Your browser is out of date.

Making the right decisions to reduce your healthcare costs

Individuals 10.28.2020 3 MIN READ


In 2018, U.S. healthcare spending increased to over $11,000 per person and is projected to continue rising.1 For many, this isn’t a manageable expense that can be built into their budget—it’s a substantial financial burden that requires careful planning. Here are some steps you can take to manage your healthcare costs.

  • Utilize health savings accounts (HSAs) and/or flexible spending accounts (FSAs). Funding these accounts through payroll deductions provides an automated, tax-advantaged way to save for medical expenses. Remember: Dependent-care accounts can also help with eligible child and adult care expenses.
  • Consider building up 3–6 months of living expenses in an emergency fund. An emergency fund can provide peace of mind, but becomes especially important if you or other wage earners in your home are unable to work due to a medical emergency.
    • In the event your emergency fund is not fully funded or the cost of your emergency exceeds the amount in savings, talk to Ayco about other sources of funding you can explore.
  • Evaluate how your annual enrollment elections may change your take-home income and adjust your cash flow if necessary. Let’s say you anticipate having improved cash flow after switching from a plan with higher monthly premiums to a high-deductible plan with low premiums. It may be a good idea to contribute this newfound surplus to savings—like your emergency fund or health savings account—or paying off debt with high interest rates.
  • Check your providers’ status under your insurance. Receiving care from in-network providers typically results in lower medical expenses than choosing out-of-network providers. If you have out-of-network providers, you may want to consider changing to new, in-network providers or selecting a coverage plan that allows out-of-network visits.
  • Consider substituting virtual consultations for in-office visits where possible. If offered under your plan, virtual video consultations with a doctor may result in lower medical costs and can save you time.
  • Evaluate your medical plan options based on what the total annual cost of each would be, not just premium costs. In other words, what would be the estimated annual cost of each plan when factoring in: premiums, out-of-pocket expenses (e.g., deductibles, copays and coinsurance) and HSA company contributions, if applicable.
  • Consider the type of prescriptions you are purchasing and the frequency of the supply. Ask your doctor if generic or preferred brand name formulary2 drugs are available. These are generally less expensive than non-preferred drugs (i.e., brand name drugs that are not on the formulary list). Getting prescriptions via mail order through a 90-day supply vs. 30-day supply will typically also result in cost savings.
  • Are there any incentives offered through your employer that may be available to help lower the cost of your premiums if you accomplish certain tasks? If so, you may want to participate in order to reap the benefits of lower premium costs.
  • Be on the lookout for helpful tools that assist in calculating the most cost efficient medical plan or offer an opinion on the best doctor or treatments for your needs. Common examples include: Ask EMMA or ALEX.


If you have Ayco as a company benefit, register or log in to learn more about this and other financial wellness topics. If you’re not sure whether your company offers Ayco Financial Counseling, contact your human resources representative.



1Centers for Medicare and Medicaid Services

2A formulary is a list of prescription drugs that have been approved for reimbursement under an insurance plan.


For disclosures relating to this article, please click here.