Best Ways to Save on Healthcare Costs - Part 1 - Short Term Actions
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As I’ve written elsewhere, healthcare is in flux. We are being asked to spend more, while also taking more responsibility for finding healthcare providers. The following is a more holistic answer to a recent Quora question, “what is the best way to save on the cost of healthcare?” Thanks to Deborah Soloway who provided an initial response, and inspired my own. I've broken into short term ( < 12 months), medium term ( 3 - 5 years ) and long term ( >5 years). This is the first of three installments.
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Best Ways to Save on Healthcare Costs - Part 1 - Short Term Actions
- 1. Best Ways to Save on Healthcare? Part 1 – Short Term Savings
- 2. Health care is in flux. The following was created in response to a Quora question, answered with a holistic response by another Quora contributor. I’ve expanded into three time-based phases.
- 3. Short Term Actions: 1. Shop around for healthcare services 2. Shop around for prescription drugs 3. Contribute to pre-tax savings accounts (FSAs/HSAs) 4. Diet/Exercise/Minimize risk
- 4. 1. Shop around for healthcare products and services. Increasingly there is an “internet price” for healthcare products. Use Google keywords and call providers directly. You will be surprised by what you learn.
- 5. 2. Shop around for prescription drugs. Buy in bulk, online, through large, big box retailer (Costco, Wal- mart), even grocery store pharmacies can offer competitive pricing.
- 6. 3. Contribute to pre-tax savings accounts. FSAs and HSAs offer “instant” health expense discounts by allowing you to save money pre- tax (income tax and payroll tax). This can often be 20-40% in savings.
- 7. 4. Diet, exercise and minimizing risk. Develop healthy behaviors, in particular good nutrition and exercise. Get quality sleep. Avoid unnecessary risks.
- 8. Everyone is different and each financial and health situation is unique. Experiment to find which habits and activities are best suited to your lifestyle.
- 9. With this post we focused on the short term savings in today’s healthcare environment. Future posts will cover medium and long term actions.
- 10. Thank You! Download the free HSA Coach app to manage your HSA and watch your wealth grow. Available on iOS and Android.
Editor's Notes
- Hi. This is Aaron Benway from HSA Coach. Today we will provide you with part 1 of a three part series on how to save on healthcare costs.
- As I’ve written elsewhere, healthcare is in flux. We are being asked to spend more, while also taking more responsibility for finding healthcare providers. The following is a more holistic answer to a recent Quora question, “what is the best way to save on the cost of healthcare?” Thanks to Deborah Soloway who provided an initial response, and inspired my own.
- But how does this new long term savings strategy - generally saving for retirement health expenses inside an HSA - square with the much more familiar 401(k) retirement savings?
- There is a growing body of healthcare providers who are advertising online and in new media (like Pandora). They want to reach the healthcare shopper, and will provide you deals for your healthcare business. The traditional bundling of insurance and reimbursements is expensive, and if they can reach you through low cost online marketing efforts, both you and the provider can win with lower costs.
- Prescription drugs are expensive. Yet drugs are standardized, meaning a pill at one store is the exact same as a pill found at the next provider. One of the best, easiest ways to save money on drugs is to shop around. Whether it is saving money through bulk discounts, buying at Costco, even comparison shopping your grocery store pharmacy, there are deals out there. Start looking.
- Make sure you contribute to your Flexible Spending Account or Health Savings Account to set aside money pre-tax for healthcare related expenses. Using these accounts to pay for your medical bills is like receiving an instant 20-40% off the price of the service, drug or other qualified medical expenses. And remember that HSA funds never expire. Think of an HSA like you would your 401(k), with even better tax savings.
- One of the best ways to minimize healthcare costs, simply, is to stay healthy. We know more now about what promotes good health than at any time in history, and the importance of diet and exercise cannot be overstated. Sleep is important as well. Finally, many of the one-off, and expensive injuries, occur from poor planning. As you age your body won’t respond the way it did as a teenager. Adjust your lifestyle, develop sustainable habits to create the healthiest “you” possible.
- Remember that everyone is unique. The most important rule is to find the activities that become habits you can automate so they become seemingly effortless.
- Finally, with this post we focused on the short term activities. Things you can start doing today. In subsequent posts we will discuss medium and long term strategies you can incorporate over time.
- Hang tight. We’ll publish more.