azmanl | E+ | Getty Images
As a certified financial planner and personal finance reporter, I spend a lot of my time thinking about saving money on rising healthcare costs.
Health insurance is the primary benefits of employees, and many workers don’t spend too much time choosing the right plan, the survey shows.
In the fall of 2024, nearly a third of health insurance enrolled people spent choosing their plans in 2024, according to a survey by the Employee Benefits Institute, which featured more than 2,000 participants.
About 48% of my generation, millennials, admitted to choosing a health plan “blindly” because they didn’t understand. This is another JustWorks survey of nearly 4,200 US adults starting in late 2024.
More details from personal finance:
Debt struggles collide with consumers at all income levels – this is why
Trump accused Fedo’s Lisa cook of mortgage fraud. That may be difficult to prove
Student loan repayment plans have changed – and more changes ahead
As healthcare prices rise, choosing the wrong plan can be expensive.
The nonprofit health health plan is expected to increase by 9% in 2026, based on a plan to cover 11.6 million workers based on a June survey response from 121 large employers, according to the health nonprofit Business Group.
In 2024, employers offering health insurance covered 75% to 85% of planning costs, with workers paying the rest through insurance premiums and out-of-pocket costs.
But as planning costs rise, businesses can move more costs to workers in 2025, financial consulting firm Mercer found, based on a study of around 700 organizations.
Amidst uncertain costs, here are how we are preparing our open healthcare enrollment options this fall:
Medical Expense Tracking
One of the most difficult parts of choosing health insurance is knowing your future needs. There is no crystal ball, but you can check past medical expenses.
A few years ago, I began tracking my annual out-of-pocket medical expenses, including co-payments, prescriptions, medical expenses, and over-the-counter expenses. It’s boring, but I use numbers for two open registration tasks:
Find the Right Health Insurance Plan Determine how much money will save my Flexible Expense Account (FSA)
The total out-of-pocket costs, along with detailed receipts, will also help with tax time and check if you can claim medical expenses deductions, which is not typical. (According to the latest IRS data, tax deductions must be itemized to qualify, with 90% of filers using standard deductions. Still, unfilled medical expenses should exceed 7.5% of their adjusted total revenue.)
Pay now and later
There are usually two options for health planning. You can pay more in advance with a higher premium from each salary. Alternatively, you can use the larger deduction to pay more later. This is how much you owe before the insurance begins.
By tracking your annual healthcare costs, you can see which options will be more affordable next year.
In some cases, if you are healthy and rarely use the service, the higher deductions will be cheaper. Additionally, many plans cover preventive care for your body and other every year, free of charge, before it becomes deductible.
The strategy can change when you expect multiple treatments or surgeries. In that case, I would consider opting for a higher premium, lower deductible plan.
Deductible Coverage for Your Health Insurance
Regardless of the health plan I have chosen, I always aim to cover deductibles and other out-of-pocket expenses with the FSA.
Money goes before taxes and I can spend those pre-tax funds on eligible medical expenses, joint payments and deductions. I’m thinking about saving taxes like discounts.
The downside of FSAS is that you must either spend a balance or forfeit the funds by the end of the calendar year. Track your expenses monthly to avoid the balance of December surprises.
According to 2024 data from market research data provider Numerator, the average household FSA contribution was $2,250 in 2024, with 77% expected to be spent by November.
Dowell |Moment |Getty Images
Use your health savings account
Before joining CNBC, I was a full-time freelance writer for six years, but had high health insurance plans through Healthcare.gov.
Although the premiums were high, I was able to contribute to a health savings account that acts like a long-term emergency fund for medical expenses. Unlike FSA, balance rolls annually.
If you can afford to touch your money, some HSAs can invest your balance for long-term growth.
The HSA offers three tax benefits. There is a prepayment deduction on deposits, funds increase tax-free, and withdrawals are tax-free due to eligible medical expenses.
Two-thirds of companies offered investment options for HSA contributions, according to a survey by the American Council of Planning Sponsors, which voted over 500 employers in the summer of 2024.
However, the survey shows that only 18% of participants had invested their HSA balances slightly from the previous year.
