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10 ways to slash your health care spending

Key takeaways

  • Adopting a healthy lifestyle and embracing preventive care may help to keep medical expenses at bay.
  • HSAs and FSAs let you use pre-tax money to pay for a wide array of qualified medical expenses.
  • Make the most of every health care perk that your employer offers.
  • Review your medical bills for errors. Call your provider if anything is unclear or inaccurate.

From paying for prescriptions to covering co-pays, medical expenses can take an oversized bite out of your budget. If you’re among those feeling stressed about these outlays, you’re far from alone. Nearly 4 in 10 people said they or a family member put off medical care in 2022 because of the cost.1 That’s the highest number on record since Gallup first asked that question in 2021.

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Health care costs are only expected to rise in years to come. Your best remedy: Reduce spending now while also preparing for future costs. Here’s how to do that.

1. Be proactive about preventive care. From immunizations and annual physicals to dental cleanings and cancer screenings, preventive care often comes at low or no cost. These services can unearth issues before they become a problem and help you to stay healthy, reducing medical expenses in the long run. “Take advantage of all the preventive care that comes with your plan,” advises Benjamin Isgur, Fidelity Investments’ vice president of health care thought leadership. “Don’t leave anything on the table.”

2. Do some homework on your health plan options. Researching health plans isn’t a scintillating experience for most people. But to make the most of your money, it’s important to understand each plan’s premium, in-network providers, deductibles, prescription coverage, and yearly out-of-pocket maximum. Keep in mind that you may need to make some tradeoffs. For example, higher premiums can come with lower deductibles while lower premiums can come with higher deductibles. Most health care organizations will provide online support tools to help you make the right decision for you.

As you review your options, consider your historical health care usage. “Obviously, the past is not always a predictor of the future,” says Isgur. “But looking at your use of prescription drugs, doctors, and hospitals can provide some breadcrumbs along the path to understand which might be the better health coverage choice for you and your family.”

Learn how to make the most of your annual benefits enrollment, read Fidelity's Annual Enrollment Guidebook.

3. Whenever possible, stay in-network. It’s most cost-effective to have health care coverage where your preferred providers are part of that plan’s network. If you go outside the network, you’ll likely pay a considerably higher out-of-pocket price. Before making appointments with new providers, confirm that they are in-network. This is especially important if you have a chronic condition and may be referred to specialists, says Isgur. “You might have 5, 10, or even 20 years of going to that doctor,” he says. If they’re out-of-network, those costs will quickly add up.

4. Consider an HSA: If you’re enrolled in an HSA-eligible health plan, you may be able to contribute pre-tax dollars to a health savings account (HSA). That money can be used for dozens of qualified medical expenses that range from acupuncture to X-rays. One big advantage of an HSA is that there isn’t a time limit on when you must spend the cash, says James O’Keefe, vice president of the retail HSA group at Fidelity Investments. You can pay for current expenses or use the money as a cushion for future needs, such as covering the sky-high medical costs that can arise during retirement. In addition, you can be reimbursed for qualified medical expenses that occurred weeks, months, years, and even decades past if you keep those receipts.

Potential HSA benefits:

  • Funds roll over from year to year
  • You get to keep unused savings in the account
  • If your health plan and HSA is through your employer, the money will stay with you even if you switch jobs

Another big benefit is that an HSA is “triple-tax advantaged,” says O’Keefe. “The HSA is the only account with this feature. Your initial contributions are untaxed, your investment grows tax-free, and the withdrawals are tax-free if spent on qualified medical expenses.2 HSAs are a great way for someone to save for both near-term and long-term health care needs.”

For 2023, the IRS contribution limits for HSAs are $3,850 for individual coverage and $7,750 for family coverage.

If you're 55 or older during the tax year, you may be able to make a catch-up contribution, up to $1,000 per year. Your spouse, if age 55 or older, could also make a catch-up contribution, but will need to open their own HSA.

In 2024, the limit on individual coverage contributions will increase to $4,150. For family coverage, it will go up to $8,300. The $1,000 catch up amount will stay the same.

Read Viewpoints on 3 healthy habits for health savings accounts

5. Capitalize on a health care FSA: A flexible spending account (FSA) allows you to set aside pre-tax money to pay for qualified medical expenses, helping you to save an amount equal to the taxes you would have paid. Like an HSA, FSA dollars can be used for a wide array of purchases, including prescriptions, co-pays, sunscreen, and heating pads. In 2023, eligible employees are each allowed to set aside up to $3,050 to cover qualified expenses.

