical procedures must take place in a hospital, sometimes it’s perfectly fine to visit a more cost-effective outpatient facility instead. Common outpatient services include MRI scans, rehabilitation, and even chemotherapy — it all depends on the individual facility has available resources. Outpatient facilities often cost significantly less than hospitals because there’s no need for an overnight stay, and the staff is just as capable.

Avoid the Emergency Room

The average cost of visiting the emergency room is around $2,200 — a steep price to pay even for those who are financially well off. Assuming the condition isn’t life-threatening, you should endeavor to visit an urgent care facility instead. Urgent cares are far cheaper than the ER for both individuals and their insurance providers, but you’ll still get the same high-quality treatment — and sooner, since the wait time at urgent care centers is often less than those in the ER. 

There’s a caveat here, however. While Urgent Cares might be great for checking out concerning symptoms or injuries, if you are experiencing a true, life-threatening emergency, you should head straight to the ER. In the end, your health and safety are more important than saving the cash.