Rising healthcare costs are coming for U.S. physicians from both sides of the exam table.
In 2025, family health insurance premiums hit nearly $27,000 annually, jumping 6% from last year. That outpaces inflation by double. The average deductible for individual plans climbed to almost $1,900, up from $1,773 last year. And workers at small firms now face deductibles nearly $1,000 higher than those at larger companies.
Whether you're employed, partnered in a group, or running your own practice, year-end health planning puts real money back in your pocket.
Open enrollment for 2026 health coverage runs November 1, 2025, through January 15, 2026. If you enroll by December 15, 2025, coverage starts January 1. That means you have less than three weeks to optimize your 2025 health spending and lock in your 2026 strategy.
In case you missed it: Tax Savings for Physicians, 2025 Edition
What You Need to Know About Medical Expense Tax Deductions for Physicians
You can deduct qualified medical expenses only if they exceed 7.5% of your adjusted gross income.
For high-earning physicians, that's a steep threshold. A dual-physician family earning $450,000 needs medical expenses exceeding $33,750 before any deduction kicks in.
Medical expenses include the costs of diagnosis, cure, mitigation, treatment, or prevention of disease, and costs for treatments affecting any structure or function of the body.
That covers payments to doctors, dentists, surgeons, specialists, hospital services, prescription drugs, medical equipment, insurance premiums for medical care, and transportation for medical care.
Most physician households won't clear that 7.5% threshold. But some will, particularly those dealing with high-risk pregnancies, NICU stays, fertility treatments, oncology care, major surgery, out-of-network specialist care, neurodevelopmental evaluations for children, or chronic illness management in large families.
Calculate Your Current Deductible and Out-of-Pocket Max Position
Pull your benefits summary and log into your insurer's portal right now. You need three numbers:
- Your 2025 deductible
- Your 2025 out-of-pocket (OOP) maximum
- How much of each you've already satisfied
Physicians lose real money here by underestimating proximity to their OOP max.
A year of pediatric sick visits, outpatient imaging, dermatology checks, or a spouse's procedure pushes you closer than you realize.
Once you hit the deductible, services become cheaper. Once you hit the out-of-pocket max, everything in-network becomes free for the rest of the calendar year.
Take a dual-physician household with three kids. A couple urgent care visits in February, a minor orthopedic injury in spring, updated glasses for two kids, and one dermatology biopsy might push you within striking distance of the deductible without you noticing.
If one parent had surgery earlier this year, you could be surprisingly close to the OOP max.
If you're within 60% to 70% of your out-of-pocket max, review upcoming care for every household member and bring forward:
- Follow-up imaging you've been postponing
- Specialist consults you've delayed
- Orthopedic evaluations
- Physical therapy sessions
- Backlogged dental work (if medically integrated)
- Behavioral therapy for dependents
- Overdue skin checks
- GI screening planned for Q1 2026
- Routine labs
When January arrives, you reset to zero.
That's painful when you realize the same care in December would have cost a fraction of January's price.
This planning step alone saves physician households $500 to $3,000, depending on circumstances.
Schedule December Care Before Clinics Fill Up
You know the November and December rhythm. Medical offices compress schedules. Providers reduce hours before holiday breaks. Appointments become scarce.
If you're planning to pull care forward, start scheduling ahead. Don't wait until Thanksgiving.
High-income families often delay because the physician in the household subconsciously deprioritizes their own care. That habit costs money and occasionally leads to delayed diagnoses.
Block one hour this week to:
- List every needed health item for yourself and dependents
- Assign urgency categories
- Schedule the top five before Friday
- Delegate scheduling to a partner or assistant if your clinical load is crushing
If you're near or at your OOP max, squeeze these in even if the logistics feel inconvenient. You're essentially getting services at a discount compared to January pricing.
Strategic Tax Timing: Should You Batch or Spread Medical Expenses?
Most physician households won't qualify for the medical expense deduction. But if you've had a medically expensive year, strategic timing matters.
Calculate your potential deduction: If your AGI is $450,000, your threshold is $33,750 (7.5% of AGI). If you've already spent $30,000 on qualified medical expenses this year, an additional $3,750 to $5,000 in payments before December 31 could push you over the line and create a surprisingly valuable deduction.
Qualified expenses you can prepay include:
- Outstanding medical bills from earlier in the year
- Mental health therapy sessions for early 2026
- Orthodontics (many practices allow upfront payment)
- Dental implants or surgeries scheduled for Q1
- Medical equipment
- Specialist evaluations you've been delaying
- Long-term care premiums (subject to age-based limits)
You can deduct amounts paid for insurance premiums to cover medical care or qualified long-term care, transportation for medical care, including mileage at the standard rate plus tolls and parking, and amounts paid for qualified long-term care services.