FSAs come with nuances, however. While some plans give you a grace period of extra time to spend the money or allow you to carryover up to $610 in 2023, many are considered “use it or lose it.” That means you must spend the money within the plan year, or it’s forfeited.

Typically, you can’t save in an FSA and an HSA in the same year. But if you have an HSA-eligible health plan, your employer may offer a limited expense health care FSA, which lets you put aside pre-tax money for eligible dental and vision expenses.

6. Make the most of all employer benefits. In many cases, employers provide health-related perks that go far beyond expected care. For instance, you may be eligible for nutritional coaching, gym membership reimbursement, or free mental health services. “Everyone should take a second look at all the benefits available to them. There's potentially a lot to take advantage of,” says Isgur. “There are many different health-related benefits that sometimes have a low utilization because people don't know about them.”

7. Deploy simple strategies to save on prescriptions. There are multiple ways to save on your medications, including using lower-cost generics. Not all drugs have a generic counterpart, but when available, a generic can come at a fraction of the cost of a brand name drug. Keep in mind that you can’t make this switch without your doctor’s okay, as generic medications are not always suitable for all people, says Aditi Sharma, a vice president in Fidelity’s Financial Solutions. Also, the pharmacy closest to your home may not be the cheapest place to fill your prescription. Instead, use your plan’s preferred pharmacy, or for ongoing prescriptions, order a 90-day supply of your medication through a mail-order pharmacy. The mail-order prescription will be delivered directly to your home and typically comes at a reduced cost compared with a 30-day supply, says Sharma.

Read Viewpoints on How to save money on prescription drugs

8. Review your statements for errors. Just over 4 in 10 adults — 43% — say they have received a medical or dental bill they thought contained a mistake.3 Among the errors cited: being billed for something that should have been covered by their health plan, billed for services not received, and billed again after payment was made. “Check your statements before paying them,” Sharma says. “There are times when it can be wrong.” If you spot something that seems incorrect or unclear, call your provider’s billing department and ask the representative to review the information.

9. Handle health issues when they arise. Addressing medical concerns can be time-consuming and potentially nerve-wracking. So, it can be natural to ignore a problem and simply hope it goes away. “You are human, you have fears, you have other priorities,” acknowledges Sharma. “But consider the consequences. If you go to the doctor 5 years down the line instead of now, things can get worse, and the treatment can be much more expensive. The sooner you face it, the better off you are.”

10. Adopt a healthy lifestyle. Exercising, eating nutritiously, getting high-quality sleep, and reducing stress can help to keep health concerns at bay, leading to lower costs in the long run. “If you invest in your health now, that will pay dividends,” Sharma says. In addition to potentially reducing medical expenses, you’ll likely have more energy to dedicate to those you care about most, such as your family. “You can only fully give to others if you are good to yourself,” says Sharma.

Consider a health savings account (HSA)

With an HSA, you can pay for qualified medical expenses in a tax-advantaged way.

This information is intended to be educational and is not tailored to the investment needs of any specific investor.

1. Megan Brenan, "Record high in U.S. put off medical care due to cost in 2022," 01/17/2023,, 2. With respect to federal taxation only. Contributions, investment earnings, and distributions may or may not be subject to state taxation. Please consult with your tax advisor regarding your specific situation. 3. Karen Pollitz, Kaye Pestaina, "Could consumer assistance be helpful to people facing medical debt?" 07/14/2022,, Kaiser Family Foundation,

Views expressed are as of the date indicated, based on the information available at that time, and may change based on market or other conditions. Unless otherwise noted, the opinions provided are those of the speaker or author and not necessarily those of Fidelity Investments or its affiliates. Fidelity does not assume any duty to update any of the information.

The information provided here is general in nature. It is not intended, nor should it be construed, as legal or tax advice. Because the administration of an HSA is a taxpayer responsibility, customers should be strongly encouraged to consult their tax advisor before opening an HSA. Customers are also encouraged to review information available from the Internal Revenue Service (IRS) for taxpayers, which can be found on the IRS Web site at They can find IRS Publication 969, Health Savings Accounts and Other Tax-Favored Health Plans, and IRS Publication 502, Medical and Dental Expenses (including the Health Coverage Tax Credit),online, or you can call the IRS to request a copy of each at 800.829.3676.

Fidelity does not provide legal or tax advice. The information herein is general in nature and should not be considered legal or tax advice. Consult an attorney or tax professional regarding your specific situation.

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