5 Ways to Cut Your Health Care Costs

Douglas Hanna

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A recent survey showed that 22 percent of Americans considered health care to be the single most critical issue facing the U. S. today. And for good reason. Since 2000, health-care costs have nearly doubled, rising at five times the rate of salary increases.

The good news is that there are things that families can do to lower those costs.

Sign up for an HMO

If yours is a healthy family that only uses a lot of routine care, you can probably get by with a Health Maintenance Organization (HMO) plan, if such a plan is available at your workplace. If you use doctors within the HMO network, you probably won’t have to pay and deductibles and your co-pays will most likely be lower.

Pay less for medications

One area where you might be able to trim health-care costs is in medications. Many employers are offering financial incentives to encourage the use of less expensive drugs. In fact, nearly nine out of 10 workers are now in some kind of a plan that has a tiered cost-sharing formula for medicines.

The way these work is that there is one co-payment for generic drugs. Then, there is usually higher co-pay for preferred, brand name drugs such as Claritan or Levatol for which there is no generic substitute, and even higher co-pays for non-preferred drugs.

Be sure to always check with your doctor or pharmacist to see if there is a generic substitute before filling a prescription. Generics generally cost 30 to 70 percent less than brand-name drugs with an average co-pay of just $10 vs. $33 for a brand name, non-preferred drug. If there is no generic equivalent to the drug you have been prescribed, ask your insurer or company HR department if there is a substitute drug that would cost less under your health plan.

Take advantage of a Flexible Spending Account (FSA)

An FSA allows you to deduct money pretax from your paycheck to cover out-of-pocket medical expenses. The good news has gotten even better, too, as the list of expenses you can pay using FSA dollars has been expanded dramatically. In fact, the list now includes most over-the-counter drugs, and new services that make it easier to spend down your account. Yet, despite all the many benefits of FSAs, only about 20 percent of eligible employees current take advantage of them.

While contributions vary by employer, you can often contribute as much as $5,000 per year. Given this, you’ll save as much as 30 percent on your Federal Income Tax. Naturally, this will vary depending on your tax bracket.

You can use FSA dollars to pay insurance deductibles and co-pays, and for such un-reimbursed expenses as acupuncture, contact lenses, flu shots and LASIC surgery. You can find a list of eligible items at www.irs. gov.

Be sure to ask your HR department about the availability of an FSA. You can only elect to contribute to an FSA for a particular calendar year during an open enrollment benefits time or if you’ve had a life-altering event, such a marriage or the birth of a child.

Fight overcharges

Nobody’s perfect, including doctors and hospital billing departments. Billing overcharges can occur and they cost you literally thousands of dollars.

Consider the case of one patient who received a bill for $15,333 for 49 vials of Pepcid. The correct amount: $317. Typos like this can happen and, as you can see, can be very costly.

Keep a list of all any lab tests, medications, procedures and specialists seen during an illness. Then, do not pay any bills until you see itemized statements. Check these statements against the list you kept to spot common errors such as incorrect dates of service and duplicate or incorrect orders for medication. In the event you find an error, call the hospital’s or doctor’s billing department and your insurance company to get the mistake corrected.

Play Let’s make a deal

While this may sound over the top, it is sometimes possible to negotiate lower prices. Some employees have found they were able to bargain with their pharmacists. Other employees, although fewer in number, have suc- cessfully played “let’s make a deal" with doctors, dentists and hospitals. In fact, this can be surprisingly successful, as patients who have negotiated have nabbed a lower fee in about half of all cases.

Naturally, you won’t want to try to negotiate emergency care but you may be able to save money on expensive services such as orthodontia or LASIK surgery.

Where can you negotiate most successfully? Try young doctors who are just starting a practice or doctors with whom you have a long history. Before you start any negotiation, call your insurance company and see what it considers to be a reasonable and customary charge for the procedure. Then try to get your doctor to limit his or her bill to that amount – as the providers’ prices often run 25 to 50 percent higher than what the insurance company would pay If possible, offer to pay part of your bill in cash.

Cutting the cost of your health care is not easy. But if you’re willing to do the work and check out all available options, you just might be able to take a scalpel to them.

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