Premiums, deductibles, and out-of-pocket limits continue to climb, putting more pressure on families. Good planning now can help reduce costs later. According to Mercer, employees in company-sponsored health plans could see premiums rise 6% to 7% in 2026.
For those who buy insurance through the Affordable Care Act marketplace, average premiums might more than double — about a 114% increase — if temporary tax credits expire as scheduled, the Kaiser Family Foundation reports.
Get Care Before Your Deductible Resets
If you’ve already met your deductible or out-of-pocket maximum this year, consider finishing medical treatments or scheduling new ones before your plan resets on January 1. Once you reach your deductible, you pay less for covered services. After hitting the out-of-pocket maximum, you typically pay nothing for in-network care for the rest of the year.
“Say you have an outpatient procedure planned for next year — maybe it makes more sense to pull it into 2025 before the plan resets Jan. 1,” said Bill Shafransky, senior wealth advisor at Moneco Advisors.
Check If Your Medical Costs Qualify For A Tax Deduction
You may be eligible to deduct certain medical expenses from your taxes, but the rules are strict. You can only deduct expenses that exceed 7.5% of your adjusted gross income, and only if you itemize deductions rather than take the standard one. For 2025, the standard deduction is $15,750 for single filers and $31,500 for couples filing jointly. It rises slightly in 2026.
“Take the time to understand if your medical expenses may be deductible for the year,” said Paul Penke, a financial planner at Ironvine Capital Partners.
However, any expenses paid using funds from a flexible spending account (FSA) or health savings account (HSA) do not count toward this deduction since those dollars are already tax-free.
Don’T Lose Your FSA Balance
FSAs let you set aside pretax money for medical expenses, but many accounts have a “use-it-or-lose-it” rule. The 2025 contribution limit is $3,300, increasing to $3,400 in 2026. Some employers offer a grace period of up to 2.5 months or allow you to carry over up to $660 this year.
If you have remaining funds, use them before December 31 on eligible expenses such as prescriptions, dental visits, or medical supplies. “I’ve seen people lose their FSA money because they didn’t realize it had an expiration,” Shafransky said.
Contribute More To Your HSA
HSAs also allow pretax savings for health costs but don’t expire. Account holders can invest their balances, letting funds grow tax-free. Withdrawals are also tax-free if used for qualified medical expenses. According to planner Benjamin Daniel of Money Wisdom, “You could treat your HSA like a hybrid retirement account. Save your receipts, let the funds grow, and reimburse yourself later.”
For 2025, individuals can contribute up to $4,300 and families up to $8,550. In 2026, those limits rise to $4,400 and $8,750. People 55 or older who are not enrolled in Medicare can add $1,000 more. Contributions made through April 15, 2026, still count toward the 2025 limit.
After age 65, you can use HSA funds for non-medical purposes but must pay regular income taxes. Before that, non-qualified withdrawals trigger both taxes and a 20% penalty.
The more you contribute, the more you reduce your taxable income — whether you use the money now or let it grow for future medical needs.
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