For starters, consider what your health coverage costs you.
Annual family premiums for employer-sponsored health insurance — the amount it costs each year for insurance, often divided into 12 monthly payments — average $22,463 this year, up slightly from a year ago, according to the Kaiser Family Foundation.
On average, workers contribute $6,106 toward the cost of a family premium, with employers pick up the rest.
However, more workers have a deductible — the amount you pay before insurance kicks in — and that deductible is also rising. In 2022, the average single deductible was $1,763, more than double what it was a decade ago.
But “don’t just look at the monthly cost of your health insurance,” Cosgray advised. “Most employers offer a few health-plan options,” he added, such as a high-deductible plan with a health savings account or a more traditional PPO.
“If you expect your health-care costs to be low for the coming year, a high deductible health-care plan paired with an HSA could be a good way to save money,” he said. “However, if you have chronic health conditions in your household and typically hit your deductible, a traditional plan paired with [a flexible spending account] may save you more over the course of a year, even if the plan’s monthly cost is higher,” Cosgray said.
“If you are going to take the high-deductible plan, you have to be able to pay the deductible if someone gets sick,” Claxton added. “The plan maybe cheaper but what if you can’t afford to use it?” Most people can’t even afford a $500 expense, he noted. “If you go to the hospital the likelihood that your out-of-pocket costs are at least $500 are pretty high.”