How to Prevent Costly Illinesses While Saving an Average of 30% on Preventive Care with HSA/FSA/HRA Funds
Healthcare costs are a significant concern for many Americans, but leveraging pre-tax Health Savings Accounts (HSAs), Flexible Spending Accounts (FSAs), and Health Reimbursement Arrangements (HRA) offers a smart way to save.
On average, shoppers can save 30% by using pre-tax dollars to purchase qualified health-promoting items.
Beyond the immediate savings, using these funds for disease prevention products can lead to long-term health benefits and further financial savings by reducing medical expenses over time.
Healthcare expenses can feel overwhelming, especially when most costs arise after we get sick. In fact, 95% of medical costs occur after illness strikes, leaving only a fraction spent on prevention.
However, there’s a solution that saves money now and promotes long-term health: using pre-tax Health Savings Accounts (HSAs), Flexible Spending Accounts (FSAs), and Health Reimbursement Arrangements (HRAs).
The HSA/FSA accounts allow shoppers to save an average of 30% on eligible products and services, while helping to prevent the costly chronic diseases that drive up healthcare spending.
This guide explains how these tax-advantaged accounts work, highlights their unique features, and demonstrates how they can help you invest in preventive care to reduce long-term healthcare expenses.
It's too expensive to get sick—first, medical bills pile up, then work interruptions follow. Chronic conditions make it worse, causing ongoing suffering, costly treatments, and stress that impact relationships, lifestyle, and overall quality of life. What’s frustrating is that many of these chronic conditions could’ve been prevented with simple lifestyle changes made early enough!
95% of Healthcare Costs Are Incurred After We Get Sick
Healthcare spending is overwhelmingly reactive, with most money allocated to treatments rather than prevention.
Key Drivers of High Costs
1. Chronic Disease Management:
Chronic illnesses like diabetes, heart disease, and cancer account for 90% of the U.S.’s $4.1 trillion annual healthcare expenditures.
For instance, the average cost of managing diabetes can exceed $9,600 per year per patient, while cancer treatments often cost upwards of $10,000 per month.
2. Late Diagnosis:
Many diseases, such as hypertension and prediabetes, remain undetected until they require more intensive—and expensive—interventions.
3. Reactive Healthcare System:
The focus is often on treating symptoms and complications rather than addressing root causes or risk factors through preventive care.The Financial Implication: Delayed detection and chronic disease management result in escalating costs that could be mitigated by investing in preventive measures.
Solutions are simpler than we've been told…
11 of the 12 largest killers of Americans are directly tied to lifestyle factors as the root cause. Preventing chronic disease isn’t about prescriptions or surgeries—it’s about focusing on solutions that prevent and reverse the chronic conditions that plague the US today.
Preventive care is more powerful than you might think—thousands of peer-reviewed studies show that regular exercise, quality sleep, and targeted supplements can not only prevent but also literally reverse many chronic conditions.
It’s amazing how these simple, everyday habits can transform your health and protect you from long-term complications. By embracing preventive care, you’re investing in a healthier, brighter future.
Today, 95% of all healthcare spend goes towards treatment, not prevention. Americans will be healthier if we can incentivize better lifestyle choices, before people get sick.
How HSA/FSA Accounts Can Save You 30% on Average on Preventive Care
Tax-advantaged accounts like HSA, FSA, and HRA enable you to use pre-tax dollars for eligible medical expenses. These accounts not only reduce your taxable income but also promote smarter healthcare spending.
How Pre-Tax Savings Add Up
- Federal Income Tax Savings: 10%-37%, depending on income.
- State Income Tax Savings: Up to 13% in some states.
- Social Security and Medicare Tax Savings: 7.65% for most taxpayers.
Example: If you are in a 24% federal tax bracket and a 6% state tax bracket, you save 37.65% on eligible expenses when using HSA/FSA/HRA funds.
"Ninety percent of chronic disease is preventable with simple lifestyle changes."
– Dr. David Katz, Founder and Strategic Director of True Health Initiative, Board-certified specialist in Preventive Medicine/Public Health
How HSA/FSA Purchases Work
Pre-tax dollars
A Health Savings Account (HSA) or Flexible Spending Account (FSA) lets you set aside and spend money before income taxes.
