Stop waiting for the government. Use these tips to save on medical costs and take back control of health care.
Medical costs are a budget killer! Not only are medical costs rising faster than paychecks but they account for one of the biggest expenses on your budget.
What’s worse is that healthcare costs can wipe out your savings or push you into a financial emergency. More than half of Americans report not having enough to pay for a $500 emergency expense…way under the average $8,000 annual deductible for a family health plan.
Top it all off with the fact that you’re probably paying more than you should for healthcare and it’s enough to piss off Mother Teresa!
The U.S. Census Bureau reports that 86% of Americans have health insurance but are paying more out-of-pocket than they should.
Saving on medical costs goes way beyond just staying healthy. Knowing the top tips to cut your medical bills will help you save thousands a year AND stay healthy!
Saving on Medical Costs at the Doctor’s Office
I’m not anti-doctor and I believe they should be paid every penny of what they earn but the system is set up in a way that doctors are rewarded for over-medicating and recommending way more than what you actually need.
The fact that insurance is there to pick up the costs creates a conflict for doctors. Sure, you might not really need all those tests but why not? It’s the billion-dollar insurance companies paying for it.
The problem is, besides the fact that it also increases your out-of-pocket costs, is that the insurance companies then raise their premiums to pay for the medication nation!
1) Ask your doctor about all options and costs. Fighting this conflict means asking your doctor if all the treatments and tests are necessary and whether they will actually help. Ask about alternative options that are just as effective.
2) Ask for a discount if you pay in cash. Even after insurance payments, doctors have to manage their own patient billing and sometimes don’t get paid. They love cash and will sometimes give you a discount.
3) Use an in-network provider and look for insurance with a large network. Preferred Provider Options (PPO) are special deals insurance companies have set up with doctors. In exchange for more patients, the doctors cut the carriers a break on the price and that means savings for you as well.
Go outside this network of providers and you could be looking at paying as much as 30% of the bill and a higher co-pay.
4) Shop around for medical care, even within in-network providers. Nobody likes to negotiate, especially for medical care, but you can actually get a really good deal if you shop around. Doctors aren’t used to negotiating on costs so they aren’t very good at it.
Besides shopping around for your primary provider, you can also ask for an estimate of costs before committing to individual procedures and treatments.
Saving on Prescription Costs
Prescriptions can account for as much as 15% of medical costs according to the Census and much more for patients on expensive drug therapies. This is one of the worst parts of medical care (AGAIN) because of that conflict.
Doctors are heavily lobbied by drug companies to prescribe their treatments, even if there is a cheaper alternative. That means it’s on you to take charge and lower your medical costs.
5) Ask for generics and don’t be afraid to order online. Generics are the same drug but after it has come off patent protection and can be made by a different company but at a price that’s as much as 65% discounted. Sometimes, the same company will make the branded drug and the generic.
The drug industry is big money, where do you think all that money comes from?
Even if there’s not a generic equivalent of your prescription, ordering online through a mail-order pharmacy like YouDrugStore can cut your prescription bill in half. The pharmacy is fully-licensed and sources all its medications within Canada where prices are lower.
6) Get a 90-day supply of medications. Ordering a larger supply of medications can usually get you a discount of 10% or more. You may have to ask your doctor to write up a larger prescription but it will save you hundreds a year.
7) Ask for medication samples from your doctor. Remember all that lobbying drug companies do with doctors? A lot of times that will include giving them free samples of medications.
It might not mean a big savings but it all adds up, especially on those expensive branded drugs. Each tablet of Nexium costs up to $16 from U.S. pharmacies, although it’s less than a quarter the price when you go online.
8) Ask your doctor about OTC alternatives for prescriptions. Doctors are PAID to prescribe but they have a moral duty to tell you the truth when you ask them. For every medication prescribed, ask if there is an over-the-counter alternative and what you can do to lower your dosage.
How to Pay Off Hospital Bills
Government Accountability Office (GAO) reports that nine out of ten hospital bills contain a billing error. Insurance companies lose 10% a year to fraud from providers and patients pick up a billion-dollar tab.
9) Ask for an itemized bill that lists everything. The typical explanation of benefits you get from providers rarely explains things in regular language and almost always lumps services together. That means it’s easy to miss something added to your bill incorrectly.
Look over each item in your bill and ask questions if you don’t know what something is or think it’s an error.
10) Ask the insurance provider to review your bill. It’s in the insurance company’s interest to make sure you’re not being over-charged as well.
11) Ask about the interest rate on your account and consider a consolidation loan. If you can’t pay off your medical bill in cash, the doctor will put you on a payment plan. I’ve found that they rarely explain the interest rate on these and people just don’t think to ask.
That means the interest rate on medical accounts can be shockingly high, even higher than credit cards.
Instead of carrying a balance and paying the interest, consider using a personal loan to pay off the debt. You can borrow enough to pay off other high-interest debts at the same time and save thousands in interest.
Should I Pay Medical Bills with HSA?
A health savings account (HSA) can be one of your best tools to save on medical costs. It’s a savings account specifically for healthcare expenses. You put money in before taxes and it grows tax-free as long as you use it for medical costs.
The only qualification is that you need to have a high-deductible health plan (HDHP) for health insurance. That means your deductibles are going to be at least $1,350 for an individual or $2,700 for a family.
An HDHP is actually another (BONUS!) way to save money on medical costs. Since most people rarely use their health insurance, it makes sense to cut the monthly premiums as low as possible. Monthly insurance premiums are the biggest chunk of most households’ medical costs but enrolling in a high-deductible plan will help lower those costs.
Health care should not be as expensive as it is but that’s the world we live in. Maybe the government will get around to changing it…someday. Until then, you can save on medical costs by following these steps. Your health and your wallet will thank you!
About the Author
Joseph Hogue is a financial expert and investment analyst. After serving in the Marine Corps, he started his career investing in real estate before becoming an investment analyst for some of the largest private investors. He's appeared on Bloomberg and on CNBC as an investment expert and has published ten books in personal finance. Now he helps investors reach their financial goals and invest in the stock market with some of the same advice he used when working for the rich.