Do you have a high-deductible health insurance plan that requires you to pay off your annual deductible before medical coverage takes place? Are you aware that you can use Health Savings Account funds to pay for qualified medical expenses? And, you can deduct HSA contributions from your taxable income. That could help you save on taxes to offset your health care costs. Besides taking advantage of HSA-qualified health plans, here are other ways to save on health care.
Take advantage of preventive care
New insurance plans, including HSA-qualified plans, include coverage for recommended preventive care such as mammograms and wellness visits with no out-of-pocket costs. You can get a free check-up every year.
Consider low-cost alternatives
Since you have to pay for some of your health care until the plan’s deductible is met, you should carefully discern which health care services are medically necessary. If you sustained minor injuries, some plans offer 24-hour health care hotlines that you can call to get advice before rushing to the hospital. Getting emergency medical care can cost thousands of dollars. If your local drugstore offers free advice for treating minor injuries or health problems, you can take advantage of them, too. And, you can always ask your doctor to first consider low-cost generic drug alternatives, or ask if you can buy a higher dose drug and split the pill to save on your prescription costs.
Make sure HSA withdrawals are for qualified health care
If you use your HSA dollars to pay for unqualified expenses such as non-prescription drugs and health insurance premiums, you will be charged a 20-percent penalty. If you want to avoid increasing your out-of-pocket costs, check the HSA qualified expenses list. It would be best to keep all the qualified medical expenses receipts that you have for the past seven years to increase your protection from the IRS.
Pay for inexpensive items out of pocket
Since the money that piles up in an HSA rolls over from year to year and can earn tax-free interest, you may want to pay for little expenses, like $4 for a generic drug, if your budget can handle it. Leave money in your HSA to grow with tax-free earnings.
Wiley Long is President of HSA for America, and a passionate advocate for consumer-based solutions that will improve price transparency and lower health insurance and medical costs for people purchasing individual and family health insurance plans.