How to Save on Medical Costs

Medically Reviewed by Dan Brennan, MD on August 18, 2021
Written by Cheryl Whitten
4 min read

Medical bills can quickly lead to troubling medical debt and stress, but there are ways to save on medical costs.

One of the important ways to save on medical costs is to know your insurance plan. Read your insurance information closely and know what costs you’re responsible for. ‌

Check whether you have a copay that requires you to pay a fixed amount of your medical expenses or a deductible that requires you to pay a specific amount before your insurance starts to pay.‌

Check which expenses are covered and by how much, and which expenses are not. Know the formulary, or the list of medications your insurance company will cover. This can help you avoid unexpected costs.

Most health insurance plans want you to use certain hospitals, doctors, and pharmacies because they belong to a certain network. If you use a service or provider outside of this network, your insurance provider might make you pay more of the cost or all of it. This is called an out-of-network bill. ‌

To avoid these bills, talk to your insurance company and ask for a detailed list of providers and pharmacies you can use. If your doctor wants to refer you to a specialist, a hospital, or for testing, check with your health insurance first for an approved list. Then ask your doctor to refer you to those specific services. 

Medical costs vary a lot, especially by provider. You can find doctors in the same area and network with different fees, so it’s important to shop around. ‌

You can find doctors’ fee information with the cost estimator tools on your insurance provider’s website or through other organizations. If the non-emergency services are the same but cost less, choose the cheaper option. This will make a difference if you have to pay some out-of-pocket expenses or have a copay. 

Ask more questions if your doctor recommends a new type of test, something experimental, or expensive tests like magnetic resonance imaging, called MRI. Ask your doctor if the test is necessary and how it will help. 

Under the Affordable Health Care Act, most people with insurance can get certain services for free as long as they're in the network. These are preventative services that help you maintain good health. They include services like:

Some services are free for your children, too. These include newborn blood screening, fluoride varnishes, eye tests, and wellness visits, among other things. 

A health spending account is a benefit account that you can pay money into and use for medical expenses. These are usually for certain medical, dental, and vision expenses that your plan doesn’t cover. ‌

Sometimes your employer will contribute to a health spending account as part of a benefits package. You can also pay into the account and use the funds to cover predictable medical expenses. This is usually deducted from your paycheck before taxes.‌

If you have a qualifying medical bill, you can submit it to your employer and they will reimburse you with funds from your health spending account. Sometimes you might get a debit card for that account that you can use to pay the bill directly.‌

The benefit of a health spending account is that you can plan and budget your medical bills and you can use it to pay for bills that normally aren’t covered. You can also use it to save on tax.

Sometimes you can negotiate a better price if you pay upfront with cash and skip going through insurance. Before you have the procedure or test, ask the service providers in your network if they offer cash discounts. 

It’s still important to have health insurance, but cash can work well for medical costs like:

  • Prescription drugs
  • Physical therapy
  • Out-patient surgeries
  • Some blood tests
  • X-rays
  • Ultrasounds
  • Computed tomography scans, or CT scans

Almost every brand name prescription has a generic form that costs less. Brand name drugs usually have a higher co-pay, so getting the generic drug can save on medical bills. Make sure the drugs are covered on your insurance plan and ask your pharmacist for the generic type when you fill your prescription.

The best way to save on medical bills is to stay healthy. Limit how much alcohol you drink, stop smoking, and invest in regular exercise, healthy eating, and a good sleep routine.