Maximizing Health, Minimizing Costs: 10 Strategic Ways to Reduce Your Healthcare Spending

With increasing healthcare costs posing a challenge for most individuals and families, it’s important to explore different strategies to manage these expenses. Nearly four in ten people reported deferring medical care in 2022 due to the prohibitive costs. That’s the highest on record since Gallup first asked that question in 2021. Thus, the need to control health care spending has never been more apparent.

Here are 10 proven strategies to help you take control of your healthcare spending, both in the present and in the future:

1. Embrace Preventive Care

Preventive care, including immunizations, annual physicals, dental cleanings, and cancer screenings, are usually low-cost or free. These services can nip potential health problems in the bud and maintain your overall health, thereby saving you from substantial medical expenses down the line. Benjamin Isgur, Vice President of Health Care Thought Leadership at Fidelity Investments, advises, “Take advantage of all the preventive care that comes with your plan.”

2. Understand Your Health Plan Options

Health insurance plans can be complex, making it crucial for you to understand their nuances. Look at the premium costs, in-network providers, deductibles, prescription coverage, and annual out-of-pocket maximum. Also, reflect on your historical healthcare usage to make an informed choice, as the past can guide your decision, albeit not perfectly.

3. Stay In-Network

Using providers in your plan’s network is generally the most cost-effective option. Seeing out-of-network doctors often results in high out-of-pocket costs. Confirm the network status of your providers, especially if you have a chronic condition that requires regular visits to specialists.

4. Make Use of an HSA

A Health Savings Account (HSA) allows you to contribute pre-tax dollars to be used for numerous qualified medical expenses. The money in an HSA rolls over from year to year and stays with you even if you switch jobs. For 2023, you can contribute up to $3,850 for individual coverage and $7,750 for family coverage. If you are 55 or older, you can make additional “catch-up” contributions.

5. Utilize a Health Care FSA

A Flexible Spending Account (FSA) enables you to set aside pre-tax money for qualified medical expenses. In 2023, you can save up to $3,050. Keep in mind that FSAs often have “use it or lose it” rules, so plan your contributions carefully.

6. Leverage All Employer Benefits

Employers often offer health-related perks like nutritional coaching, gym membership reimbursement, or free mental health services. Taking full advantage of these benefits can significantly reduce your out-of-pocket healthcare spending.

7. Save on Prescriptions

Using generic drugs when available can save you a significant amount. Also, consider using your plan’s preferred pharmacy or using mail-order services for long-term prescriptions to enjoy further savings.

8. Review Your Medical Bills

Approximately 43% of adults have received a medical or dental bill that they thought contained a mistake. Be vigilant and review your bills carefully before making a payment.

9. Address Health Issues Promptly

Ignoring health issues often leads to more serious and costly problems down the line. It’s important to seek medical advice promptly to avoid expensive treatments later.

10. Lead a Healthy Lifestyle

Adopting healthy habits like regular exercise, a balanced diet, quality sleep, and stress management can reduce the risk of health issues in the future, thereby lowering your overall healthcare costs. As Sharma says, “If you invest in your health now, that will pay dividends.”

In conclusion, while healthcare costs continue to rise, a proactive approach towards understanding your health plan, making smart choices, and maintaining a healthy lifestyle can help you significantly reduce your healthcare spending. Stay informed, make smart choices, and invest in your health – the benefits are worth it!