5 Ways to Reduce Medical Spending During Periods of Inflation

The price of consumer goods is on the rise — and the cost of healthcare is too. Here are smart strategies to protect your wallet.

Man getting a blood pressure test

It’s no secret that the cost of practically everything has been on the rise, from groceries to gasoline. In May 2022, the U.S. Bureau of Labor Statistics reported that inflation has caused an overall 8.3% increase in the price of consumer goods compared with 12 months earlier.

And medical care costs are on the rise too. According to the Centers for Medicare & Medicaid Services (CMS), in 2020 healthcare spending grew 9.7%, bringing the average yearly cost of healthcare to $12,530 per person. And according to a 2022 HealthView Services report, a healthy 55-year-old couple today could see their additional healthcare expenses in retirement grow by more than $160,000 over previous projections, for a total expected lifetime retirement cost of nearly $1.1 million.

On top of that: In 2021, CMS also announced that Medicare Part B premiums would jump by 14.5% for 2022.

The bottom line: It’s more crucial than ever to save money on your medical expenses. Here are five things you can do to get started.

1. Be proactive about preventive care

“This is the single best thing you can do for your wallet and your health,” says Noor Ali, M.D., a health insurance adviser based in Tampa, Florida. “Being proactive about getting your annual physical will help catch chronic illnesses before they start and/or help treat major illnesses before they progress to more serious health issues, which can turn out to be very costly to treat and manage.”

2. Increase contributions to your tax-free health accounts

Contributing to a tax-free health account, such as a flexible spending account (FSA) or a health savings account (HSA), is one of the easiest ways to save more money on medical expenses. (Note that HSAs are available only if you have a high-deductible plan.) You should try to contribute as much as possible: For 2022, the maximum HSA contribution is $3,650 for an individual and $7,300 for a family. And people who are 55 or older can contribute an additional $1,000 to an HSA.

“An HSA is an opportunity to put aside tax-free money for unexpected medical expenses,” explains Dr. Ali. “In case you end up not using your HSA dollars for medical expenses, it also doubles as a savings account.” The extra funds carry over to the next year, and you can even invest your HSA funds in stocks and other securities. “Win-win,” she says.

3. Opt to seek care at an urgent care clinic rather than the emergency room when possible

If you can avoid the emergency room, you will not only save major money but also time. According to MedlinePlus, it’s best to visit an urgent care clinic for things like common illnesses (colds, the flu, earaches, sore throats, migraines, low-grade fevers, and limited rashes) and minor injuries (such as sprains, back pain, minor cuts and burns, minor broken bones, or minor eye injuries).

“Opting to get treatment at your local urgent care clinic rather than an emergency room is a smart choice because urgent care facilities will bill less for the same services and you can expect much shorter wait times,” says Dr. Ali.

4. Research lower prescription costs before picking up your medication

Americans spend more money on prescription medications than people in peer nations do. According to the Peterson-KFF Health System Tracker, in 2019 Americans spent an average of $1,126 per year on prescription medications.

“Nowadays, prescription coupon services have gained such popularity that they often offer rates for common medications that are lower than traditional insurance,” says Dr. Ali.

5. Talk to your doctor

If you’re worried about your medical expenses in today’s financial climate, talk to your doctor. This can open a discussion about money-saving strategies, including finding more affordable medication options, being selective about the location of future procedures (outpatient rather than inpatient), and switching to virtual appointments.

“Sometimes a patient can save more money by seeing a nurse or a physician assistant, rather than a specialist, for a commonly treatable illness,” says Dr. Ali.

Additional sources
Impact of inflation on consumer goods: U.S. Bureau of Labor Statistics (2022). “Consumer Price Index Summary
Retirement healthcare costs rising: HealthView Services (2022). “Retirement Healthcare Costs Data Report Brief
Medicare Part B premiums increasing: Centers for Medicare & Medicaid Services (2021). “CMS Announces 2022 Medicare Part B Premiums
Overall healthcare spending growing: Centers for Medicare & Medicaid Services (2021). “National Health Expenditure Data”
Limits on HSAs: Society for Human Resource Management (2021). IRS Announces 2022 Limits for HSAs and High-Deductible Health Plans
Americans spend the most on prescription medications: Peterson-KFF Health System Tracker (2022). “How Do Prescription Drug Costs in the United States Compare to Other Countries?