Maximizing Points and Miles on Healthcare Spending

Apr 2, 2020

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Paying for healthcare can be a major expense — as many Americans are painfully aware. Even if you are insured, high annual deductibles and co-payments can take a major bite out of your finances. You should know how to maximize your points-earning ability on much-needed healthcare expenses like fee-for-service procedures, insurance premiums and prescription drugs.

(Photo by Getty Images)
(Photo by Getty Images)

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Unfortunately, payments to insurance companies and healthcare providers don’t fall under any bonus reward category on any credit card. Therefore, the majority of healthcare spending will be of the non-bonus category variety.

Here’s a look at the most valuable rewards offered for general spending and strategies for maximizing your points earning on your healthcare expenses.

In This Post

When can you pay with a card?

Many doctors’ offices and hospitals accept credit cards as a form of payment (some emergency rooms may be the exception). Patients also are allowed to use a credit card to pay for expenses, which are not covered by their insurance companies following a visit to the doctor.

In my experience, medical, dental, eye and veterinary offices allow patients to pay for their services via credit card. All prescriptions at pharmacies and drug stores can be charged to your card.

When it comes to purchasing prescription drugs and over-the-counter medication, you can earn bonus rewards or even cash back by making your medication purchases at a supermarket. Unfortunately, there are very few cards that offer bonuses at drugstores, although that category has shown up on the Chase Freedom and Discover it cards as rotating quarterly categories in the recent past.

Related reading: Best credit cards for groceries

If you pay for your healthcare out-of-pocket

Many Americans receive health insurance through their employer, so their insurance premiums are deducted from their paychecks on a pretax basis. However, many people including, entrepreneurs, real estate agents and freelancers, purchase their own insurance on the individual market and pay for their premiums out-of-pocket.

You may see health insurers list credit cards as a form of payment for services right on their website (i.e., Blue Cross Blue Shield of Michigan). Other insurers list whether or not you can pay with a credit card but limit payment to use of a debit card or bank account. Check your insurer’s website or simply call and ask if they will accept a credit card as payment.

(Photo by Hush Naidoo/Unsplash)
Whether or not you can pay by credit card depends on your health insurer. (Photo by Hush Naidoo/Unsplash)

If you pay for your own healthcare rather than through an employer, high-cost premiums may be one of your biggest monthly expenses. If your insurance provider accepts credit cards, you could potentially rack up plenty of points and miles on that monthly expense. Just remember to pay off your credit card in full to avoid hefty interest fees.

Related reading: Ten Commandments for travel rewards credit cards

If you need time to pay off those medical bills, a 0% intro APR credit card that defers interest on purchases for a certain number of months may be a smart choice. Make sure you pay those healthcare expenses before the zero-interest promotional period ends.

The best cards for healthcare spending

Here are some cards to consider to get the most valuable rewards from general expenses such as medical bills and insurance premiums:

Chase Freedom Unlimited — This card offers you 1.5% cash back on purchases, with no bonus categories. Points are worth 1 cent each and can be redeemed as cash back, gift cards and travel reservations. But you can do much better if you also have a card that earns Chase Ultimate Rewards. With cards such as the Chase Sapphire Reserve, Chase Sapphire Preferred Card or Ink Business Preferred Credit Card, you can transfer your points from this card to your other Chase cards, and use the airline and hotel point transfer options. Once transferred, your points will be worth 2 cents apiece, according to TPG’s valuations. Best of all, the Freedom Unlimited card carries no annual fee.

The Blue Business® Plus Credit Card from American Express — If you’re a small-business owner, you can use this card to pay for things like medical insurance premiums and enjoy 2x points on your first $50,000 in purchases per calendar year, and then 1x on other purchases. According to TPG’s valuations, these points are worth 2 cents each, giving you a total value of 4 cents per dollar spent. Terms apply. You can transfer your points to Amex airline or hotel transfer partners, and there’s no annual fee for this card (see rates and fees).

The Amex EveryDay® Preferred Credit Card from American Express — This Amex card offers you only 1 point per dollar spent on non-bonus purchases, but you can earn a 50% points bonus each month that you make at least 30 transactions, allowing you to earn as much 1.5 points per dollar spent on medical expenses. This works out to 3 cents each based on TPG’s valuations. The card also earns 3 points per dollar spent at U.S. supermarkets (up to $6,000 per year) and 2 points per dollar spent at U.S. gas stations, making it a great everyday card. There’s a $95 annual fee for this card.

Capital One Venture Rewards Credit Card — This card offers 2 miles per dollar spent on all purchases and each mile is worth 1 cent as a statement credit toward travel expenses. Meaning a $500 medical bill would earn you 1,000 miles or about $18 worth of miles toward travel, according to TPG’s latest valuation of Capital One Rewards at 1.85 cents per mile. There’s a $95 annual fee.

The information for the Chase Freedom and Amex EveryDay Preferred has been collected independently by The Points Guy. The card details on this page have not been reviewed or provided by the card issuer.

Make the most of your healthcare spending

Although healthcare is not designated as a bonus rewards category on any credit card, there are still strategies that you can implement to reap a generous return on your spending. Here are some tactics:

Meet your minimum spending on a welcome offer

There are plenty of enticing credit cards that come equipped with a generous sign-up bonus after meeting a certain spending threshold. Cards such as the Ink Business Preferred® Credit Card offer a whopping 100,000 bonus points welcome offer after you spend $15,000 on purchases in the first three months from account opening.

Although the required spending to earn the welcome bonus is high, that’s a minimum of $1,250 toward travel rewards when you redeem through the Chase Ultimate Rewards travel portal, since Chase allows you redeem directly through them at 1.25 cents each. However, TPG’s valuations peg the value of this sign-up bonus at $2,000 because you can transfer your points at a 1:1 ratio to a selection of hotel and airline partners, including HyattSouthwest and United.

If you have a steep healthcare expense you could potentially meet the minimum spending required to unlock this card’s lucrative welcome offer in one swoop or at least a large chunk of it.

Annual spending bonuses

Many credit cards offer valuable rewards when cardholders reach a certain annual spending threshold, and healthcare charges count toward these goals just like any other purchases. Here are some of the major cards that feature threshold bonuses for spending in a calendar year.

Here’s a list of cards that offer bonuses for meeting certain annual spending requirement. Perks range from free hotel nights and airline companion passes to complimentary elite status.

Bottom line

The cost of healthcare is an unwelcome but sometimes inevitable expense. Although some insurance premiums and medical procedures cannot be paid with a credit card, knowing which ones do allow this form of payment can earn you cash back or points toward your next vacation.

For rates and fees of the Blue Business Plus, please click here.    

Featured photo by Allie Smith/Unsplash.

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