For most Americans, healthcare is a top personal and financial priority. Unfortunately, provider billing mistakes combined with the skyrocketing cost of healthcare services, health insurance premiums, and prescription drugs can create real financial concerns. The good news is that there are ways to keep your medical bills in check.
- Saving money on medical bills can be done by wisely choosing providers, such as using in-network care providers and asking for discounts.
- Other ways to cut costs include using generic prescriptions and getting mail-order drugs.
- Billing errors can increase your costs as well, thus, it pays to audit your medical bills and establishing a relationship with billing offices.
- Using medical marijuana in lieu of some prescription drugs may save you money.
- Urgent care centers are often less expensive than going to the emergency room of a hospital.
Choosing Providers and Pricing
According to the U.S. Census Bureau, most Americans (nearly 86%) have health insurance coverage to pay for the majority of their healthcare services. However, even if you have health insurance, you can still comparison shop for healthcare just like any other purchase. Here are some tips on how to choose a provider and a price before getting socked with unexpected or larger-than-expected bills.
1. Use In-Network Care Providers
If you have a PPO (preferred provider option) health insurance plan, your insurer will pay for most of the cost (minus your co-pay) when you use a doctor or hospital that is part of the insurance company's preferred network of providers. If you use a doctor or hospital outside the provider network, you will have to pay a larger portion of the bill. PPOs typically pay only up to 70-80% of expenses incurred outside the network.
2. Research Service Costs Online
With Americans having to pay for more of their healthcare costs, third-party health "infomediaries," organizations that advise consumers about treatment and provider options, are coming on the scene.
The approximate prices for medical services are available online from several locations, including consumer websites (such as HealthGrades.com and The Leapfrog Group), individual hospitals and insurance companies, and even the federal government. When you receive a diagnosis or recommendation for a procedure, do a little online research to become a more informed customer.
3. Ask for the Cost
You might be surprised to know that you can ask your doctor to give you an estimated cost for a procedure or service before scheduling an appointment. If the cost is too high for you, an excellent time to negotiate is before your appointment or seek treatment elsewhere. If it is a routine procedure or appointment, it may easy to "shop around" with other local doctors. In addition, you could ask for an installment plan to pay.
4. Ask About Options
Ask your physician if all the recommended tests or procedures are medically necessary, especially if you have to meet a high out-of-pocket deductible or co-pay.
5. Ask for a Discount
It is possible to negotiate a lower price for healthcare services, particularly if you are seeking a procedure or treatment offered by numerous other providers in your area.
6. Seek Out a Local Advocate
Professional healthcare advocates can provide you with information about local care options, help you obtain care, and resolve billing issues with your insurance company and/or healthcare providers.
7. Pay in Cash
While doctors might pull down some impressive yearly incomes, their offices are typically cash-poor. Doctors' offices will frequently discount bills for patients paying cash because it eliminates their need to file insurance claims and pay credit card transaction fees.
Trim Prescription Drug Costs
There are several ways you can save money on prescription drugs:
8. Use Generic Prescriptions
Since the FDA eased restrictions on pharmaceutical companies being able to advertise directly to consumers (called DTC advertising) in 1997, Americans have been bombarded with multi-million-dollar ad campaigns promoting name-brand drugs and treatments. According to Consumer Reports, generic drugs are as effective and safe as name-brand drugs and often cost significantly less.
9. Get Drugs by Mail or From Big-Box Retailers
You can sometimes find prescription drugs at reduced rates at warehouse club stores like Sam's Club even if you're not a member. Several large retail chain stores also offer significant discounts (without health insurance), such as $4 for a 30-day supply or $10 for a 90-day supply on 300-400 popular generic drugs. You can also ask your doctor to recommend a mail-order pharmacy where you can get a larger prescription package (e.g., a three-month supply instead of a typical one-month supply) for less.
10. Ask for an Over-The-Counter (OTC) Alternative
Your doctor or pharmacist can let you know if an OTC drug can treat your symptoms for less money.
The following section will show you how to save by watching for billing errors and working the system.
Always check your medical bill before paying it. Hospitals and medical offices may inadvertently overcharge you.
Watch for Billing Errors
When was the last time you reviewed your medical bills? Up to 80% to 90% of hospital bills are incorrect, according to the advocates for transparent medical billing, like the organization Medliminal.
Reduce the likelihood of paying too much for your medical care by doing the following:
11. Ask for Itemized Bills
The explanation of benefits (EOB) statement you get in the mail does not contain a detailed breakdown of all costs charged to you for services and/or inpatient stay. Specifically, ask for an itemized bill, so you know exactly what you are being charged for.
