How To Earn More Points When Paying Your Next Health Care Bill

a stethoscope on top of money

It was a relatively quiet holiday season, that is, until my wife sliced her finger open while using a mandoline. The cut was bad enough that it required a trip to the emergency room, and we should be receiving the dreaded, over-priced medical bill any day now.

Having spent my entire career in the employer-sponsored health care consulting space, I’ve put in countless hours designing health plans for my client’s employees. But until today, I hadn’t realized that my work world and the points world were actually intersecting. Here are a couple tricks that I use to maximize my points-earning related to health care expenditures (medical, prescription drug, dental, vision, etc.) that may also be of use to you.

One caveat before we go further. Often times we let our points and miles hobby (obsession?) cloud our judgement, leading us to make irrational decisions all in the name of earning more. But your health care decisions should first and foremost be based on your specific health and life situations, with no compromise in choosing what’s “right” in order to earn more points.

Pay with your credit card, submit receipts for reimbursement from a health care spending account

Here’s the key to this entire section – health care spending accounts allow you to contribute pre-tax dollars for qualified health care expenditures, subject to IRS guidelines. There are generally two types of spending accounts that employers offer, Flexible Spending Accounts (FSA’s) and Health Savings Accounts (HSA’s). The main difference between the two types are that FSA contributions are “use it or lose it” each year while HSA contributions do not expire.

If you have one of these accounts setup, you’re most likely making pre-tax contributions directly from each paycheck. These health care spending accounts are similar to bank checking accounts, and come with a debit card to use for purchases.

Right now, I’d guess that most people use one of the two methods below to pay for health care expenses:

A: Pay with credit card, pay credit card bill with after-tax dollars
B: Pay with FSA/HSA debit card, which deducts pre-tax dollars from spending account

In case A, you’re essentially treating your health care expenses like any other purchase such as a TV or groceries. However, you’re missing out on the ability to pay for health care expenses with pre-tax dollars, which can be upwards of a 40% savings depending on your tax bracket. And in case B, since you’re using pre-tax dollars deducted directly from your health care spending account, you’re missing out on the points-earning by not involving a credit card.

What you should be doing is C – combine the two methods above. First, pay your health care bills with your credit card, thereby earning points as you would with any purchase. However, instead of using after-tax dollars to pay your credit card bill, you can submit your receipts to your FSA/HSA administrator, which will then allow you to be reimbursed with the pre-tax dollars from your health care spending account. So you’re getting the best of both worlds – earning points, while paying with pre-tax dollars.

As an added bonus, if you know that you have a large health care expense coming up, you can leverage this technique to treat it as you would with any other large purchase in helping to meet minimum spend requirements.

Pay less out of your paycheck, but more out-of-pocket at the doctor’s office

If you receive health insurance through your employer, then you’re used to seeing a chunk of money come out of each paycheck to pay for that insurance. Those deductions are made on a pre-tax basis, and may range anywhere from $0 to $1,000+ depending on your employer and the health plans you select.

Most employers offer a range of plans, with the difference between them being the level of coverage or insurance that they provide. In general, the better plan you select, the more you’ll pay out of your paycheck in exchange for less out-of-pocket expense when you see the doctor. Conversely, you can select a bare-bones plan that costs you virtually nothing out of your paycheck, in exchange for high out-of-pocket costs should you become seriously ill and need to be hospitalized.

Here’s the tricky part – nobody can predict exactly how many times they’ll be sick in a given year, or how many times they’ll need to see the doctor. That’s the thing about insurance, you don’t need it until you need it. But at the same time, the majority of people are over-insured, meaning that they’ve purchased more insurance coverage than they really need.

Let’s look at two scenarios that arrive at the same total costs:

A. $4,000 (paycheck) + $1,000 (out-of-pocket) = $5,000
B. $1,000 (paycheck) + $4,000 (out-of-pocket) = $5,000

In both cases, the cost of health care expenses is identical at $5,000. The main difference is that person B has spent less out of their paycheck, in exchange for more out-of-pocket liability when utilizing health care services. From the points-earning perspective, person B is better off since you only earn points on the out-of-pocket component, and would end up with 4,000 points vs. person A’s 1,000. So all else equal, the out-of-pocket portion is where you’d ideally want to spend your money, in order to maximize your ability to earn points.

This is the type of strategy that my wife and I use, as we are enrolled in a Consumer Driven Health Plan (CDHP) that has a high deductible of $2,600 in exchange for minimal paycheck deductions. To optimize our health care spending, we also utilize a HSA spending account, which is only available to those who enroll in these high-deductible health plans.

Again, I want to be clear that you should absolutely not be basing your medical selections on the number of points you can earn. However, if you subscribe to the theory above and are comfortable with the inherent risk vs. reward of the strategy based on your health situation, then you can almost certainly increase the points you earn from health care expenses beyond what you’re getting today.


  1. hi, I think I am confused with your reasoning for option A. even I pay by A, but I can still submit and get reimburancement from health care account for pre-tax. So I think I can just skip using debit card. Please let me know if I am wrong.


  2. One idea I had a few months ago during a change in my health insurance is that I noticed that my doctor’s office would bill me the full bill sometimes and if I paid it and then gave them my insurance information, my account would then get a CREDIT, which they would mail to me in the form of a check.

    So I had the idea to not give them my insurance, instead pay the bill in full at the time of service (with a CC), and then give them the insurance information and get a check a few weeks (months?) later for the amount paid by the insurance.

    It seemed like it would work but also seemed like it would be fraught with problems and chances to end up out a lot of money so I don’t think it’s wise, but that’s what your post reminded me of.

    1. Interesting idea – I think it’d only work for the first visit to a new doctor or after the change in insurance. Once the doctor has your insurance on record, it’d be hard to get them to ignore it and still bill you the full amount.

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