The flip side: If you don't qualify this year but anticipate significant medical expenses in early 2026 (planned surgery, fertility treatments, major dental work), delay all non-urgent payments until January and batch them strategically.
Learn more about Navigating Health Care Options If You Plan to Retire Early
Stop Forfeiting FSA Money
FSAs rank as one of the most misused physician benefits.
47% of workers with FSAs forfeit at least part of their contributions, losing between hundreds of dollars annually.
In 2023, roughly half of FSA accountholders forfeited funds, with the average forfeiture hitting $422.
Nationally, workers forfeit over $4 billion in unspent FSA money each year. That money goes back to employers, not you.
$400 annually seems like chump change until you realize you've been doing it for a decade. That's $4,000 of your own money handed back to your employer.
Action steps this week:
- Log into your benefits portal
- Pull your exact remaining FSA balance
- Identify eligible expenses before year-end
Eligible FSA expenses stretch beyond copays and prescriptions:
- Physical therapy
- Contact lenses and solution
- Dental procedures
- Vision exams and prescription glasses
- Sunscreen (SPF 15 or higher)
- Orthotics and arch supports
- OTC medications (pain relievers, allergy meds, cold medicine)
- Menstrual products
- Breast pumps and supplies
- Blood pressure monitors
- Thermometers
- First aid supplies
If you're sitting on $600 to $1,200 in FSA funds, book dental cleanings, pediatric ophthalmology visits, dermatologist appointments, and stock up on eligible supplies before clinics close for the year.
Important: Check whether your employer offers an FSA grace period or rollover:
- Grace period: up to 2.5 months (through mid-March) to use remaining funds
- Rollover: up to $660 carries into 2026
Don't assume these exist. Most employers offer one or the other, not both. Some offer neither.
Max Out Your HSA and Unlock Triple Tax Advantages
For 2025, HSA contribution limits are $4,300 for self-only coverage and $8,550 for family coverage.
Those 55 and older can add an additional $1,000 catch-up contribution. For 2026, limits rise to $4,400 for individuals and $8,750 for families.
HSAs remain the only savings vehicle with triple tax advantage of:
- Tax-deductible contributions
- Tax-free growth
- Tax-free withdrawals for medical expenses
Given that physicians often fall into the 32% to 37% federal tax brackets, every dollar you contribute effectively receives a 32% to 37% discount.
Many doctors choose not to spend their HSA on current-year costs. Instead, they pay out-of-pocket, save receipts meticulously, and allow the HSA to grow untouched for decades.
Later in life when health care spending naturally spikes, those receipts enable tax-free withdrawals or they simply withdraw for current medical expenses.
Here's a year-end HSA checklist:
- Verify your 2025 contributions so far
- Max out remaining contributions before December 31
- Decide whether to invest your HSA balance (most HSA providers offer investment options once your balance exceeds $1,000 to $2,000)
- Confirm whether your HDHP continues into 2026
- Note the higher 2026 contribution limits for planning
You can contribute to your 2025 HSA until April 15, 2026. This creates tax-planning flexibility that doesn't exist with FSAs. If you're feeling the pinch in December, you have until tax day to max out 2025 contributions.
Physicians who own practices or are partners should evaluate whether the HDHP model remains optimal for 2026 based on actual claims patterns and whether HSA tax treatment still delivers net savings.
Also read: HSA: The Ultimate Retirement Account
Evaluate Your 2026 Health Plan Before the December 15 Deadline
The deadline to enroll for January 1, 2026 coverage is December 15, 2025. That's less than three weeks away.
Many physicians skim open enrollment packets on autopilot. After a 14-hour hospital day, nobody wants to decode an 80-page benefits guide. But this autopilot approach can cost you thousands annually.
Evaluate these factors before December 15:
Total annual cost, not monthly premiums
A plan that looks cheaper per month can cost thousands more annually if the deductible and OOP max misalign with your household's typical utilization. Run the math on your actual expected spending.
Network changes
If your child's developmental pediatrician, your spouse's therapist, or your preferred specialist drops out of the network for 2026, that's a material change affecting your real costs and care quality.
Prescription drug tier changes
Specialty medications shift tiers regularly. The difference between Tier 2 and Tier 3 can mean hundreds or thousands in annual costs for maintenance medications.
Out-of-pocket maximum (more important than deductible)
This number represents your worst-case exposure. If you anticipate any significant medical events in 2026, the OOP max matters far more than the deductible or monthly premium.