12. Review Bills for Errors
Make sure that you actually received all of the services, medications, and other items on your bill. If you notice a discrepancy or error, request copies of your medical chart and/or pharmacy ledger so that you can compare the doctor's orders for services on your bill.
13. Ask for Audits of Your Medical Bills
Insurance claim processors can make mistakes resulting in incorrect billing even for services and medications you received. Your healthcare provider's claim managers can review your case and correct any billing errors.
14. Review Your Insurance Coverage
Your health insurance policy manual outlines which charges are "covered" versus "not covered." All covered expenses should be paid for by the health insurance company. The EOB form you receive from your insurance company will note if a service was covered or not.
15. Establish a Relationship With the Billing Office
Most doctors' offices have a professional billing staff or finance department that handles all patient billing questions and concerns and interactions with insurance companies.
If you are having difficulty with your medical bills, schedule an appointment with your doctor's billing office. They should be able to review your bills, explain your health insurance benefits, direct you to other resources to maximize your insurance benefits, and help you obtain less-costly drugs and services.
16. Use a Professional Bill Reviewer
If you just can't make heads or tails of the bills' codes and costs, contact a professional bill reviewer who knows hospital diagnoses and procedure codes and can determine if you have been incorrectly billed or overcharged for the care you received.
Signing up for a health savings account (HSA) or flexible spending account (FSA) are two ways to save money on medical and healthcare costs.
Managing Medical Bills
Reducing your medical bills or restructuring your payment schedule can be fairly simple if you're willing to take an active approach.
17. Negotiate With Your Doctor's Office
You can often get a discount on services simply by asking. In today's increasingly competitive healthcare industry, keeping customers is in a provider's long-term interest. It can't hurt to ask for a discount to get your business.
18. Create a Payment Plan
If you can't pay your bill in full and on time, ask the billing-office staff if they will work with you to create a plan enabling you to make smaller, more manageable payments over an extended period of time.
19. Talk to Your Insurance Company
If you're having trouble paying your medical bills, there may be a different health insurance plan better suited to your needs. Co-pays, deductibles, annual maximums, and other fees can vary significantly between plans.
20. Establish a Health Savings Account
If you have a high-deductible health plan, you should consider opening a health savings account to save for items your health plan won't cover. The money you or your employer contribute to the account is tax-deductible, it grows tax-free, and the money you withdraw from the account is tax-free, too, as long as it goes toward a qualified medical expense.
Ways to Save on Medical Bills FAQs
Can You Claim a Tax Deduction for Medical Expenses?
If you itemize your deductions for a taxable year on Schedule A (Form 1040), Itemized Deductions, it might be possible to deduct medical and dental expenses you paid that year for yourself, your spouse, and even your dependents.
According to the Internal Revenue Service (IRS). "You may deduct only the amount of your total medical expenses that exceed 7.5% of your adjusted gross income. You figure the amount you're allowed to deduct on Schedule A (Form 1040)."
How Much Can You Save on Medical Bills With a Flexible Spending Account?
According to the Federal Flexible Spending Account Program (FSAFEDS) website, an FSA, an account that lets you use pre-tax dollars, may save you on average 30% for your out-of-pocket medical costs.
Can You Save on Medical Bills by Using Urgent Care?
Maybe. It depends on your insurance and how much you have to pay out of pocket for an urgent care visit. However, visiting an urgent care is typically less expensive than going to the ER at a hospital.
Can Medical Marijuana Help You Save on Prescriptions?
A 2016 study released from the University of Georgia found that medical marijuana may lower the need for some prescription drugs like those used to treat depression, nausea, and pain. If you purchase medical marijuana to use in place of prescribed drugs, you might save some money.
Can You Save on Medical Bills by Going Vegan?
A vegan or vegetarian diet is often equated with overall better health, but there is no telling if it would or would not save money on your medical bills. However, one could argue if you are healthier, you may be less likely to develop chronic health problems, and that could lower your costs during your lifetime.
The Bottom Line
By taking the time to familiarize yourself with your insurance benefits, seek discounted services and drugs, review your bills and work closely with your healthcare providers' billing or finance staff, you can manage and even significantly decrease your medical bills.
Health savings accounts can be another way for some people to reduce healthcare costs. Some employers also offer cafeteria plans or flexible spending accounts that can help to offset various medical expenses.