Consider an HSA. Health savings accounts (HSA) are medical savings accounts available to people enrolled in high-deductible health insurance plans—at least $1,200 for individuals and $2,400 for families. They may be used to pay for qualified medical expenses, and any money left in the account at the end of the year can be used in the next year. These plans offer a variety of tax benefits, Schrage says, “including the fact that funds contributed are not subject to federal income tax, and the account has the ability to bear interest.” Ankeny Minoux, president of the Foundation for
Health Coverage Education, recommends starting the HSA with the same amount as your insurance plan’s deductible. As the account grows, you can raise your deductible to reduce monthly premiums. Though HSAs may not be a viable option for people with chronic conditions, they’re a great cost-saving option for healthy individuals. “When people are able to sign up for an HSA or high- deductible plan, it’s a great way to maximize their monthly dollars,” Minoux says. “If you’re healthy, it’s a great way to save, and the fund can just keep growing and growing.”
Set Up an FSA. Flexible Savings Accounts (FSAs) are a great way to save on health-related expenses. These tax-free accounts can save you 25-40 percent on eligible out-of-pocket medical expenses such as prescription drug costs, prescribed over-the-counter medicine, medical, dental, and vision and hearing expenses (for you and/or other dependents). When you incur a health care expense, such as a $20
doctor visit co-pay or prescription eyeglasses, you simply submit a claim as instructed by your FSA administrator for reimbursement.
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FSAs are worthwhile because the contributions
made to your account are first deducted from your paycheck before they are taxed. This decreases the amount of taxes you pay from each check and can potentially increase your take-home pay. There is a downside to FSAs: Any money you haven’t used by the end of the year is forfeited and cannot be refunded. When signing up for this benefit, consider the expenses that you will incur in the upcoming year and contribute only what you know you can use.
Go with Generic. Whenever possible, ask your doctor to prescribe generic drugs over brand-name ones. According to Consumer Reports, the cost of most brand-name drugs is about three times higher than the generic version. Generics are usually equally effective and are safe, says Nancy Davis, RPh, pharmacy manager for Walgreen’s in Glencoe, IL. “Each (generic) drug has to go through the same
testing as the brand,” Davis says. “They have to be absorbed at the same rate, and they have to stay in the body for the same amount of time so that when you switch from one manufacturer to another, you’re going to get the same results.” Everyone’s body responds differently to
medication, however. If the brand-name version of the drug works best for you, go with it and find other areas where you can cut costs. “You don’t want to be penny-wise and pound-
foolish,” Davis says. “If it’s the right fit and you’re not having side effects, it might be more beneficial to get the more expensive brand product.”
Luciano Lozano/Flickr/Getty Images
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