Shopping with pre-tax dollars translates to an average net savings of 30%.
Letter of Medical Necessary
A Letter of Medical Necessity allows specific purchases to be paid for or reimbursed using HSA/FSA funds.
It’s typically provided by your healthcare practitioner, service provider, or the merchant of eligible products.
Eligible expenses
The IRS defines eligible expenses as medical treatments, preventive health tools, and services that manage health conditions.
You can pay for these expenses with your HSA/FSA card or request reimbursement from your plan administrator.
Key Features of HSA, FSA, and HRA
| Feature | HSA | FSA | HRA |
|---|---|---|---|
| Eligibility | HDHP required | Employer-provided plan | Employer-provided plan |
| Ownership | Employee owns | Employer owns | Employer owns |
| Tax Benefits | Contributions, growth, and withdrawals are tax-free | Pre-tax contributions, tax-free withdrawals | Employer contributions are tax-free |
| Contribution Limits (2024) | $4,150 (individual), $8,300 (family) Additional $1,000 for individuals aged 55+ | $3,050 | No IRS-set limit (employer decides) |
| Rollover | Yes, unlimited | Limited or none (depends on plan) | Depends on employer policy |
| Portability | Yes | No | No |
| Employer Contribution | Optional | Optional | Mandatory |
| Investment Options | Yes | No | No |
Important Notes
- Check Eligibility:
Not all expenses are automatically covered, and some require a Letter of Medical Necessity (LMN). Always confirm with your plan administrator. - Save Receipts:
Keep documentation of purchases and prescriptions to streamline reimbursement. - Maximize Preventive Care:
Combining HSA/FSA/HRA funds with preventive care can significantly reduce long-term healthcare costs while improving your overall well-being.
Using HSA/FSA/HRA Funds for Preventive Care
Impact of Prevention
- Cost Savings: Accouding to the CDC, for every $1 spent on preventive measures, $5.60 in healthcare costs can be avoided.
- Health Outcomes: Regular use of preventive tools can reduce the risk of chronic diseases by up to 80% for conditions like heart disease, stroke, and diabetes.
- Empowerment: Proactive care puts individuals in control of their health.
Preventive Care Categories Qualified for HSA/FSA/HRA Funds
HSA, FSA, and HRA accounts are powerful tools for managing healthcare expenses, including many preventive care items and services. Below are the main categories of preventive care that typically qualify for reimbursement. Eligibility may vary depending on your plan and whether a Letter of Medical Necessity (LMN) is required.
1. Screening and Diagnostic Services
These help detect potential health problems early, when treatment is most effective.
- Annual physical exams
- Blood pressure screenings
- Cholesterol tests
- Glucose and diabetes screenings
- Cancer screenings (e.g., mammograms, colonoscopies)
- Vision and hearing exams
2. Health Monitoring Devices
At-home devices allow individuals to track their health regularly and catch early signs of illness.
- Blood pressure monitors
- Glucose meters and test strips
- Thermometers (including smart thermometers)
- Pulse oximeters
- Body composition scales (e.g., measuring BMI, fat percentage)
- Wearable heart rate and activity monitors
3. Posture and Ergonomic Support
Products that prevent musculoskeletal issues, especially for those working in sedentary environments.
- Posture correctors
- Ergonomic chairs and seat cushions
- Standing desks and desk converters
- Lumbar support cushions
- Wrist and back braces
4. Wellness and Fitness Programs
Workout and training programs are eligible if deemed medically necessary to treat or prevent a specific condition, often requiring an LMN.
- Physical therapy sessions
- Personal training programs for injury recovery or chronic pain management
- Weight loss programs (if prescribed for obesity or other medical conditions)
- Cardiac rehabilitation programs
5. Mental Health Support
Maintaining mental well-being is a crucial part of preventive care.