Whether an HDHP still makes sense
If your family has evolved into a high-utilization household (chronic conditions, multiple specialists, ongoing PT), the HDHP plus HSA strategy might now cost more than it saves despite the tax advantages.
Check Your Dependent Care FSA for Childcare Expenses
Physicians with young children often forget that Dependent Care FSAs also have use-it-or-lose-it rules.
- End-of-year eligible expenses include:
- Preschool tuition for December
- Winter break childcare programs
- After-school program fees
- Babysitting expenses for work-related needs
Physicians working irregular hours should be especially attentive since childcare represents both an essential service and a significant expense.
Consider Prepaying 2026 Expenses Only in Specific Circumstances
Prepayment applies only when:
- You will exceed the 7.5% AGI threshold for medical deductions
- You want to reduce your 2025 taxable income strategically
- You're already at your OOP max and want to lock in free services before the January reset
- You're switching off an HDHP and losing HSA eligibility in 2026
Prepayment works best for:
- Mental health therapy packages sold upfront
- Orthodontic treatment (many orthodontists offer prepayment discounts)
- Dental surgeries scheduled for Q1 2026
- Ongoing physical therapy series
- Fertility treatment cycles
- Specialty imaging already booked for early 2026
Not every provider accepts prepayment, but many private practices, dental offices, and therapy clinics do. It's better to ask directly.
Why This Matters More for Physicians
Physicians earn high incomes but also face compressed timelines, demanding schedules, and household complexity.
You're more likely to have:
- Dual high-income earners with competing schedules
- Multiple dependents with varied health needs
- Complex insurance through different employers or practice structures
- Higher premiums without subsidy eligibility
- Greater absolute dollar exposure even with good coverage
Year-end health planning should help you recover $1,000 to $5,000 or more of your own money through intentional timing, maximizing tax-advantaged accounts, and avoiding predictable forfeitures.
So take the time, run the numbers, and execute before December 31.
Disclaimer: This article provides general information and should not be considered tax, legal, or financial advice. Consult with qualified tax and financial professionals for guidance specific to your situation.
Frequently Asked Questions
When is the deadline for 2026 open enrollment?
December 15, 2025 for coverage starting January 1, 2026. Open enrollment runs through January 15, 2026, but enrolling after December 15 delays your start date to February 1.
When do I lose my FSA money?
December 31, 2025 for most plans. Some employers offer a grace period through March 15, 2026, or allow rolling over up to $660 into 2026, but not both. Check your specific plan today.
How much can I contribute to my HSA in 2025 and 2026?
2025: $4,300 individual, $8,550 family. 2026: $4,400 individual, $8,750 family. Those 55+ add $1,000 catch-up. You can contribute to your 2025 HSA until April 15, 2026.
Do physicians qualify for medical expense tax deductions?
Most don't. You need expenses exceeding 7.5% of AGI. A household earning $450,000 needs over $33,750 in medical expenses to qualify. High-risk pregnancies, NICU stays, fertility treatments, and major surgeries may push you over.
What happens when I hit my out-of-pocket maximum?
All in-network covered services become free for the rest of the calendar year. On January 1, you reset to zero. Physician households within 60-70% of their OOP max typically save $500 to $3,000 by scheduling care before December 31.
What can I buy with remaining FSA funds?
Physical therapy, contact lenses, dental work, vision exams, sunscreen (SPF 15+), OTC medications, menstrual products, blood pressure monitors, and first aid supplies. Americans forfeit $4 billion annually in FSA funds, averaging $422 per person.
Should I invest my HSA or keep it in cash?
Invest it. HSAs offer triple tax advantages: tax-deductible contributions, tax-free growth, and tax-free medical withdrawals. High-earning physicians should max contributions, invest the balance, pay current expenses out-of-pocket, and let the HSA grow for decades.
What's more important: monthly premium or out-of-pocket maximum?
Out-of-pocket maximum. It represents your worst-case financial exposure. A cheaper monthly premium can cost thousands more annually if the OOP max misaligns with your household's utilization patterns.
Can I prepay 2026 medical expenses in 2025?
Yes, if you'll exceed the 7.5% AGI threshold or you're at your OOP max. Many practices accept prepayment for mental health therapy, orthodontics, dental surgeries, physical therapy series, and fertility treatments scheduled for early 2026.
How do I avoid forfeiting FSA money?
Log into your benefits portal now. Check your remaining balance. Schedule dental cleanings, eye exams, dermatology visits, and stock up on eligible supplies before December 31. Don't wait until Thanksgiving week when appointments become scarce.
