How to Save Money With High Healthcare Expenses

If you reach your health insurance out-of-pocket maximum every year, you may have opportunities to save money. This article will explain what you should keep in mind when selecting a health insurance plan if you have ongoing high medical expenses and expect to reach the out-of-pocket maximum on any policy.

People with ongoing medical needs are well aware that coinsurance expenses can be prohibitive. This is especially true if you are on an expensive medication, require frequent infusions, or need any recurring costly treatments. The good news, however, is that your high healthcare expenses could be the key to two savings opportunities.

  1. You may be able to save on your out-of-pocket expenses like copays, coinsurance, and deductibles.
  2. You may be able to save on health insurance premiums

But the savings techniques we'll discuss here only work for people who expect to reach their plan’s out-of-pocket maximum each year. If you're not typically meeting your plan's out-of-pocket maximum, you'll want to consider other strategies for maximizing your health insurance benefits.

woman reading her bills
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Choose a Plan With a Lower Out-of-Pocket Limit

Health insurance companies pay 100% of your covered in-network expenses for the rest of the year after you meet your yearly out-of-pocket maximum (note that this is not applicable to Original Medicare, which does not have an out-of-pocket maximum; we're referring here to private major medical health plans). 

As long as you follow your health plan's rules for things like referrals and prior authorization, your expenses should be minimal after you meet the annual out-of-pocket maximum. You should only have to pay your monthly health insurance premium, plus the charges for any services that either aren't covered by your plan (things like adult dental care, for example, or non-restorative cosmetic surgery), or that are obtained outside your health plan's network.

Therefore, if you choose a health plan with a lower out-of-pocket maximum than you’re currently paying, you may save money, depending on the difference in premiums. In many cases, you'll find that the lower out-of-pocket limit more than offsets the higher premiums.

ACA-compliant plans (ie, all major medical plans that aren't grandmothered or grandfathered) are required to have out-of-pocket maximums that don't exceed $9,100 for a single individual in 2023. But there are also numerous plans, in both the employer-sponsored and individual/family markets, that have out-of-pocket maximums well below the upper limits.

How to Find a Plan With Lower Out-of-Pocket Limits

Look for a plan with a relatively high deductible and coinsurance, but a lower overall out-of-pocket limit. Since most people never reach the out-of-pocket maximum, the higher the deductible and coinsurance the less the company has to pay for healthcare services for its typical members. This allows them to charge a lower premium.

Since you know you’ll be paying the full out-of-pocket amount during the year, the higher deductible and coinsurance don't increase your yearly costs. In fact, since you're choosing a plan with a lower total out-of-pocket maximum, your yearly costs will be lower than they would have been on a plan with a higher out-of-pocket maximum—regardless of the deductible. (We'll talk about premiums in the next section, but it's important to pay attention to your total costs, including premiums and out-of-pocket medical expenses. A lower out-of-pocket limit won't be beneficial if you face a premium increase that more than offsets the savings.)

But when you know that you're going to have high medical costs, the number that matters most in terms of the plan design is the maximum out-of-pocket exposure, since you know you're going to be reaching that limit one way or the other. It won't matter whether you get there via deductible alone or deductible plus coinsurance and/or copays, so the plan design beyond the out-of-pocket limit isn't as important when you're facing significant claims costs during the year.

However, the higher deductible and coinsurance do have an impact on when you pay your out-of-pocket expenses, shifting that toward the beginning of the plan year. You’ll reach the out-of-pocket maximum earlier in the year because it's lower and thus easier to reach.

But because your deductible is higher, your out-of-pocket costs will be front-loaded towards the start of the year. In other words, you'll be paying your own costs at the beginning of the year, while you're meeting your deductible, and then your insurer will be paying your costs later in the year, after you've met your deductible and then your out-of-pocket maximum.

Choose a Plan With the Same Out-of-Pocket Maximum but a Lower Premium

Another way to save is to shop for a health insurance plan with the same out-of-pocket limit as your current plan—or perhaps even a lower out-of-pocket limit—but a lower monthly premium. While you’ll still have similar yearly out-of-pocket healthcare expenses, you’ll save money each month on the cost of the premium.

Once again, look at plans with a higher deductible and coinsurance than your current plan. Although you’ll need to have money available in the first few months of the year to meet your new expenses, you’ll have wiggle room in your budget since you’ll be paying less in monthly premiums.

Buyer Beware

If you've got a medical condition that requires significant ongoing care, it's important to pay attention to the specifics—beyond the premium and cost-sharing—of the plans you're considering. You'll want to make sure that the new plan has a provider network that includes your healthcare providers, or that you'd be ok with switching to the medical professionals who are on the plan's network.

And keep in mind that each plan covers different prescription drugs. The covered drug list for a plan is called the formulary, and formularies vary from one plan to another. If you inadvertently enroll in a plan that doesn't include your medication in its formulary, you would have to switch drugs or treatments or pay the entire cost out-of-pocket. Because your healthcare costs are so high, it’s crucial that you thoroughly investigate a new health plan’s benefit coverage before you switch.

The Affordable Care Act Helps With Costs

The Affordable Care Act also created a cost-sharing subsidy to help decrease the out-of-pocket maximum for eligible people with modest incomes (up to 250% of the poverty level; for 2023 coverage, this translates to $33,975 for a single individual in the Continental U.S.).

This subsidy is available to people who buy their own health insurance through the exchange/marketplace, as long as they select a silver plan. If your income makes you eligible for this subsidy, you should understand how it would reduce your out-of-pocket maximum and make your benefits more robust before you select a health plan.

If you're eligible for the cost-sharing subsidy and you select a bronze plan, you could end up leaving a lot of money on the table. Your monthly premiums will be lower with the bronze plan, but you'll miss out on the cost-sharing subsidy and might end up with much higher out-of-pocket costs as a result.

Before You Switch Plans

Make sure you’ll have enough money available early in the plan year to pay the potentially higher initial costs like deductible and coinsurance before you meet the new out-of-pocket limit and start reaping the savings. Consider a Flexible Spending Account if your employer offers one, or a Health Savings Account if you enroll in a health plan that's HSA-qualified.

If sticking with your current healthcare provider is important to you, make sure he or she is in-network with the health plan you’re considering.


It's uncommon for a person to meet their health insurance out-of-pocket limits every year. But for those who do—or for a person who anticipates large one-time medical expenses in the coming year—there are strategies for reducing total health care spending. For example, it can sometimes be beneficial to select a plan with a higher deductible but lower out-of-pocket limit, especially if the plan has a lower monthly premium.

A Word From Verywell

If you're meeting your health plan's out-of-pocket limit every year, or if you're anticipating significant medical costs for an upcoming year, there may be ways you can reduce the total amount you spend. You'll need to include premium costs and out-of-pocket costs, and also factor in any potential tax savings from an HSA or FSA, if they're available to you.

2 Sources
Verywell Health uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read our editorial process to learn more about how we fact-check and keep our content accurate, reliable, and trustworthy.
  1. Out-of-Pocket Maximum/Limit.

  2. U.S. Department of Health and Human Services. 2022 Poverty Guidelines, 48 Contiguous States.

By Elizabeth Davis, RN
Elizabeth Davis, RN, is a health insurance expert and patient liaison. She's held board certifications in emergency nursing and infusion nursing.