Health savings accounts (HSAs) are a great tool to manage your out-of-pocket health care expenses. Follow these five strategies below to make sure you get the most out of your HSA account.
Contribute as much as you can.
HSAs are designed to offer three different tax benefits — you put your money in tax-free, it gains interest tax-free and you can withdraw it tax-free for qualified medical expenses. In addition, many employers will contribute to an employee’s health savings account and if there is a match available, not taking advantage of it can mean leaving money on the table. To boost your savings for future medical expenses, contribute as much as you can up to the HSA combined employer and employee contribution limit. In 2021, the individual limit is $3,600 while the family limit is $7,200. The limits will increase in 2022 to $3,650 and $7,300, respectively.
Use over-the-counter (OTC) drugs if possible.
Some medications that were once only available by prescription can now be found on store shelves. Choosing a generic drug over a brand name over-the-counter drug can also help generate greater cost savings. Asking for the pharmacist on duty can help you navigate these possibilities for you while giving you confidence these changes will not negatively impact your health or alter your doctor’s intentions.
Only visit the emergency room if it’s an emergency, and understand your health insurance network.
Remember that your doctor’s office and the urgent care center are more appropriate places to treat conditions that are not life-threatening—and they are a lot more cost-effective. When seeking care, it is also important to know what physicians are in your health insurance plan’s network, since out-of-network care will typically result in higher out-of-pocket costs.
However, if your condition is life-threatening, do not hesitate to go to the emergency room. Some conditions you should seek emergency services for include chest pain, uncontrollable bleeding or severe abdominal pain following an injury.
Beware of possible medical billing errors.
Medical billing errors can cost patients thousands of dollars. Before paying a bill, review your statement for accuracy. If you are wondering about a claim, ask for an itemized statement so that you can see a breakdown of the services you are being charged for and can verify that you received them. Taking the time to review your charges can save money and avoid paying for a clerical error.
Commit to your health!
Regular exercise, a healthy diet and abstaining from tobacco can help you avoid health issues in the first place. Be sure to use preventive services such as annual physicals that are covered without any cost-sharing by your health insurance plan.
Understanding your health insurance plan and benefits is just one of the many complex responsibilities in life. Want more step-by-step guidance as you navigate adulthood? Download and share our FREE Guide: Adulting is Hard!