15 Tips to Help You Manage Healthcare Costs

Healthcare is expensive. We all know that, but we don't always appreciate how much. For starters, per a 2021 report from Kalorama Information, consumer out-of-pocket spending on healthcare in the U.S. was expected to top $491 billion in 2021, or about $1,650 per person. That's up about 10% over the previous year, with further annual increases expected to be about 10% for the following five years. That's an average, so it means that plenty of people pay more than that.

It gets worse in retirement, as people age and develop more health issues. The folks at Fidelity, for example, estimate that a 65-year-old mixed-gender couple retiring this year can expect to pay a total of $315,000 out of pocket on healthcare throughout their retirement -- and that doesn't even include certain expenses, such as long-term care. Clearly, all of us should use any strategy we can to keep our costs in check. Here are 15 tips to help with that.

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This is perhaps the simplest one, and arguably the best, though it can take some effort. The healthier you are, especially as you age, the less you may end up paying on healthcare. So if you're already healthy and fit, aim to stay that way, and if you're not, aim to start eating more nutritiously and to exercise more. If you're not sure where to start, your doctor may be able to suggest suitable activities and point you to a nutritionist.

Next, it's best to catch any medical condition early, for several reasons. First, it can be easier to treat and manage (and perhaps reverse or cure) when it's still in early stages. It can be far less costly, too. If you catch diabetes early, for example, you may be able to keep it well in check before it damages organs too much. If you catch colon cancer early, you may be able to avoid surgery and the spreading of the cancer. Regular preventive care screenings such as colonoscopies, mammograms, and even blood tests can catch all kinds of problems early.

ALSO READ: How to Save on Healthcare in Retirement

Clearly, it's also important to go to the doctor regularly. Don't think you're saving money by not doing so, because if various conditions are left undiagnosed too long, they can cost you far more later. It may not be fun to go to the doctor, but most doctors really want to help you get in better health. And while you're there, you might save some money by asking if your physician has any free samples of drugs you take. Doctors often receive samples that they can give out.

These days, for various reasons, many people head to the emergency room when they really shouldn't -- and it ends up costing them much more. Many doctors are offering weekend hours, so see if yours does. And if you can't see your doctor and your issue can't wait but isn't dire (such as, for example, a wound needing treatment), consider going to an urgent care facility before heading to the emergency room.

ALSO READ: What Is an Emergency Fund and Why Do You Need One?

Obviously, different health insurance plans have different costs. Choosing the right one for yourself isn't simple, either. Look beyond just the deductible and the premium, and think through what kind of healthcare you'll require, and how many visits of various kinds you'll likely need. The insurance plan option that looks like the cheapest one might cost you more than an alternative if you have to pay more overall on drugs and doctor visits.

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Our friends at the Internal Revenue Service let us spend tax-free dollars on approved healthcare expenses in various ways. Health savings accounts (HSAs), for example, are terrific accounts that receive contributions from employees (and often their employers) that can be spent on qualified expenses -- with any funds left over years later being able to be withdrawn in retirement. Flexible savings accounts (FSA) are similar but have a use-it-or-lose-it feature. Read up on them both to see which might work best for you.

ALSO READ: HSA vs. FSA: Key Differences

Not surprisingly, generic versions of various drugs tend to cost a lot less. Ideally, your doctor will be prescribing the least costly version of a drug you need, but that doesn't always happen. Many doctors just prescribe the name-brand version -- sometimes because that's what their patient asked for, not knowing about alternatives. Be sure to ask your doctor if there's a less costly, generic version of the drug you need available. Your local pharmacist may also be helpful here.

This is a clever little trick: If you think you've lucked out, being charged, say, only $10 for every prescription you fill for a drug you need, you might be pleased paying only $120 for 12 30-day refills. You can save even more, though, if your doctor prescribes 90-day batches of your drug. Then you'll only have to refill the prescription four times a year, spending $40 and saving $80. And if you're paying more than $10 per prescription filling, you can save much more.

