11 Ways To Save Money On Health Care and Insurance

There are various ways you could lower your health insurance premium such as switching to a plan with a higher deductible, looking into government-subsidized coverage or enrolling in a plan through work. In addition, you could lower the amount you are personally responsible for spending on health care by taking steps like improving your health, visiting providers who contract with your insurance carrier or opting for generic drugs.

Continue reading to learn more about how to save on health insurance and the importance of comparing rates from multiple health insurance companies before joining a health plan.

1. Review Your Health Insurance Coverage

First, you should evaluate whether your current level of coverage is necessary or whether you could reasonably cut back. For example, if you did not need to access medical care at all last year and don’t expect your health care needs to change this year, then you could probably switch from a plan in the gold tier to a bronze or silver plan since these plans come with lower premiums in exchange for higher out-of-pocket costs when you access health care services.

On the other hand, you should keep in mind that the plan with the lowest monthly premiums may not be the cheapest in the long run depending on your circumstances. For example, if you have a chronic health condition and need to receive treatments frequently, it may be better for you to have a gold or platinum plan with a higher premium so you can pay less out of pocket each time you are treated.

2. Make Healthy Decisions

Making lifestyle changes like exercising regularly and eating healthier can lead to substantial health care savings by minimizing your need for medical care. It’s estimated that individuals with obesity spend $10,000 more on care for diabetes, heart disease and similar conditions over the course of their lives than people without obesity.^[1] Meanwhile, Americans collectively incur around $50 billion worth of medical bills related to cardiometabolic diseases each year due to poor eating habits.^[2]

You should also note that health insurance companies are allowed to charge you up to 50% more for coverage if you are a tobacco user.^[3] As a result, making the decision to quit smoking may not only make you healthier and lower your need for health care but could also lead to a direct drop in your monthly premiums.

Additionally, you should take advantage of preventive care benefits, which comprise a wide array of screenings, immunizations and other services that are fully covered by health insurance with no out-of-pocket costs, even if you haven’t met your deductible for the year.^[4] Along with being free themselves, these services can lower your health care costs in the long term by increasing the odds that you will prevent health problems or catch them early so you can avoid costly treatments later on.

3. Choose In-Network Providers

It’s generally cheaper to receive medical care from doctors and hospitals that contract with your insurance company and may even be a requirement depending on the type of plan you have. Exclusive provider organization (EPO) and health maintenance organization (HMO) plans don’t cover out-of-network care at all except in emergencies, while point of service (POS) and preferred provider organization (PPO) plans require you to pay more in out-of-pocket costs when you visit a provider outside of the plan’s network.^[5]

Depending on your circumstances, you may also want to see if you could be diagnosed or treated by a physician virtually. Telehealth visits are often cheaper than comparable in-person visits and are covered by many health plans.^[6]

4. Take Advantage of FSAs and HSAs

Health savings accounts (HSAs) and flexible spending accounts (FSAs) both allow you to set aside money on a tax-free basis that you can later put toward medical expenses that aren’t covered by your health plan or use to take care of your share of the costs for medical expenses that are covered by your health plan.

You must be enrolled in a high-deductible health plan (HDHP) to qualify for an HSA and money that is deposited into the account will roll over if you don’t spend it by the end of the year.^[7] Conversely, you can only attach an FSA to a plan you receive through your employer and money that is deposited into the account usually doesn’t carry over from one year to the next.^[8]

5. See if Your Health Care Costs Are Tax Deductible

There are several medical and dental expenses that are tax deductible if you itemize deductions on your tax return including the following:^[9]

• Outpatient medical services
• Inpatient care in a hospital or nursing home
• Acupuncture treatments
• Weight-loss programs related to a disease diagnosed by a doctor
• Insulin and other prescription drugs
• Hearing aids, glasses or contacts, false teeth, guide dogs and durable medical equipment such as crutches or wheelchairs
• Transportation to a conference related to a chronic illness and other transportation related to essential medical care

You should note that you can only deduct the amount you spend out of pocket on these services that is greater than 7.5% of your adjusted gross income (AGI). Health care costs that are covered by your insurance company or that you receive some other reimbursement for are not tax deductible.^[9]

6. Plan Ahead for Unexpected Medical Expenses

No matter how healthy your lifestyle is, you could always get into an accident or experience some other emergency that causes you to rack up large hospital bills, so you should make sure you have enough money in savings to cover your health insurance deductible and any copays you can expect to incur following an accident. Remember that, if you opt for a high-deductible bronze or silver plan, you’ll need to set more money aside to cover the deductible than you would for a gold or platinum plan.

