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5 Ways To Reduce Medical Costs

5 Ways To Reduce Medical Costs

Your health is important – and so is your bank account.

With health care costs straining the wallets of the average American household, and employers trimming coverage and shifting the responsibility to employees, it may be time to try your own personal health care reform. Below are 5 ways individuals and families can potentially reduce medical costs.

Find The Cheapest Best Health Insurance Plan

For obvious reasons, people focus strictly on the premium when considering how much health insurance will cost them. Health insurance premiums and other costs can vary greatly between plans and insurance carriers. The least expensive health plan is not necessarily the plan with the lowest premium, but rather the plan which has the lowest premium for the benefits you’ll actually use. All too often people focus on the monthly premium without considering what benefits are covered, and find themselves paying more in out-of-pocket expenses because the plan did not cover services they needed. Start by understanding the basics of what your current and future health care needs are. Will you need to see specific doctors or providers? Will you need specific care, such as Chiropractic care? Consider how often you and your family members go to the doctor each year and the routine prescriptions you require.

Finding a health plan that is tailored to your family’s needs, even though it may not have the lowest monthly premium, could end up saving you money in the long run.

Get The Best Price On Prescriptions

According to the U.S. Food and Drug Administration, the average cost of a generic drug is 80 to 85 percent lower than the brand-name equivalent. If you take a brand-name medication, ask your doctor if there is a generic version. If you have to take the brand name for one reason or another, there are a few ways you can potentially trim the costs:

  • Medication prices can vary by brand. Take a copy of your health plan’s formulary (list of covered medications) and ask your doctor to prescribe a more affordable option from the list.
  • For more expensive brand name drugs, manufacturers will often offer coupons or discount cards. Call the manufacturer or check their website to see if any discounts are available for the medication you are taking.
  • Shop around at different pharmacies. Insurance carriers will often have contracts with specific pharmacies and offer their members discounted rates for using that pharmacy.
  • Use online tools to compare drug prices at your local pharmacies.

Negotiate Your Hospital Bill

Medical bills tend to be eminently negotiable. You can reduce medical costs by negotiating a lower cost upfront or even after you receive your bill. If you’re contemplating a planned procedure, shop around to determine the prices of hospital procedures in your area. This will give you an idea of what the procedure cost, plus give you some leverage with your hospital if the quoted price is much higher than at other hospitals.

Use Flexible Spending Accounts (FSA) or Health Savings Accounts (HSA)

Depending on the type of insurance plan you have, you may be able to take advantage of Flexible Spending Accounts (FSA) or Health Savings Accounts (HSA). Both allow you to put tax-deductible dollars into an account that can be used to pay for qualified medical expenses such as co-pays, deductibles and prescription medications. The money in HSAs roll over year-to-year, while FSA funds must be used by the end of the designated year or else you lose them. Using these accounts are effective ways to save for future medical expenses. The 2014 maximum contribution limit for FSAs is $2,500. For HSAs, the limits are $3,300/$6,550 for individual/family plans respectively. The IRS allows a “catch-up” contribution of an extra $1,000 if you are age 55 and over. See the HSA contribution limits for 2015.

Check Your Bills

Have you ever wondered if that suspicious charge on your medical bill is a mistake? It probably is. Stephen Parente, a professor of health finance and insurance at the University of Minnesota, said his research found that up to 40% of claims statements have errors. There are other reports stating that number is actually closer to 80%. Whatever the number, the important thing to understand is medical bills tend to contain errors, and because of the complexity, most people assume their bill is accurate without checking it.

Prior to having a procedure done, get the “medical billing codes” and confirm the cost of the procedure and how much will be covered by the carrier. Afterwards, confirm the codes and charges match up with what you were told, and that you weren’t “over coded”.

If you had a procedure done, ask for an itemized report of the charges if one is not already included with your bill. Confirm dates and times are correct. Were you charged for the correct procedures? Were any other miscellaneous charges added?

With your next medical bill, remove the complexity by pretending the bill is one you would get after eating out at a restaurant. Confirm everything you ordered is accurate and make sure the bill doesn’t include an extra drink or appetizer.