6 Ways to Limit Health Care Costs
Living longer is nice, but paying more for health care isn’t. There are, however, a few strategies you can consider to help limit those rising costs.
- (opens in new tab)
- (opens in new tab)
- (opens in new tab)
- Newsletter sign up Newsletter

Health care costs have been rising. Part of the reason could be an increased reliance on emergency care, but a lot of it could be chalked up to an aging population. People have a better chance of getting a disease or ailment the longer that they live. In 1960, newborns in the U.S. could expect to live slightly more than 71 years. Now they can expect to live just under 79 years.
Here are six ways to help you navigate the health care cost maze and potentially save:
1. Coordinate plans
Two-income couples should coordinate their insurance benefits. It might make sense to opt out of one plan and choose the family option on another. On the other hand, maintaining coverage with two providers can make sense, if one fills the gaps of the other. For example, one spouse may have better options for prescriptions, a lower deductible or a wider network of physicians. Then, the other may be able to take the insurance benefit as a lump sum benefit. A growing number of employers are offering a “cash in lieu of” or “pay in lieu of” benefits option, under which the employer offers a taxable “opt out” amount if an employee declines coverage because they’re covered under their spouse’s health plan.

Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
2. Check your bills
According to a Consumer Reports survey (opens in new tab) from 2014, 7% of patients found serious errors in their hospital bills. Those who paid $2,000 or more out of pocket for their care were twice as likely to find errors. These errors can range from typos and wrong codes all the way to forgetting to declare prior authorization for tests, procedures or seeing specialists. If you spot an error, then send a certified letter requesting a corrected bill and a copy of all documentation to your insurer, and contact the billing departments of both the insurance company and the physician’s office.
3. Follow doctor’s orders
The Centers for Disease Control and Prevention (CDC) reported in September 2016 that one in four Medicare participants age 65 or older with blood pressure issues—around 5 million people—do not take their blood pressure medicine as directed. In fact, 20% to 30% of prescriptions for chronic health conditions are never filled, and about half are not taken as prescribed, according to the CDC. Between $100 billion and $300 billion of avoidable health care costs have been attributed to non-adherence in the U.S. annually, representing 3% to 10% of total U.S. health care costs, according to a Johns Hopkins study (opens in new tab).
4. Use medical expense deductions
If you incur extraordinary medical expenses in one year, you can deduct from your taxable income the medical costs that exceed 10% of your adjusted gross income (AGI). This can include out-of-pocket insurance premiums and a host of other expenses. See IRS Publication 502 for the complete list, and talk to you accountant about how the deduction may apply to you. For example, if you earned $80,000 in AGI, then your threshold is $8,000. Let’s say that you incurred $10,000 of medical expenses. You could write off $2,000 on your tax return.
5. Know your plan benefits
Take advantage of the free and discounted services offered by your health plan. Many providers subsidize flu shots, gym memberships, nutrition classes, health-risk assessments and other preventive care.
6. Explore a Health Savings Account (HSA)
If you have a high-deductible health insurance plan with lower premiums, then you may wish to explore an HSA. Funds contributed are not taxed when deposited, if made through your employer. And if you're on your own, they are 100% deductible (up to the legal limit). Withdrawals to pay qualified medical expenses, including dental and vision, are never taxed. Interest earnings accumulate tax-deferred, and if used to pay qualified medical expenses, are tax-free. Finally, you can invest the money should you wish to take advantage of potential compound interest.
Did you know? One of the best ways to save on overall medical expenses is to take care of yourself and your home. Bad habits can be costly, in both higher premiums for insurance and long-term expenses. Practice good hygiene, and take steps to avoid accidents at home. Small changes today can lead to better results in the future.
This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.
Justin J. Kumar embraces a proactive, systematic investment management approach with a customized, proprietary system to help guide his clients toward their financial goals.
-
-
How to Get Your Long-Term Care Planning on the Right Track
Many of us are not as prepared as we should be, but it’s not too late. Taking these steps today can get you started on planning for your long-term care.
By Stephen B. Dunbar III, JD, CLU • Published
-
Stock Market Today: Tech, Bank Stocks Lead Markets Higher
Retailers were big gainers, too, thanks to strong earnings from Lululemon Athletica.
By Karee Venema • Published
-
How to Get Your Long-Term Care Planning on the Right Track
Many of us are not as prepared as we should be, but it’s not too late. Taking these steps today can get you started on planning for your long-term care.
By Stephen B. Dunbar III, JD, CLU • Published
-
How to Protect Your Cash and Investments in a Banking Crisis
A focus on FDIC insurance and Treasury-only money market or bond fund options can help safeguard investments when a banking crisis threatens.
By Peter Newman, CFA • Published
-
Maximize Charitable Giving Tax Savings and Give All Year
Thinking of December as ‘contribution season,’ paired with using tax-savvy giving tools, can help you spread the generosity all year long.
By Mark Froehlich, CPA, MBA • Published
-
Protect Your Retirement: Seven Things You Can Do Right Now
Whether you’re preparing to retire or already retired, a proactive plan is critical to help safeguard your retirement, especially amid uncertainty.
By Jessica Cervinka, IAR • Published
-
Buffer ETFs Can Limit Investing Losses in Uncertain Times
Doing your own risk-reward investing analysis might be easier said than done, especially when markets are volatile. That’s where buffer ETFs can come in handy.
By Kirk Tushaus • Published
-
Three Ways Technology Will Fix What's Broken in Philanthropy
Charities stand to benefit from evolving fintech and artificial intelligence that will make charitable giving more efficient, transparent, relevant, collaborative and impact-focused.
By Stephen Kump • Published
-
Four Steps for Teens Who Want to Test the Investing Waters
Teens who feel ready to try their hand at investing should first get educated, with adult supervision, and then it’s all about diversify, diversify, diversify.
By Kerim Derhalli • Published
-
Is Retirement in 2023 Still Possible?
Yes, it is, if you have a customized plan specific to your retirement. If you do, you’re in the minority, though, so here are some ways to develop that plan.
By Nicholas J. Toman, CFP® • Published