- Therapy and counseling sessions
- Stress management tools (e.g., biofeedback devices)
- Sleep aids like CPAP machines (for sleep apnea)
- Meditation apps (if prescribed for anxiety or stress)
6. Reproductive and Family Health
Preventive care for family planning and reproductive health.
- Birth control (over-the-counter and prescribed)
- Fertility monitors and ovulation kits
- Prenatal vitamins (prescribed)
- Breast pumps and accessories
7. Dental and Vision Preventive Care
Essential for maintaining oral and visual health.
- Dental cleanings and X-rays
- Prescription glasses and contact lenses
- Contact lens solution and cleaning kits
- Vision correction procedures like LASIK (if medically necessary)
8. Preventive Medications and Supplements
Some medications and supplements qualify, especially if prescribed for preventive purposes.
- Vaccines (e.g., flu shots, travel vaccines)
- Smoking cessation aids (e.g., nicotine patches, gum)
- Prenatal and postnatal vitamins (prescription required)
9. First Aid and Emergency Preparedness
Preparing for minor injuries and emergencies can prevent complications.
- First aid kits and supplies
- Bandages, wraps, and gauze
- Antiseptics and antibiotic ointments
- Burn care products
10. Exercise and Physical Activity Equipment
While general fitness equipment isn't typically covered, some items are eligible if they help manage a specific medical condition and are supported by an LMN.
- Treadmills and stationary bikes (if prescribed for heart or weight-related conditions)
- Balance balls and wobble boards for physical therapy
- Resistance bands for injury recovery or chronic pain
- Foam rollers and massage tools
11. Smoking Cessation and Addiction Programs
Preventive care includes tackling smoking and other addictions that lead to chronic diseases.
- Smoking cessation programs
- Nicotine replacement products
- Addiction counseling and therapy
12. Travel and Safety Aids
Products that ensure safety and comfort during travel or specific activities.
- Sunscreen (SPF 15 or higher)
- Prescription sunglasses
- Travel vaccines
- Anti-motion sickness bands or medications
13. Wellness Apps and Digital Health Tools
Some apps and digital tools qualify, especially those prescribed for managing conditions.
- Fitness and weight management apps (if medically necessary)
- Health tracking apps for chronic diseases like diabetes
- Mental health apps (e.g., for meditation or stress management)
Maximize the Benefits of HSA/FSA/HRA Accounts
Plan Your Annual Contributions Wisely
✅ Review eligible expenses and estimate how much you’ll spend on health-related products or services.
✅ For HSAs, contribute the maximum amount to build long-term savings.
Prioritize Preventive Purchases
✅ Invest in health tools like fitness trackers, ergonomic supports, and at-home medical devices.
✅ Annual check-ups, cholesterol tests, and other diagnostics can identify issues early.
Track Deadlines
✅ Check FSA and HRA policies for rollover or grace periods to maximize use.
✅ FSA funds often have a “use-it-or-lose-it” policy, so plan purchases to avoid forfeiting unused money.
Take Advantage of Tax Savings
✅ Use HSA funds to pay for eligible items now while growing savings tax-free for future healthcare expenses.
✅ Save on an average of 30% when shopping with HSA/FSA funds.
Why Prevention and Smart Spending Go Hand-in-Hand
When 95% of healthcare costs arise after sickness, prevention isn’t just a strategy—it’s essential.
The smartest healthcare investment is prevention.
Make it simpler and more affordable by leveraging your HSA, FSA, or HRA accounts to stay healthy while reducing the financial burden of reactive care.
By using pre-tax dollars for preventive care, you not only save money but also enhance your health and overall quality of life.
Products like posture correctors, blood pressure monitors, and ergonomic supports are practical tools that help prevent the chronic conditions responsible for the majority of medical spending.
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Take Action
Use your HSA/FSA/HRA funds to invest in preventive tools and programs. By prioritizing exercise, sleep, and targeted supplements, you can prevent or even reverse chronic conditions, improving your quality of life while reducing healthcare costs.
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FAQ's
"Ninety percent of chronic disease is preventable with simple lifestyle changes."
– Dr. David Katz, Founder and Strategic Director of True Health Initiative, Board-certified specialist in Preventive Medicine/Public Health
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