how to save on healthcare expenses

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills
Post Reply
Posts: 63
Joined: Sat Dec 31, 2011 5:04 pm

how to save on healthcare expenses

Post by lovenox11 » Sun Nov 25, 2012 9:31 pm

I'm in my 20s and started working for a company. My health plan deductible is $260/mo (for family) and gets deducted pre-tax from paycheck. Then I have to pay 10% of all visits/hospital stays. I have a $2k deductible.
I'm trying to figure out how I can save money on the copays I'm paying out (including dental expenses, glasses, and co-pays) about $300-400/yr.

[1] What is the tax advantage of putting money into an FSA or HSA?
-I thought I can deduct medical expenses no matter what. Am I saving money on taxes twice?

[2] Do I open a FSA? Put money into it that I expect to save and then submit for deductions?
-one negative is any unused money is lost at end of year

[3] Do I open a HSA?
-here I won't loose money at end of year and can use the left over for next yr expenses.

[4] What If I put in $300, then during the year submit for $300 in health-related expenses. Do I still get to deduct $300 from my taxes at end of year?

Or am I thinking of this wrong?

Posts: 60951
Joined: Thu Mar 01, 2007 8:00 pm

Re: how to save on healthcare expenses

Post by livesoft » Sun Nov 25, 2012 9:40 pm

Your post is confusing to me and perhaps others.

You pay health insurance premiums from somewhere and then you pay for health care co-pays, drugs, out of pocket. The stuff out-of-pocket usually, but not always counts toward your deductible. The out-of-pocket stuff is not deductible on your taxes except for special circumstances.

An FSA would save you taxes because it would come out of your paycheck pre-tax. You would not get to double-dip on taxes.

An HSA could save you taxes, but you would have a different health care plan to go with it and your premiums would change.
Wiki This signature message sponsored by sscritic: Learn to fish.

Posts: 60951
Joined: Thu Mar 01, 2007 8:00 pm

Re: how to save on healthcare expenses

Post by livesoft » Sun Nov 25, 2012 9:49 pm

Here is how we save on health care expenses:

1. Stay healthy and have no expenses.

2. Try to have ALL dollars spent on health care expenses come out of paycheck pre-tax including pre-FICA tax or have employer or insurance pay for them. That means figure out ahead of time how much one will spend on glasses, contacts, dental expenses, co-pays that insurance does not cover and have that amount of money deposited into an FSA by your employer annually. Then really use the FSA to pay for these things. Your employer has to offer an FSA.

3. An HSA is a bit different from an FSA in that it must be accompanied by a high deductible health plan or HDHP. I have found the HSA/HDHP combo advantageous only when your health care expenses are moderate and you don't have to spend any time in the hospital. Since no one plans to go to the hospital, it is a roll of the dice, but one you may wish to take.

Perhaps a book like Jane Bryant Quinn's "Making the Most of Your Money" should be a Christmas gift to yourself as a young adult starting out in the world of paying your own way. It will explain insurance, loans, taxes, etc.
Wiki This signature message sponsored by sscritic: Learn to fish.

User avatar
Posts: 217
Joined: Wed May 04, 2011 12:31 pm

Re: how to save on healthcare expenses

Post by dianna » Sun Nov 25, 2012 10:15 pm

When you or someone covered by your plan do need to go to the healthcare provider's office, ask questions about their fee schedule... do they offer a discounted rate if you pay cash/check/credit card at time of service and choose not to submit to insurance? Sometimes that is a more affordable option depending on where you are at with meeting your deductible and what your coverage allows.

Bob's not my name
Posts: 7405
Joined: Sun Nov 15, 2009 9:24 am

Re: how to save on healthcare expenses

Post by Bob's not my name » Mon Nov 26, 2012 6:19 am

Read this on why you should use an FSA and why you shouldn't be conservative about it: ... 0&t=101267

Medical expenses paid with after-tax dollars are deductible only to the extent they exceed 10% of your AGI (for tax years prior to 2013 it was 7.5% for taxpayers with incomes below the AMT; the ACA made it 10% for everybody under 65, even lower income families). So if your AGI is $100,000, your medical expenses are deductible only to the extent they exceed $10,000.

Posts: 161
Joined: Tue Jan 08, 2008 5:58 pm

Re: how to save on healthcare expenses

Post by rogermexico » Mon Nov 26, 2012 2:23 pm

1. Without FSA/HSA you can only deduct medical expenses if they exceed 10% of income and if you itemize, whereas FSA/HAS always come out pre-tax (as already answered)
2. I stopped using FSA because of the accounting annoyances.. making sure everything was spent at year-end and also possibility of unnecessary expenses incurred.
3. Whether HSA is worth it very much depends on your employer’s specific plans. For me it was a good idea because the downside in a high expense year was not very bad compared with the upside (insurance premium savings)
4. The funds are taken out by employer so it definitely reduces your taxable income at year-end.
My current favorite saving tip is online ordering of eyeglasses (from Zennioptical) as well as contacts (from Canadian vendor if your prescription is expired) … it’s a pretty minor risk for someone with simple and stable prescriptions and also saves me time.

User avatar
Posts: 16284
Joined: Mon Feb 26, 2007 2:21 pm
Location: Washington DC area

Re: how to save on healthcare expenses

Post by dm200 » Mon Nov 26, 2012 4:47 pm

Some tests and physician visits under both Medicare and under many/most/all other health plans (because of Healthcare reform) are covered at no charge. Details vary and, I am sure, will change one way or another in coming years. Try to bunch issues in one of these visits to your doctor(s). In general, "bunching" conditions, questions,etc. also saves money. Often, lab tests ordered with an annual health assessment may not have fees.

Stay healthy.

Ask and understand what every medication you take or are prescribed does (or is supposed to do). Investigate lower cost alternatives (such as generics). As an example, I was taking a prescription that my previous primary care physician said was "good for such and such". When I read the details of that medication, I concluded that was just not true. So, by email, I asked my current physician if I could just stop it and see what happened. He said OK; I stopped it and there are no changes in either direction.

My current (medicare advantage) HMO has centralized patient records, so all physicians have access to all test results, etc. That means fewer duplicate tests from various physicians. About half of things/issues in the past that I would have needed to see a physician in person for, now I can handle by email consultation (and there is no charge) - save time, money and hassle. There is even the capability to attach pictures to the email. I actually tried that with a dermatology issue, but the picture my cell phone took (or my skill) was not good enough to be diagnosed. When you go to a specialist, try to take or be able to send any test results, reports, Xrays, etc that were already done so they are not repeated (and you have to pay for them!)

Read the policy, charge schedule, rules and exclusions. Make sure you pay only what the health insurance policy calls for.

User avatar
Posts: 6673
Joined: Sun Apr 01, 2007 1:10 pm
Location: Seattle

Re: how to save on healthcare expenses

Post by baw703916 » Mon Nov 26, 2012 10:44 pm

livesoft wrote:Here is how we save on health care expenses:

1. Stay healthy and have no expenses.
Why didn't I think of that??! :oops:
Most of my posts assume no behavioral errors.

Post Reply