How to Save Money on Healthcare

By Rita Cunha | January 28, 2021

It’s no secret that U.S. healthcare costs are among the highest in the world. The bad news? Healthcare costs seem to be rising and taking an ever-growing chunk of the GDP (gross domestic product) per capita. Administrative costs and complicated insurance agreements seem to be behind the astronomical prices. So how are budget-conscious Americans supposed to bear the burden of healthcare?

The reality is that for many, healthcare is unaffordable. Despite the passing of the Affordable Care Act (ACA), millions are still uninsured and have trouble paying their hospital bills. However, there are some clever ways to save money on healthcare without compromising your safety. Today, we take a look at some of them.

How Much Does Healthcare Cost? Average Cost Breakdown

Both the Journal of the American Medical Association (JAMA) and the Kaiser Family Foundation (KFF)—two prestigious household names in the field—have reported that health expenditures are getting higher every year. In fact, it has never been this expensive to be seen by a doctor, ever. And that is counting the patients who are covered by Medicaid and Medicare.

But just how much can you expect to spend when you get medical care? Let’s look at an average cost breakdown. Keep in mind that these figures vary from state to state and between different hospitals and clinics.

Routine Checkups

If you don’t have health insurance, you could be looking at paying around $100 for a 15-minute routine check-up with your local doctor. The cost is even higher if you add on other types of healthcare services (for instance, additional tests). If you are insured, then that amount is somewhat lower.

Medication

On average, Americans spend $1,200 per year on prescription drugs. Of course, this number varies drastically from person to person. An elderly person with medical conditions will most likely go over that amount, especially if they aren’t enrolled in an insurance plan. Similarly, those living with a chronic condition that requires a lot of medical treatment will also go over that threshold.

Emergency Hospital Visits

Put simply, going to the emergency room can cost you several thousands of dollars if you need intensive care and don’t have health insurance. Inpatient hospital care is especially expensive, with the bill getting longer the more nights you spend in the hospital. Quick visits where you are just an outpatient will be cheaper, though.

12 Ways to Save on Healthcare Costs

Do those numbers scare you? They probably do. The costs of the healthcare system in the United States aren’t for the faint of heart (or faint of wallet). Fortunately, there are some ways you can save on healthcare costs.

1. Invest in Preventative Care

The easiest way to save on healthcare is to invest in preventative care. If your doctors notice something wrong early on (for example, a small lump or unhealthy numbers in your bloodwork), they can treat it more effectively—and more affordably. In a twisted way, you have to spend money to save money on the cost of healthcare.

2. Shop for Prescriptions and Procedures

Secondly, if your doctor prescribes medication or recommends you undergo a procedure, search for better prices. You would be surprised at how different hospitals and pharmacies in the same city charge such different prices. Remember to shop around for the best deal! It can save you hundreds of dollars.

Get a little extra help from sites like Swagbucks, which offers you dozens of deals on different prescriptions and cash back when you shop at popular pharmacies. Get your medication at a reduced rate or get other perks when signing up through the Swagbucks programs. Why not look into it if it can save you money?

3. Choose the Right Healthcare Plan for You

It’s a good idea to look into getting health insurance. There are so many types of payer systems—from HMO to PPO—there is bound to be one that’s right for you out there.

4. Opt for Generic Drugs

Generic drugs are a lot like no-brand products. They are cheaper than the drugs made by huge pharmaceutical companies and have the same active ingredients as their brand counterparts. Ask your doctor to prescribe you generic drugs—or at least to point you in the direction of which ones are best suited for your needs. You can save thousands of dollars this way.

5. Ask for Free Samples

Pharmaceutical sales reps supply a lot of free samples to doctors, especially when the drugs are new on the market. Your local hospital may have a large stock of these that they are willing to give away for free.

6. Apply for Patient Assistance Programs

If you are having a really hard time affording your prescription drugs, Patient Assistance Programs (PAPs) can help. These programs are sponsored by pharmaceutical companies, meaning you could have your life-saving medication for very cheap (or free). You just have to provide proof of your financial struggles.

