U.S. News & World Reports: 8 Strategies for Saving Money on Your Health Care
When you sign up for your health insurance benefits during your annual open enrollment, do you automatically opt for the plan you had the previous year? If your doctor writes you a prescription, do you buy it without asking if there are less expensive and equally effective options? Do you agree to whatever tests your doctor recommends, without asking if you really need the exam or whether a less pricey option would be just as good?
Many consumers would likely answer “yes” to at least one if not all of these questions, says Kim Buckey, vice president of client services for DirectPath, a company that provides personalized health benefits education and enrollment services to large employers. Through employers, DirectPath also provides transparency services to individual health care consumers; this includes, for example, cost-comparison reports for medical procedures and treatments.
Many U.S. workers don’t fully understand their health care benefits and therefore by rote choose whatever plan they had the previous year, Buckey says. The 2017 Aflac Workforces Report, which surveyed 5,000 employees nationwide, found that 92 percent of workers choose the same health benefits year after year. The survey also found that 63 percent of employees spent less than one hour researching their benefits options during their last enrollment. Overall, 74 percent of employees said they didn’t understand some aspects of their health plans.
A high percentage of employees choose the same health plan year after year because “they’re familiar with it, it’s easy [and] they don’t have to think about it,” Buckey says. “It’s about having a comfort level.” Some workers feel overwhelmed and believe they haven’t been provided enough easily understandable information to make informed choices, she says.
Many people aren’t aware that they can save money on their health care, Buckey says. In a 2018 survey of 424 consumers who use DirectPath’s transparency services, 46 percent said they were “extremely surprised” at how costs can vary for the same medical procedure, and another 36 percent were “somewhat surprised.” But with some effort, consumers can make choices that will help them get the most out of their health benefits and potentially save hundreds or thousands of dollars. “There are absolutely lots of things a health care consumer can do to make sure he or she is using [his or her] health care plan to its full advantage and getting quality care at an affordable cost,” Buckey says.
Here are eight strategies for getting the most from your health care coverage:
- Consider starting a health savings account.If you’re enrolled in a high-deductible health plan, it would be a good idea to open a health savings account, Buckey says. A high-deductible health plan is defined by the Internal Revenue Service as any plan with a deductible of at least $1,350 for an individual or $2,700 for a family. Only people enrolled in HDHPs are eligible to open HSAs, and it’s pretty important they do so, Buckey says. HSAs can help you pay for medical and dental expenses not covered by insurance. These accounts also help you save on your taxes, because the amount you contribute to your HSA is exempt from taxes, Buckey notes. Many health care plans offer HSAs, which you can set up during open enrollment. You choose the amount you want to put into your account, and the funds are deducted from your paycheck throughout the year; employers also contribute in some plans. You can use HSA funds for a wide array of expenses not covered by your insurance, such as acupuncture, birth control pills, breast pumps and supplies, eye exams, lab fees, massage therapy, a weight-loss programand psychotherapy, according to hsacenter.com. Some plans may not cover certain expenses, such as office visits for preventive care or appointments with only a copay. The HSA contribution limit is $3,450 for an individual or $6,850 for families. There’s no “use it or lose it” component to HSAs; if you have money left in your account at the end of the year, it rolls over into the following year, Buckey says.
- Think about a flexible spending account.Flexible spending accounts are similar to HSAs, with a couple of notable differences. As with HSAs, you can use FSA funds for a wide variety of health-related services and goods, Buckey says. The annual limit for FSA contributions is $2,650, and your contributions aren’t taxed. Some FSA plans allow you to rollover up to $500 of unused funds into the following year, and some plans require you to use all the funds during the calendar year, while others allow you to claim FSA money into mid-March of the following year.
- Let your doctors know about your capacity to pay. You, the patient, should make sure your physicians know your ability to afford medical products and services, says Sarah Haflett, a director at the Health Research Institute at PwC, a global professional services firm. Whether it’s a medical procedure or prescription medication, “many [physicians] are willing to find suitable and more financially-friendly alternatives to help patients find financing options that work for them,” Haflett says. In a clinician survey HRI conducted in the spring of 2017, 82 percent of responding physicians and nurse practitionerssaid the topic of cost was raised by patients in less than half of the appointments they conducted in a typical week.
