How to save money on high medical bills

If your out-of-pocket costs hit the Medicare maximum each year, you may have an opportunity to save money. Coinsurance costs can be prohibitive if you:

  • are taking expensive drugs
  • need frequent infusions
  • Requires repeated expensive treatments

However, your high health care bills are the key to both savings opportunities.

  1. You may be able to save on out-of-pocket costs, such as copays, coinsurance, and deductibles.
  2. You may be able to save on health insurance premiums.

But the savings tips we’ll discuss here if only Work for someone who wants to reach the plan’s out-of-pocket maximum each year. If you typically don’t meet your plan’s out-of-pocket maximum, you’ll want to consider other strategies to maximize your health insurance benefits.

Choose a plan with a lower out-of-pocket limit

After you reach the annual out-of-pocket maximum, the health insurer will pay you 100% of your covered in-network costs for the rest of the year (note, this does not apply to Original Medicare with no out-of-pocket costs) Maximum Pocket; This refers to a private primary health care plan).

After you hit the out-of-pocket maximum, the only costs you continue to pay are your monthly health insurance premium, and the cost of any services your plan doesn’t cover at all (such as adult dental care or non-restorative cosmetic surgery).

So, depending on the difference in premiums, you may save money if you choose a lower out-of-pocket maximum than the health plan you currently pay for. In many cases, you’ll find that lower out-of-pocket limits offset higher premiums.

In 2022, ACA-eligible plans (that is, all major medical plans, ie, not grandmothers or grandfathers) will have a cap of $8,700 in out-of-pocket expenses. However, there are also many plans in the employer-sponsored and personal/family markets with out-of-pocket maximums that are well below the cap.

How to find a plan with lower out-of-pocket costs

Look for a plan with relatively high deductibles and coinsurance, but a low overall out-of-pocket limit. Since most people never reach the out-of-pocket maximum, the higher the deductible and coinsurance, the less a company will pay for health care services for its typical member. This enables them to charge lower premiums.

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Higher deductibles and coinsurance won’t add to your annual cost since you know you’ll pay your full out-of-pocket costs during the year.In fact, due to the plan you choose Lower total out-of-pocket maximum, your annual charges will be lower than those in plans with higher out-of-pocket maximums—regardless of the deductible. (We’ll discuss premiums in the next section, but it’s important to pay attention to your total costs, including premiums and out-of-pocket medical expenses. If you’re facing a lower out-of-pocket limit, this will not benefit the premium increase enough to offset the savings cost.)

But when you know you’re going to have high medical bills, the most important number in terms of plan design is the maximum out-of-pocket cost, because you know you’re going to hit that limit one way or the other. It doesn’t matter whether you get there with a deductible or a deductible plus coinsurance and/or copayments, so plan designs that go over the out-of-pocket limit when you’re facing a huge claim bill over the course of the year don’t So important.

However, higher deductibles and coinsurance do when You pay your out-of-pocket costs, which transfer to the beginning of the plan year. You’ll hit the out-of-pocket maximum earlier this year, which is easier to reach because it’s lower. But since your deductible is higher, your out-of-pocket costs will be paid early at the beginning of the year (i.e. you will pay yourself at the beginning of the year while meeting your deductible, and then your insurance company will pay later in the year when you pay your fees, after you reach your deductible, then your out-of-pocket maximum).

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Choose a plan with the same maximum out-of-pocket cost but a lower premium

Another way to save is to buy a health insurance plan with the same out-of-pocket limit as your current plan — or maybe even a lower out-of-pocket limit — but with a lower monthly premium. While you still have similar out-of-pocket health care costs each year, you’ll save on premium costs each month.

Again, look at plans with higher deductibles and coinsurance than your current plan. While you’ll need to have funds available to pay for new expenses in the first few months of the year, there’s still some wiggle room in your budget as you’ll pay less monthly premiums.

buyer beware

If you have a medical condition that requires extensive care on an ongoing basis, be sure to pay attention to the details of the plan you’re considering (aside from premiums and cost-sharing). You’ll need to make sure the new plan has a provider network that includes your health care provider, or you can switch to a medical professional in the plan’s network.

Remember, each plan covers different prescription drugs. A plan’s list of covered drugs is called a formulary, and formularies vary from one plan to another. If you inadvertently join a plan that doesn’t have your drug in its formulary, you will have to change the drug or treatment or pay the full cost out of pocket.Because your medical bills are too high Critical You thoroughly investigate the benefit coverage of your new health plan before switching.

Affordable Care Act helps reduce costs

The Affordable Care Act also established a cost-sharing subsidy to help lower out-of-pocket expenses for eligible middle-income individuals (up to 250% of the poverty line; for 2022 coverage, this is the equivalent of $32,200 for an individual continental United States).

This subsidy applies to people who buy their own health insurance through the exchange, as long as they choose the Silver plan. If your income makes you eligible for this subsidy, before you choose a health plan, you should understand how it will lower your out-of-pocket maximum and make your benefits more robust. If you qualify for the cost-sharing subsidy and you opt for the Bronze plan, you could end up leaving a lot of money on the table. With the Bronze plan, your monthly premium will be lower, but you will miss out on the cost-sharing subsidy, so you may end up incurring higher out-of-pocket costs.

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Before switching plans

Make sure you have enough money early in the plan year to cover potentially higher initial costs, like deductibles and coinsurance, before you hit your new out-of-pocket limit and start saving. Consider a Flexible Spending Account if your employer offers a Flexible Spending Account or a Health Savings Account if you are enrolled in an HSA-eligible health plan.

If sticking with your current healthcare provider is important to you, make sure he or she is in network with the health plan you are considering.


It’s not uncommon for a person to hit their Medicare out-of-pocket limit each year. But for those who do — or for those who anticipate high one-time medical bills in the coming year — there are strategies to reduce overall health care spending. For example, it can sometimes be beneficial to choose a plan with a higher deductible but lower out-of-pocket costs, especially if the plan has a lower monthly premium.

VigorTip words

If you hit your health plan’s out-of-pocket expense limit each year, or if you expect your medical bills to be high in the coming year, you may have some ways to reduce your overall spending. If you have access to an HSA or FSA, you will need to include premium costs and out-of-pocket costs, and take into account any potential tax savings.