A bill from your doctor, dentist, or hospital may seem like it should be correct when it arrives. But that's not always the case. Errors are far from uncommon, and you can save a lot by spotting them, questioning them, and having them erased. (Don't be shy asking for an explanation of any confusing or unclear charge.) On top of that, while many people have been whacked financially when receiving surprising bills that were much steeper than expected, there's now a law -- the No Surprises Act. Among other things, it aims to stop consumers from getting unexpected bills from providers that they didn't realize were out of network until you were billed.

ALSO READ: Tips and Tricks for Negotiating With a Hospital Billing Department

Here's another medical expense nightmare: Your insurance company denies a claim, leaving you expected to pay the full cost of something. If this happens to you, don't just pay the bill. Take some time to appeal it. Insurers are required to let you know how to appeal their decision when they deny your claim. There are several ways to appeal, too. You might start with an internal appeal, where the insurer reviews its own decision, and if that doesn't work, you can take your appeal to an external party.

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Even if you employ various strategies to keep your healthcare costs down, it's possible to still face some expenses you just can't handle. When it comes to costly drugs, know that patient assistance programs (PAPs) exist, run by pharmaceutical companies and other entities, to help those who can't afford drugs they need. They're designed to help those with no health insurance and those with insufficient insurance, and they may be able to reduce the cost of drugs or perhaps even get them for free. Don't do without drugs you need without looking into whether a PAP can help you.

When we reach age 65, we can start to be covered under Medicare. That can be a huge, money-saving boon, but for maximum savings, be sure to read up on Medicare and choose the best Medicare plan for yourself. Know that what you may think of as just regular old Medicare is often referred to as original Medicare, and it includes Part A (for hospital coverage) and Part B (featuring physician/medical insurance). Many enrollees also sign up for Part D for prescription drug coverage, which comes in many forms, too. On top of that, you might also choose to add a private Medigap plan to cover expenses that Medicare won't.

But wait -- there's more! Instead of original Medicare, with its Part A and Part B, you can opt for a Medicare Advantage plan, sometimes referred to as Part C. It features insurance plans offered by private insurers that are required to offer as much coverage as original Medicare -- and they typically offer more, too, such as vision and dental coverage.

ALSO READ: What's the Difference Between Original Medicare and Medicare Advantage Plans?

You can save a lot of money by just doing this one thing, once: Sign up for Medicare at the right time, not late. If you sign up late, your Part B premiums, which cover medical services but not hospital services, can rise by 10% for each year that you were eligible for Medicare but didn't enroll. So aim to enroll in the allowed seven-month window, which is anytime within the three months leading up to your 65th birthday, during the month of your birthday, or within the three months that follow. (Note that many people who are already receiving Social Security benefits at age 65 will be automatically enrolled, but don't assume that will happen. Don't risk enrolling late.)

Remember Part D of original Medicare? The part devoted to prescription drug coverage? Well, like many things, it comes in a variety of forms, so look into which Part D plans are available to you, and see which one offers the best savings for the cost. Remember that if you choose a Medicare Advantage Plan, drug coverage of some sort will often be included. Jot down the drugs you take and then compare what they'd cost you with various plans.

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Finally, don't forget long-term care insurance, as it's a separate beast from regular health insurance, but can turn out to be just as vital for many people. Prepare yourself before researching it, because it's costly, but that's just because it's aiming to protect you from having to pay very hefty sums in the future for long-term care. It's not right for everyone -- poorer people can't easily afford it, and richer people can just pay for what they need on their own -- but it might be right for you.

ALSO READ: 5 Ways Long-Term Care Insurance Can Protect Your Assets

Some of these tips are ones you can act on now, such as getting healthier. Some you can act on this year, such as enrolling in the best health insurance plan for yourself, and some you can act on as you approach and enter retirement. Don't put off the ones you can act on now or soon. Read up, learn more, and make smart decisions that can put you in a position to receive good healthcare while spending as little as possible.

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