October 2025
Barbara O’Neill, Ph.D., CFP®, AFC®
Distinguished Professor and Extension Financial Management Specialist Emeritus
Rutgers Cooperative Extension
One of the most obvious connections between health and wealth is the cost of health care. Older adults on Medicare spent 13.6% of household income on health-related expenses in 2022 and younger adults spent 6.5% according to research by KFF, a non-profit organization that provides data on public health issues.
"Health care" includes expenses for health insurance premiums plus deductibles, copayments, and/or coinsurance when medical bills occur. Costs can add up to hundreds or thousands of dollars annually. What to do? Implement time-tested strategies to try to save money. As we enter open enrollment season for health insurance plans, consider these ten steps to reduce health care expenses:
Focus On Prevention- Practicing good health habits can reduce the risk of costly medical and dental problems. Examples include regular health screening exams (e.g., colonoscopies and mammograms), vaccinations as needed (e.g., flu, shingles), nutritious food, regular exercise, washing hands frequently, and flossing teeth.
Stop Risky Behaviors- Quitting smoking reduces the risk of expensive long-term complications such as lung disease (COPD) and cancer. Limiting alcohol consumption reduces the risk of accidents, liver disease, and at least seven types of cancer including breast, liver, and throat.
Discuss Financial Constraints- A Wall Street Journal article noted that openly mentioning your financial concerns may be enough to prompt your doctor to recommend a less expensive treatment, provide a supply of free drug samples that the doctor has on hand, and/or write a prescription for less expensive generic drugs.
Check Your Drug Plan Formulary- A drug plan formulary, also known as a prescription drug list (PDL), is a list of prescription drugs covered by a health insurance plan. It typically changes annually when a new plan year begins. Make sure that your prescribed drugs will be on your health care plan's future formulary.
Compare Costs- To check costs for diagnostic services (e.g., CT scan, mammogram, bone density test), use your doctor's billing code for an "apples to apples" comparison. The cost of a procedure could vary by hundreds or more dollars. Example: hospitals often charge higher prices than free-standing radiology providers.
Get Prescription Deals- Order a 90-day supply by mail instead of buying a 30-day supply from a local pharmacy to lower the per-dose drug cost. Many plans have the same copay for a 30-day and a 90-day supply. Ninety-day supplies are most beneficial for medications taken regularly for chronic conditions.
Check for Billing Errors- Request an itemized statement of your medical procedures and their costs and review it for errors. Report errors to the service provider promptly and request a revised billing statement. It is estimated that 80% of all medical bills contain errors, often due to incorrect billing codes.
Use Free Health Care Services- Take advantage of free or low-cost health fairs, well-child clinics, flu shots, gyms, and other health and medical services available at your workplace or in your community. Do the same thing for veterinary services, such as free rabies clinics for pets.
Follow Health Insurance Rules- Read the "fine print" in your health insurance policy regarding referrals to specialists and pre-certification/authorization for expensive medical procedures. Not knowing the rules for your health plan and what is not covered can result in denial of coverage for a claim.
Consider Alternative Health Care Settings- Explore community health clinics. Many offer sliding scale fees for primary and preventive care services. Also, for non-life threatening issues, urgent care is generally far less expensive than the emergency room at a hospital.