7 Ways to Keep Your Health Care Costs in Check
By Maryalene LaPonsie
It doesn't matter how much you spend on health care; you probably wish you spent less.
Fortunately for consumers today, there are a number of tools and resources available to reduce the cost of medical bills. It starts with picking the best health plan for your family and ends with committing to a healthy lifestyle.
Here are seven ways to help you lower your health care spending and live a healthy life.
Pick the Right Health Insurance Plan
Your health insurance plan is critical when it comes to keeping your health care costs low. But with so many plans on the market, it can be difficult to find the right coverage for your family. When comparing policies, consider the following:
Premium: Often paid monthly, the premium is what you spend to buy the policy.
Deductible: The amount you pay out-of-pocket for care before your policy begins to pay for most medical costs.
Copayments: Usually a flat amount paid per visit or service.
Coinsurance: Represents your portion of the bill, typically assessed as a percentage of the billable amount.
Network: The health care providers and facilities that accept the insurance policy.
Coverage: The care covered by the policy. Some services must be covered by law but others, such as dental and vision, are optional.
If your family expects to have high medical bills, then paying a higher premium in exchange for lower out-of-pocket costs may be a smart choice. If you're relatively healthy, a high-deductible plan with lower premiums could save you money.
Use an HSA with Eligible High-Deductible Plans
Consumers who decide to go with a high-deductible plan should check to see if they are eligible for a health savings account, known as an HSA. Ryan Tiernan, who is the founder of Access Point HSA and helps businesses set up HSAs for employees, says they can be a major source of tax savings.
%VIRTUAL-WSSCourseInline-884%"They are triple tax-free," he says. "Money goes in tax-free, grows tax-free and comes out tax-free [when used for qualified medical expenses]."
Even better, companies that offer HSAs as part of a benefits package often match deposits into an account. "[Many] employers are making some type of match," Tiernan says. "That's a huge win." A June 2014 report from the Employee Benefit Research Institute found that over half of HSAs have employer contributions.
Money deposited into an HSA rolls over each year and can be used tax-free for medical expenses, even if your insurance changes.
Make the Most of Wellness Programs
As employers work to control their health care costs, many are offering wellness programs for their workers. While programs vary, they often give workers a discount on their health insurance premium for doing one or more of the following:
Participating in biometric screenings, such as checking blood pressure and cholesterol levels.
Completing a health risk assessment, usually in the form of a questionnaire.
Enrolling in a physical activity program.
In 2015, employers are expected to dole out $693 an employee in wellness incentives, according to a survey of 121 companies by Fidelity and the National Business Group on Health.
Let a Discount Card Fill the Gaps
Unless you have Cadillac coverage, you'll probably find your health insurance won't cover some services. In that case, a health care discount card might be able to reduce your costs. Not to be confused with insurance, these cards offer reduced rates on services offered by participating providers.
Anyone can get a discount card, and many charge a monthly or annual fee. Allen Erenbaum, president of Consumer Health Alliance, a trade association for discount health care programs, says the cost can be easily recouped through the savings. "You use it as often as you need it," he says.
To get the most value, Erenbaum recommends using the following guidelines before paying for a card.
Check the list of participating providers to see who accepts the card. If a list is not available before buying, that could be a red flag.
Look for plans that allow you to try it for 30 days and get a refund within that period if you're not satisfied.
Review the list of included and excluded services. It should be clear what care is discounted.
Discount cards can be purchased individually or obtained through employers or professional organizations.
Shop Around for the Best Price
Mitch Rothschild, chairman and founder of the health care ratings and reviews site Vitals.com, says consumers can save a significant amount of money simply by changing their health care provider or using a generic prescription.
%VIRTUAL-pullquote-There ought to be an alarm bell that goes off in a patient's mind when you're doing anything other than routine care.%He describes one self-insurer employer who gives employees a $500 rebate if they choose to have a certain procedure done at an outpatient facility rather than a hospital. While the hospital charges $10,000 for the service, the outpatient facility only bills $1,500. To encourage workers to choose the cheaper option, the company shares the savings.
Even if you're not getting a rebate for selecting a less expensive facility, it can still save you money in the form of lower copayments and coinsurance. "There ought to be an alarm bell that goes off in a patient's mind when you're doing anything other than routine care," Rothschild says. That bell should indicate it's best to shop around before selecting where to have a service performed.
Sam Ho, executive vice president and chief medical officer for insurer UnitedHealthcare, notes his company offers the UnitedHealth Premium designation program that evaluates the quality and cost-effectiveness of 250,000 physicians across 27 specialties. Other insurers offer similar information on their websites for members. "Health care quality and costs can vary significantly within a city so consumers should evaluate what resources are available through their health plan to identify high-quality, efficient health care providers," Ho says.
Get Your Free Preventive Care
It's often less expensive to treat minor problems than major medical issues. By taking advantage of your health plan's free preventive services, you may be able to identify potential areas of concern before they balloon into something bigger.
Under the Patient Protection and Affordable Care Act, all health insurance plans must include a number of preventive services free of charge, without any deductible, copay or coinsurance requirements. These free services range from a number of cancer screenings and immunizations to well-woman and well-child visits.
Other preventive care may not be free but still shouldn't be neglected. "Annual check-ups, dental cleanings and routine eye exams can help identify chronic conditions, as well as facilitate necessary follow-up treatments with primary care physicians and specialists," Ho says.
Make Smart Lifestyle Choices
Chronic disease is responsible for 86 percent of the country's health care costs, according to the Centers for Disease Control and Prevention. Many of these conditions are attributable to unhealthy lifestyle choices.
Besides costing money for disease management, chronic conditions can land you in the hospital, which is not the cheapest place to be. "Generally speaking, hospitals are big, inefficient, expensive places," Rothschild says.
In 2012, the average cost for a surgical stay in a U.S. hospital was $21,200, according to the government Agency for Healthcare Research and Quality. Medical stays had an average price tag of $8,500, and maternal and neonatal stays averaged $4,300. However, some procedures can cost significantly more. Governing magazine analyzed government data and found that California hospitals charge an average of $150,000 for a major joint replacement.
You can reduce your chances of developing a chronic condition or needing to be hospitalized by eating a balanced diet, staying active and avoiding risky behaviors.
Health care costs can take a bite out of your budget, but you aren't helpless. Putting these strategies into action can help you lower costs and keep more money in your pocket.
Maryalene LaPonsie is freelance writer who has been reporting on personal finance, retirement, higher education and insurance for more than seven years. You can connect with her on LinkedIn, circle her on Google Plus or check out her personal website at The Mighty Widow.