You should also make a plan for where and when you will receive care depending on your symptoms.

Mild but persistent symptoms may be addressed by a visit with your primary care physician (PCP) whenever you can get an appointment, while you may want to head straight to an urgent care center if you’re experiencing moderate cold symptoms, a sore throat or an infection.^[10]

Meanwhile, you should go to the emergency room right away if you have a sudden onset of very serious symptoms, are struggling to breathe or move a certain body part properly or believe you may be experiencing a life-threatening condition such as a stroke or heart attack.^[10]

7. Buy Generic Prescription Drugs When Possible

Generic drugs are often 80% to 85% cheaper than their equivalent brand-name drugs, so you should opt for generic variations of any medications you have been prescribed if they are available.^[11] Another option for saving on medicine is searching for discounts or coupons using a platform like GoodRx.

8. Check if You Qualify for Government Assistance

If you shop for coverage through the Health Insurance Marketplace, you may qualify for income-based subsidies that can make health insurance or health care more affordable. Premium tax credits lower your monthly premium payments, while cost-sharing reductions lower your out-of-pocket costs when you receive health care as long as you are enrolled in a silver plan.^[12]

Additionally, you may qualify for free or low-cost coverage through a government-sponsored program like Medicaid or the Children’s Health Insurance Program (CHIP) based on your income, your disability or potentially other factors.

9. Get Added to a Family Member’s Plan

Most married couples are covered by the same health plan and this is generally the best option if one partner already has better coverage than the other going into the marriage and is allowed to add their spouse to their plan. It’s also worth noting that married couples may collectively reach the out-of-pocket maximum for a shared plan more quickly than they would for separate plans, making it a cost-effective way to take full advantage of their health coverage if they expect to need medical care regularly.^[13]

Furthermore, it’s generally cheaper for larger families to keep every member of the family on the same plan since health insurance companies are not allowed to take more than three children under the age of 21 into account when setting rates for family health insurance plans.^[14]

Keep in mind that you can generally only join someone else’s health plan if you are their spouse, domestic partner or dependent child and you typically cannot stay on your parents’ health insurance plan past the age of 26 unless you have a qualifying disability.^[15]

10. Find Out if Your Job Offers Coverage

If you’re not already enrolled in an employer-sponsored group health insurance plan, ask someone in your human resources department whether you are eligible to join one. Job-based plans are the most common type of health insurance in the United States and employers generally cover around 70% to 80% of the premium depending on whether you opt for family or single coverage, potentially making it more affordable than Marketplace health insurance depending on your situation.^[16][17]

Alternatively, you may be able to lower your health care costs by taking advantage of an employee assistance program (EAP) if your employer offers one. EAPs can offer certain services like counseling and referrals for free, allowing you to receive support with mental health and substance abuse disorders, grief, stress, family problems and more without having to spend any money out of pocket or take advantage of your health insurance.^[18]

11. Compare Your Health Coverage With Other Plans

Health insurance carriers may have different methods for calculating premiums, so it’s important to compare quotes from three to five insurers to see if one of them can offer you a more favorable rate than another. When you shop through SmartFinancial, you only have to fill out a single questionnaire before we connect you with agents who can help you sift through various health plans. Click here to compare health insurance quotes for free today.

Keep in mind that you can generally only sign up for a new health plan during open enrollment — which lasts from November 1 to January 15 for Marketplace plans in most states but may occur at a different time if you enroll through work — or during a special enrollment period triggered by a qualifying life event that significantly changes your health care needs.^[19]