Don’t let your health affect your wealth: How to save on healthcare costs

By Maria Perez

Health care is an important part of our daily lives – and the costs can add up. According to the U.S. Bureau of Labor Statistics, the portion of the American household budget spent on health care has gradually risen from about 5.3 percent to about 5.9 percent.1 These costs typically include health insurance premiums, co-payments and other out-of-pocket expenses like medications, doctor's office visits and over-the-counter remedies. So how can you take care of your health without breaking the bank? Here are some tips:

Know before you go
Before you visit a doctor's office, get tests done or have surgery, you can find out the cost from providers in your area based on your health insurance coverage. A little research can save you a lot of money. And some insurance companies offer online tools like calculators to estimate out-of-pocket expenses.

Be wise – strategize
It's likely that the majority of your healthcare costs each year are routine, so you can build those expenses in your budget. Take a look at your expenses from last year, talk to your doctor about any planned tests or procedures, and see if there's a possibility to shift a nonessential procedure to the next year. This can help you avoid maxing out your benefits and save money.

Save where you can
Consider using the mail-order option for routine medications, and find out if there are generic forms of your medications available – both these options often lead to savings. A Flexible Spending Account (FSA) may also be a good option. And, remember: if you still have money available in your FSA at the end of the year, think of ways that you can use that money before the end of the calendar year.

Make a plan
Out-of-pocket healthcare costs may seem overwhelming at times, but unpaid medical bills can affect your credit report if they are sent to a collection agency.2 The good news: You can work with your doctor or hospital to establish a reasonable payment plan for any high-cost procedures.

Stay healthy, save money
One of the best ways to save on health care is to stay healthy. So take advantage of any wellness incentives from your employer or insurance provider.

Health insurance 101

Familiarizing yourself with your health insurance coverage can help you save. Here are some questions to ask:

  1. What is the difference in my insurance coverage for a doctor or hospital that is in-network vs. out-of-network?

  2. What is the difference in my insurance coverage for a visit or procedure that is inpatient vs. outpatient?

  3. What is my annual deductible?

  1. What is my out-of-pocket maximum?

  2. What is my co-payment amount per office visit? (primary care and specialist)

This article is based on information available in January 2018. It is for general informational purposes only. It is not intended to provide specific financial, investment, tax, legal, accounting, or other advice and should not be acted or relied upon without the advice of a professional advisor. A professional advisor will recommend action based on your personal circumstances and the most recent information available.

1Bureau of Labor Statistics. "Health care." http://www.bls.gov/spotlight/2009/health_care/. N.p. November 2009, n.d. September 2014.

2Experian. "Unpaid hospital bills can affect your credit." http://www.experian.com/ask-experian/20081112-unpaid-hospital-bills-can-affect-your-credit.html. N.p. unknown, n.d. September 2014.