How to Save Money on Health Care

health careHealth care continues to get more and more expensive each year.  And it is one expense that everyone incurs at some point in their life.  As such, it is important that you understand the drivers of health care costs, and what you can do as an individual to save money on all costs associated with your health.

Lower Health Care Costs by Avoiding the Doctor

The easiest way to save money on health care is to avoid your doctor!  This may sound odd, but if you eat right, and maintain a fit lifestyle, you can hopefully remain healthy enough to avoid going to the doctor.

However, everyone falls ill or injures themselves at some point.  For routine problems, you still may want to avoid the doctor and check out the retail clinics offered in many pharmacies or retail stores.  These offer low cost treatment options, and offer the same quality of care as a regular doctor’s office.

Finally, try to avoid the Emergency Room at all costs, unless it is truly a life threatening emergency.  The average cost of an emergency room visit is in excess of $750, so unless you really need to get help, don’t go there.  Head to urgent care or your doctor instead.

Shop Around

The next trick to saving money on health care is to shop around.  Many people don’t do this, and just pay whatever their regular doctor offers.  The most common item you can shop for is a prescription.  You should ask your doctor if you need the name brand pill, or if a generic medication will do.  Many pharmacies offer generic prescriptions for as low as $4, versus upwards of $50 to $100 for the name brand item.

There are also a lot of medical devices you can shop around for.  A common one is contact lenses.  You can shop online at stores like 1-800-Contacts and save a bundle on your contacts versus getting them directly from your eye doctor.  This is true for many other items as well.

Use a Flexible Spending Account

Finally, if your employer offers a flexible spending account, take advantage of it.  You can use pre-tax dollars to fund your flexible spending account, which you can then use to pay for your health care needs.  This saves you the tax you would have normally paid on the money, which is essentially a savings of around 20-30%, depending on your tax bracket.

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14 Responses to How to Save Money on Health Care

  1. Jim Hayes 10/03/2012 at 1:35 pm #

    The savings you get through a Flexible Spending Account is typically between 27% to over 40% depending on the tax bracket you are in because you save Federal, State and FICA (7.65%) taxes.

    For example, here in Colorado most people are at least in the 15% tax bracket, have 5% state taxes, and 7.65% FICA equalling almost 28%. Higher wage earners save even more.

    • Paul 10/04/2012 at 1:29 pm #

      The down side is that if you don’t spend it you lose the balance. A healthcare savings account avoids this problem. That is a great point Jim about living in a state that has income tax.

  2. JP @ My Family Finances 06/17/2012 at 11:05 am #

    I’d also avoid the co-pay plans if your employer offers several choices. Most plans that have you pay out of pocket with your PCP are cheaper than the extra $50-$100 to see your doctor every now and then.

    • Paul 06/18/2012 at 4:34 am #

      The $20 co-pay I have to see my PCP are nothing compared to the $1000 out of pocket deductible!

  3. Daisy @ Add Vodka 06/16/2012 at 4:10 pm #

    We’re lucky here in Canada – free healthcare! But, there are always special things we might need to spend money on, like medications if we don’t have “benefits” (ie, employer covered insurance).

    • Paul 06/16/2012 at 6:19 pm #

      We live in Phoenix, Arizona and there is a large number of Canadians who Winter here. Now it all makes sense! 😉

  4. Kurt @ Money Counselor 06/16/2012 at 2:12 pm #

    My wife and I took rather a extreme measure partly to slash our health care and health insurance costs: We moved to Canada!

  5. krantcents 06/15/2012 at 6:22 pm #

    I have used Flexible Spending accounts for years. Using pretax dollars is a great way to reduce medical costs.

  6. Eric J. Nisall - DollarVersity 06/15/2012 at 5:57 pm #

    I never like the FSA due to the “use it or lose it” clause. I mean, how the heck is one to be able to predict how much they will need in healthcare or dependent care costs.

    Actually any kind of cafeteria (sec 125) plan would be a benefit to people, since all monies contributed are pre-tax dollars. The all have their own specific rules, but it’s always advantageous to get as much you can exempt from payroll taxes.

    • Paul 06/15/2012 at 6:30 pm #

      Not everyone has access to a Health care spending account which as you point out Eric is preferable since you can roll over any unused balance. The FSA is the next best thing.


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