Just having come off a holiday season full of shopping and gift exchanges, many may be faced with the hangover of expensive bills that come with overspending. What’s also expensive is health care and even with insurance coverage; the cost of treating yet the most basic of conditions can put a sizable dent to one’s wallet.
According to the Centers for Medicare and Medicaid Services (CMS), the United States health care spending increased 4.3 percent to reach $3.3 trillion, or $10,348 per person in 2016. As if starting a New Year paying bills wasn’t sobering enough, it also means restarting a new deductible on your medical insurance plan as well. However, there are opportunities to save money when managing your health care needs. Many are easier than you think and the benefit may be more than you expect.
Start by shopping around. We often don’t think twice when comparing prices for groceries, at department stores, or on-line retailers but doing so for medications and health related services is a common oversight. Take prescription medications for example. Have you called different pharmacies to determine how much it would cost to fill your prescription? Not all pharmacies charge the same, and depending on your insurance plan, these charges can end up being more or less for your medications compared to others. And, if the medication is something you take routinely…choosing the right pharmacy can add additional savings throughout the year.
When choosing insurance coverage, money is lost by choosing the wrong deductible plan. While low deductible plans can offer a higher percentage of payment coverage when services are used (such as doctor visits, hospitalizations, surgeries, etc.), that usually equates to spending more for your coverage up front. Most people choose lower deductible plans thinking they will spend less out of their pocket. The reality is, many do not factor in how much they spend, per paycheck, in premiums versus what is actually used in health care services throughout the year. If you or your family is blessed with overall good health, typically only see a doctor for a routine “check-ups”, and do not have medical conditions requiring continual needs…perhaps you should consider a plan at a higher deductible. The reduced upfront costs, saved paycheck to paycheck, allow you to draw interest on your hard earned money as opposed to paying for additional coverage you may never use.
Also, inquire if your employer offers a Flexible Spending Account (FSA). FSA’s allow you to put aside pre-taxed dollars you can use toward medical expenses. In addition to lowering your taxable income, this allows you a dedicated savings plan to budget medical expenses throughout the year. However, it’s important you use all of the money saved into an FSA before year’s end. Since the Internal Revenue Service (IRS) frowns upon “deferred compensation”, employers cannot provide waivers for any employee regarding funds that might be forfeited. In layman’s terms…IRS rules state any money left in your FSA, not used at the end of the year, cannot be returned. And, since the IRS never got their mitts on this money in the form of taxes…they are going to make sure you don’t get it as well if it’s not used for its intended purpose. So, if your medical needs are fairly predictable, FSA’s are a wise investment for you to manage your costs without over-taxation.
Believe it or not, discounts do exist in the world of health care. From upfront payments to negotiating bill rates, with a little bit of inquiry you might find yourself paying less for simply asking. As with any industry, cash flow and customer loyalty are vital to a successful business. Many, if not most hospitals, offer sizable discounts for paying your portion of a bill at the point of service. Hospitals and physician offices want to keep patients who are loyal and timely with payments so ask about discounts anytime you need a procedure or require services at their respective facility. You just might be surprised of the possible rewards available to you in making this effort. It never hurts to ask.
Lastly, ALWAYS check your bill. Humans, mixed with computers, can be prone to errors. Just as in checking store receipts to insure you were charged correctly, the same must be done with your medical bills. Upon receiving a bill, look it over before you write that check or fork over the cash. Incorrect data can lead to costly errors. Review items such as dates of service, your insurance information, or any duplicate items on the bill. If something stands out, looks out of the ordinary, or you simply need clarification; contact the provider to answer any questions you might have.
Don’t let medical expenses get the better of you. Taking advantage of the opportunities you can control to better manage your money to start the year off right and beyond.