- Question your physicians. You’ve probably heard the advice that it’s best to “follow doctor’s orders.”That’s generally true, but you can save money without compromising your health care by asking your physician whether certain tests or procedures are necessary, says Dr. Richard L. Seidman, chief medical officer at L.A. Care Health Plan, the largest publicly operated health plan in the country with 2 million members. For example, if your doctor says you need an MRI, you can ask what the risk of delaying an imaging study altogether might be. Be aware that the costs of an MRI and other procedures can vary even within the same insurance network. “Ask about the prices of procedures and whether there’s an alternative,” Seidman says. “Ask about discounts if you’re paying cash.”
- Comparison shop. As with other goods and services, you should comparison shop for medical procedures and prescription drugs. “If you have an employer plan, there will likely be options,” Seidman says. “Take a look at the costs of the PPO [preferred provider organization] plan and compare it to what the managed care plan is offering. By doing a little research, you can determine which plan is right for you. An HMO will generally come at a lower cost but will offer less flexibility. Still, it might be right for you.” Consumers can also save money by comparison shopping for prescription drugs, says Joseph Sanginiti, president and chief executive officer at FamilyWize, a community organization based in Bethlehem, Pennsylvania, that offers a free prescription savings program. Consumers can use the FamilyWize discount card at all major chain pharmacies nationwide; the program covers all Food and Drug Administration-approved medications. The FDA says the cost of a generic drug is 80 to 85 percent lower than its name-brand counterpart, Sanginiti notes. Consumers who join FamilyWize save an average of 45 percent each month on prescription medication, regardless of their insurance coverage, he says. You can also save money by talking to pharmacistsdirectly. “Always talk to your pharmacist,” Sanginiti says. “Don’t be afraid to comparison shop and tell them if you find a better price. They should be willing to work with you.”
- Use health care decision tools. You can use online comparison resources, like the Healthcare Bluebook, which has an online tool that allows you to compare the prices of medical services and procedures by ZIP code, says Chad Wilkins, president of HSA Bank in Sheboygan, Wisconsin. There’s also online resources, like WellRx.com, that allow you to shop for the lowest-priced prescription drugs by address or ZIP code.
- Check your bill. Don’t assume your hospital or doctor’s bill is error-free, says Alexander Gaffney, a senior manager with HRI. He notes that the American Medical Association has estimated the error rate for paid medical claims was 7.1 percent in 2013. Groups that advocate for patients estimate the error rate is much higher. You can hire a medical billing advocate to check your bills, file appeals for denied medical claims and perform similar services for about $75 to $200 an hour. Some will charge by the percentage of savings, from about 15 to 35 percent. Before you hire a medical billing advocate, check whether your employer offers these services for free as part of your health benefits package, Gaffney says.
- Prepare yourself and your loved ones for end-of-life care preferences. Execute an advanced directive and ask your doctor to complete a “Physician Orders for Life Sustaining Treatment” form. The document, which is signed by the patient and his or her doctor, nurse practitioner or physician’s assistant, is used in more than 40 states. It documents your preferences for the level of treatment you want if you can no longer speak for yourself. “If you have a serious chronic or terminal condition, ask your doctor or health plan about palliative care and hospice services,” Seidman says. “Early palliative care can save money by reducing a patient’s time in the hospital and benefit the patient in other ways.” A study published in 2015 in the Journal of Clinical Oncology found that early consultation during hospital admission is associated with lower hospital costs for patients who are admitted with an advanced cancer diagnosis. Researchers collected data for 969 patients who were admitted to five U.S. hospitals from 2007 to 2011. Overall, 256 of these patients were seen by a palliative careconsultation team, and 713 received only the usual care. Patients who had a palliative care consultation within two days reduced their costs by an estimated $2,280 per patient, and those who had the intervention within six days reduced their costs by an estimated $1,312 each, according to the study. “Earlier palliative care consultation during hospital admission is associated with lower cost of hospital stay for patients admitted with an advanced cancer diagnosis,” researchers wrote. These reductions were the equivalent of savings of 24 and 14 percent, respectively, according to the study.
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(Ruben Castaneda is a Health & Wellness reporter at U.S. News. He previously covered the crime beat in Washington, D.C. and state and federal courts in suburban Maryland, and he’s the author of the book “S Street Rising: Crack, Murder and Redemption in D.C.”)