6 Healthcare Hacks That Could Cut Your Costs by $3K Yearly
Healthcare is one of the biggest expenses many families face. The average working family spends $3,960 per year on health insurance premiums and out-of-pocket medical costs, according to the Center for Economic Policy Research.
While medical bills aren’t typically avoidable, there are a few savvy moves you can do to slash hundreds, or even thousands, of dollars from your yearly bills. Here are six healthcare hacks that could help you save as much as $3,000 this year.
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1. Go to In-Network Health Providers
Before scheduling an appointment, check your insurance company’s online provider directory or call your insurer to verify that your provider, as well as any specialists you’re referred to, are in-network.
In-network health providers have lower rates for services with your insurance plan. There’s also no balance billing, which is when a healthcare provider bills you for the difference between the total amount and what your insurer agreed to pay.
According to Insurance Enterprise, choosing an in-network provider could cut your healthcare costs by up to 80% for certain services.
2. Use Generic Medication
Generics can cost 80% to 85% less than name-brand drugs, according to the Federal Trade Commission. That’s a lot of savings for what is, chemically, the same medicine.
Once a drug’s patent expires, other companies can make it using the same active ingredients, strength, dosage and quality. The U.S. Food and Drug Administration requires generics to meet the same standards as brand-name drugs, so the price difference isn’t a quality trade-off.
Next time you get a prescription, ask your doctor or pharmacist whether a generic version is available. It’s one of the easiest ways to cut your costs without changing anything else about your care.
3. Choose the Right Healthcare Plan
Before choosing a healthcare plan, compare each plan’s monthly premium, deductible, copays, coinsurance and out-of-pocket maximum. The cheapest premium doesn't always mean the cheapest overall plan.
If you have ongoing health issues, visit the doctor often, take regular prescriptions or have a procedure coming up, paying a higher monthly premium could lower your out-of-pocket costs and save you more money.
4. Use Your HSA
If you’re enrolled in a high-deductible health plan, you may be eligible to contribute to a Health Savings Account (HSA). This type of account lets you contribute pre-tax dollars to pay for qualified medical expenses, including deductibles, copays, prescription medications and some over-the-counter items.
According to Fidelity, HSAs offer a “triple tax advantage”:
Contributions reduce your taxable income.
Your money can be invested and grow tax-free.
Withdrawals for qualified medical expenses are tax-free.
5. Negotiate Your Medical Bills
Just because you receive a medical bill doesn’t mean it’s set in stone. Many doctors’ offices and hospitals are willing to lower bills or offer payment arrangements, especially if you’re paying out-of-pocket or experiencing financial hardship.
Start by requesting an itemized bill and checking it for errors like duplicate charges or services you never received. If it looks correct, contact the provider’s billing department to ask whether they offer discounts for paying in full or have any financial assistance programs. Even if they can’t reduce the amount, spreading the payments out can help make your medical debt more manageable.
6. Deduct Medical Expenses
The IRS allows you to deduct certain medical expenses if you itemize deductions on your federal tax return. According to their website, you can deduct qualified medical expenses that exceed 7.5% of your adjusted gross income (AGI).
Eligible expenses may include doctor’s visits, hospital care, prescriptions, medical equipment, mental health services and transportation costs related to medical care. Reimbursed expenses or those paid with an HSA or Flexible Spending Account (FSA) don’t qualify.
The Bottom Line
You don’t have to master all six hacks today. Pick the one that matches your situation right now, whether that’s checking a provider’s network status before your next appointment or calling the billing office about a discount. One small move can save real money, and the rest will be easier to tackle later.
This article was provided by MoneyLion.com for informational purposes only and should not be construed as financial, legal or tax advice.
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