The Milliman Medical Index estimates that a hypothetical family of four will spend just over $35,000 per year in healthcare-related expenses. That is a significant amount of money for the majority of families in America.
The good news is that there are several ways to reduce that cost burden with a few simple ideas:
Pick The Right Medical Plan For Your Needs
Health insurance plans can vary widely, in terms of deductibles, out-of-pocket maximums, copays, premiums, and more. It’s important to pick the right medical plan for your needs. Make a rough plan of what your anticipated healthcare needs are for the year ahead, and pick a plan that caters to those.
If your partner is offered medical coverage through their employer, be sure to compare plans. Sometimes it’s more cost-effective for each of you to be covered by your own employers, based on subsidies that employers offer for “you only” coverage. If covering dependents, check coverage tiers for “you + dependents” on both of your employer plans to pick the plan that is most cost-effective with the best coverage.
Finally, be sure to check your employer plans against those offered through the Affordable Care Act (ACA marketplace plans). More than likely, it’s practical to remain on your employer’s plan rather than get your own insurance, but it’s always worth comparing.
Regardless of whether your health status has changed, it’s important to check your needs annually and ensure the coverage you have is still the best.
Get Preventive Care Early
Most employer and ACA plans cover preventive services—like vaccinations, annual physicals, blood pressure checks, and routine screenings—at no cost to you, even if you haven’t met your deductible.
Plan ahead and get these services done early in the year. Doing so allows you to handle any follow-up medical procedures done in the same year, moving you closer to reaching your out-of-pocket maximum (after which all services for the year are covered at 100%).
Use a Tax-Advantaged Savings Account Strategically
A Health Savings Account (HSA) and a Flexible Spending Account (FSA) are two great ways to reduce your taxable income, as well as save for future medical expenses.
An HSA is an account built for those with a high deductible health plan (HDHP). A medical plan is considered a high deductible health plan if it has a deductible over $1,650 for self-only coverage and $3,300 for family coverage. If your plan qualifies, you can put away money pre-tax in an HSA. The maximum amount you can put away in an HSA in 2025 is $4,300 for individuals and $8,550 for families.
Unique aspects of an HSA include the ability to invest the money in the stock market, making it an additional vehicle to invest for the future (once you hit a specific threshold). Additionally, you can use your HSA to pay for eligible medical, dental, vision, and prescription costs tax-free. And if you leave your employer, the funds stay with you. You don’t need to have an employer-sponsored plan, as you can open an HSA on your own, making it completely under your control regardless of moving employers.
A Flexible Spending Account (FSA) is another pre-tax account where money from your paycheck is set aside for health expenses throughout the year. However, be sure to spend the funds before the end of the year, as it is “use it or lose it”. In 2025, the limit on this account is $3,200. This type of account is only offered for employer-sponsored plans.
