A Guide to Reducing Out-of-Pocket Medical Expenses

Even with health insurance, out-of-pocket medical costs like deductibles, copays and coinsurance can really add up. A major injury or health issue could mean thousands of dollars in bills. Many American families struggle with these burdensome expenses every year. But there are ways to help reduce the financial strain.

Shop Smart for Health Coverage

Your first line of defense is selecting an affordable, comprehensive health insurance plan. During open enrollment, scrutinize all available options to find the best value given your typical health care utilization and budget.

Plans with higher monthly premiums generally have lower deductibles and out-of-pocket limits. Conversely, low-premium plans tend to have higher cost-sharing requirements when you need care. For people with significant health issues, a higher premium plan could mean substantial overall savings.

Use In-Network Providers

One of the easiest ways to minimize costs is to see doctors, hospitals, and other medical providers within your health plan’s network. Out-of-network care often means higher deductibles, copays and coinsurance that add up rapidly.

Staying in-network also helps you avoid surprise medical bills from out-of-network providers you did not choose, like assistant surgeons, anesthesiologists or labs used during a hospital stay.

Review Medical Bills and Claims

Unfortunately, errors and overcharging in medical billing occur frequently. The experts at recommend diligently reviewing all medical bills and insurance claims (called Explanations of Benefits or EOBs) to verify:

  • Charges accurately reflect services received.
  • Proper insurance coverage was applied.
  • No duplicate charges or fees outside your care.
  • Negotiated insurance rates were applied correctly.

If you spot any discrepancies or have billing questions, call the provider and your insurance company to dispute the charges.

Explore Alternative Treatment Options 

Many plans cover alternative care options like telehealth visits, nurse advice lines, walk-in clinics, and urgent care facilities. Using these more affordable resources when appropriate reduces out-of-pocket spending compared to emergency room or specialist visits.

Your health insurance may also offer discounted programs for things like fitness, weight loss, smoking cessation or managing chronic conditions. Taking advantage of included preventive benefits maximizes your coverage.

Tap Into Tax-Advantaged Accounts

Various tax-advantaged accounts allow you to pay eligible out-of-pocket medical expenses with pre-tax dollars. Common examples include:

  • Flexible Spending Accounts (FSAs) – You can contribute pre-tax funds, then use the FSA to reimburse yourself tax-free for qualified medical costs.
  • Health Savings Accounts (HSAs) – Available for those with high-deductible health plans, HSAs allow tax-free contributions, earnings growth, and withdrawals for qualified expenses. 
  • Health Reimbursement Arrangements (HRAs) – Employer funded accounts that reimburse employees tax free for eligible medical costs.

For most people, these accounts provide substantial tax savings on out-of-pocket healthcare spending. Just be mindful of rules and annual contribution limits.

Seek Financial Assistance

Hospitals, clinics, drug companies and community organizations often offer financial assistance programs for those unable to afford care or medications. You typically must apply and meet certain income criteria, but taking advantage of these resources helps immensely.

Many providers are also willing to set up interest-free payment plans for larger medical bills paid in affordable installments. It never hurts to ask about options if you are in a financial bind.

Compare Prices for Tests/Procedures

Finally, remember that medical costs can vary significantly between providers, even within the same network. For non-urgent procedures, do your homework to find reputable, cost-effective options.


With healthcare costs continuing to rise, being a smart, proactive patient consumer is crucial for minimizing expenses. Following strategies like carefully evaluating health plans, utilizing in-network care, reviewing bills for accuracy, using tax-advantaged accounts, and exploring financial assistance will help limit out-of-pocket spending while still getting quality care. A bit of effort goes a long way to protecting your finances.

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