7. Know Your Insurance’s Policy

When you get health coverage, your insurance company should tell you which doctors and hospitals they have agreements with. If you visit one of those, your copays will be significantly lower. Thus, it’s your responsibility as the enrollee to know all about this.

Moreover, call your insurer to find out how they are handling the COVID-19 pandemic. Some are charging very low amounts for testing, hospital care, and vaccines. If you do have an emergency, knowing their policy will come in handy.

8. Ask All the Questions!

You are entitled to ask any and all questions to your health care providers. Unsure of what medical services you are being charged for? Ask for an itemized bill. Don’t think you should be paying for things included in your bill? Bring this up to your hospital and they will figure it out for you (honest mistakes do happen, and they can be costly).

9. Press Your Healthcare Insurance Company

Also, remember you can press your insurance company for answers if you aren’t happy with their service. For example, if they are refusing to cover a certain kind of treatment (and you know they should be, per your policy), ask and ask and ask. It’s better to be a nuisance than to be misled.

10. Budget and Save for Healthcare

Because our American healthcare system is so expensive, it’s imperative that you budget for emergencies and routine hospital visits every month. Plan to put aside 10 to 15% of your annual income into a savings fund for health care expenses. Moreover, if you are planning to retire soon, you should have just under $300,000 saved up per couple.

11. Open a Health Savings Account (HSA)

Why not put that money into an HSA? This type of savings account can really help you lower your healthcare costs—as it lets you set aside money on a pre-tax basis.

12. Look into Government Options

Government options (under the Affordable Care Act—or ACA) are always the cheaper route, and they can be just as good as similarly priced private plans. Medicaid and Medicare are the two biggest programs. You can check the eligibility requirements and information on enrollment at healthcare.gov.

How Much Does Insurance Really Cost?

The costs of healthcare aren’t going down anytime soon. The Centers for Medicare and Medicaid Services predict that the prices will actually go up—especially after the COVID-19 pandemic.

So, after reading all that, you can understand why so many people in the United States are insured. After all, that much healthcare spending is tough to bear by just one person. Insurance companies come in to help foot the bill. But how much do their plans really cost?

Monthly Insurance Fee

In 2020, Americans paid, on average, a whopping $456 per month for an individual plan. The cost for a family was as high as $1,152.

Do keep in mind that this amount depends on a lot of factors. For starters, a public health plan is more affordable than a private insurance one. Moreover, the state where you live and your medical history will also affect how much you pay in monthly fees to your insurer.

Deductibles

In recent years, we have seen a rise in high deductible policies. As a result, on average, Americans pay almost $5000 per year on deductibles. That means that, before an insurance company covers any costs, you have to pay five-grand in out-of-pocket costs. Even if you only use your insurance once per year.

Copayments

Lastly, there are also copayments (or coinsurance) to think about. This is a cost-sharing system that makes your insurer foot a part of the bill, leaving you to pay the rest. How much your copay depends on the type of medical service you used. Generally speaking, the copay is around $20 for a routine hospital visit, if you go through your insurance’s network.

What Health Insurance Covers (and Doesn’t Cover)

The more expensive your insurance program, the better access you will get to medical care. Cheaper plans typically restrict your access to a lot of services, generally deemed not essential. Thus, if you want to make sure you get covered for optometrist and dentist visits, you have to look for a plan that specifically mentions those services. Otherwise, you could end up having to pay for them out-of-pocket as an uninsured patient.

Is It Worth Getting an Insurance Plan?

A big part of “adulting” is weighing cost and value. That is exactly what you have to do for insurance.

Sure, you could go without insurance and not have to pay a monthly fee, deductibles, or cost-sharing and save money. Yet, if you do need medical attention, being uninsured will ensure you receive an astronomical bill. Therefore, it’s recommended (but not mandatory in many places) that you get an insurance plan to help you bear healthcare spending costs.

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