How to Budget for Elective Surgeries

Susie Valentine
Oct 6, 2021

Reclaim your health with us! This article discusses how to budget for elective surgeries and covers helpful information about medical bills including:

  • What is an elective surgery?
  • How should you plan an elective surgery?
  • How much can you expect to pay for an elective surgery?
  • How can you budget for an elective surgery?


Anytime that surgery is in your healthcare plan, it can be a difficult event to process - physically, emotionally and even financially. Surgeries are not all classified the same way, even if having a surgery would dramatically change your health profile.


So what makes a surgery an elective surgery? Any surgery that is not considered an emergency or critically urgent. Typically these surgeries require planning and preparation, and the patient is encouraged to do both with their PCP and the specialist performing the surgery. Some examples of elective surgeries include the following: a tonsillectomy; a knee replacement; a hip replacement; spinal surgery. The most common elective surgeries include adenoidectomy, breast augmentations, spinal fusions, knee replacements, hip replacements, cataract surgery, ballooning to unclog arteries of the heart, angioplasty, and hernia repair. This list of common surgeries includes surgeries that can be considered completely optional (breast augmentation) and surgeries which seem critical to a continued healthy life (ballooning to unclog arteries or cataract surgery). An elective surgery is any surgery where you would have the opportunity to have it to improve the quality of your life and health, but you can decline to have the surgery as it is not critical. In other words, your life will not be threatened if you do not have the surgery. However in the case of a hip replacement surgery, delaying the surgery would often cause significant prolonged pain or a lower quality of life. So while it technically is an elective surgery and foregoing it would not be life-threatening, it would be considered a health setback by many to not have the surgery.


How much will my elective surgery cost?


There is no one correct answer for how much your elective surgery will cost. Elective surgeries are varied, and as a result vary quite significantly in costs. Additionally, the amount for which you are financially responsible depends heavily on your insurance coverage, including your specific plan, your annual deductible amount, and your co-insurance amounts. It’s also relevant if you’ve already had another procedure.


If you are having an elective surgery and you are covered by Medicare, your financial responsibility is always the same. Medicare pays an 80/20 split; Medicare will always pay for 80% of the cost of your elective surgery, and you have to pay for the remaining 20% of the cost. This coverage level falls under Part B coinsurance regarding any outpatient elective surgery. It’s important to discuss with your doctor or specialist whether your surgery is in fact considered elective and would be covered under Part B. For example, open heart surgery would be covered by Part A, and is not considered an elective surgery. Any consults with your doctor leading up to the surgery would be covered by Part B.


If you have a Medicare Advantage plan or supplemental plan, the cost will be different depending on the robustness of your plan. 


There are a couple ways where you can get a sense for how much an elective surgery will cost and how much of the cost will be your responsibility. Larger insurance companies will let the doctors put in an estimate or “demi-claim,” just like when you take your car into a mechanic for repairs.  You can get an idea of what your cost-share is going to be and pay some of it upfront if you like. Another good option would be to call member services of your insurance company and ask how much of your annual deductible you’ve met. Whatever portion of your annual deductible is not met, will be what you can expect to pay out of pocket for the elective surgery. 


If you have Medicare for your health insurance coverage, it will always be an 80/20 split of the cost of the elective surgery. There will never be an additional out of pocket expense.


What is the best way to budget and plan for an elective surgery?


If you have been planning for an elective surgery, you can explore saving for it ahead of time. If you don’t have pre-tax dollar options for savings, you can start putting away money in a regular savings account. If a pre-tax dollar option such as an FSA is available to you, we recommend putting away your pretax dollars into your FSA to budget for the procedure. If you schedule it for October, you can start budgeting for it months prior. While you will want to plan for this surgery ahead of time in order to potentially set aside funds to pay for your portion of the surgery, you often cannot schedule elective surgeries too far in advance. All of your pre-operation blood work needs to stay valid.


The next step is to schedule your surgery. When is the best time of year to have an elective surgery? There are many considerations. First, if you are still working, you should prioritize when you can reasonably take vacation time to have the surgery and properly recover. Let’s say you need a laparoscopic surgery, you typically can expect your return to work period to be about two weeks, so you can plan it around your vacation.  If work is not a consideration, then you can be more strategic about your decision in terms of healthcare coverage. If you want to be the most strategic, then the fourth quarter of the year, or the last three months of the calendar year, is often the best financial option, because you have likely used up most of your insurance deductible and would therefore be required to pay less of the cost of the surgery. However, this time of year is typically a high demand time for most providers. 


For all you Snowbirds out there who have the wonderful option of spending a portion of the year in warmer climates, you’ll need to keep in mind that you cannot have your elective surgeries out of your geographic area because your Medicare plan may not be offered there. It’s best to delay your warm-weather option and have the elective surgery at home, where your Medicare plan will pay for 80% of the cost. 


Your Elective Surgery Bill


You will get a bill from the surgeon, which will include the cost of the surgery and any necessary follow up to ensure you have recovered properly from the elective surgery  (this will include follow-up to make sure you’re OK after the surgery). You will likely also receive bills for the following: 

  • The labs for pre-work 
  • Facility use from the hospital for the facility use
  • Any additional personnel or specialists for providing a specific service (for example, a radiologist reading your lab results).


If you have any questions on a bill that arrives, call your insurance company to better understand your financial responsibility.