It’s no surprise that health care continues to be a hotly debated issue for many politicians. But it’s not just a political issue. It’s a real pocketbook concern for many American workers and their families. With health insurance premiums rising every year and consumers being expected to pick up more of the final tab, many people are searching for ways to cut medical services and prescription costs.
Annual premiums for employer-sponsored family health coverage increased to $16,351 in 2013, up 4% from 2012, according to the Kaiser Family Foundation/Health Research & Educational Trust 2013 Employer Health Benefits Survey. The survey also found that both workers and employers are paying substantially higher than 10 years earlier, with workers contributing an average of $4,565 in 2013, versus $2,412 in 2003, and employers paying $11,786 in 2013, versus $6,657 in 2003.1
With so many priorities competing for your hard-earned dollar, smart saving tips can matter in every facet of your financial life. Here are seven ways to potentially get better value for your health care dollar and save on medical costs.
1. Seek value-oriented health care solutions.
Even before care is needed, it's often a smart idea to identify health care providers with good track records for quality, cost, and safety. For example, you may find that seeking care from a primary-care physician (PCP) or a high-quality urgent care center rather than an emergency room may be a better way to go. In some cases, an emergency room visit could cost $2,000, while an urgent care facility may cost $200 for essentially the same care—a big difference when it comes to paying the final bill.
Of course, the cost of health care depends in part on what type of health insurance provider you have. Most Americans choose either a health maintenance organization (HMO) or a preferred provider organization (PPO). Less common is a point-of-service (POS) provider. Each has different ways of charging you for such care as emergency room or doctor visits.
Try to proactively identify four types of providers that you will eventually need: a PCP, a specialist (or possibly more than one) for any existing or expected conditions, an urgent care provider, and a full-service hospital. Your doctor and insurance company should be able to help you identify the best potential options for your situation. Be sure to ask for a list of health care providers with the highest quality and safety standards, and ask your insurance company how to achieve the lowest out-of-pocket costs.
2. Communicate with health care providers.
Communicating your objectives for cost control is important no matter what type of plan you are in, but particularly for anyone in a consumer-directed health plan (CDHP) with a high deductible. If you have this type of plan, you should let the provider know that you will be paying for the service yourself, so its representatives can understand your need to control costs. If, in order to minimize costs, your objective is to receive only those health care services that are truly required, then you should explicitly state this before any procedures or services are rendered. For example, if your intention is to receive an annual physical that may not be subject to any co-pay or coinsurance costs, be sure to confirm before the appointment that the provider will bill the procedure as an annual physical and not as some different, higher-cost procedure.
Depending on the type of product or service you need, you may want to ask for:
- A clear description of the diagnosis and proposed care, free of confusing technical jargon
- The benefits and risks of the proposed care, along with its costs
- The benefits, risks, and costs of alternative treatments
- The number of comparable cases the provider handles
- Qualifications of the key personnel involved
- The expected out-of-pocket charges and fees based on the proposed care and your condition, and your health plan
3. Be prepared.
You should be prepared to supply any personal and health-related information required by a provider. You may want to have ready in advance—in writing, if necessary—any questions or concerns that need to be discussed. Being prepared may help reduce the length of a medical visit, help ensure that your needs are addressed in a timely manner, and reduce costs. There can be a big cost difference in getting business done in 15 minutes versus 30 minutes or more. So be sure to ask whether visit time will affect the price.
4. Shop around for lower-cost “elective” care solutions.
It may be a smart idea to seek out lower prices on products and services that have clearly established prices, such as elective care services like vision correction or cosmetic surgery. Since elective care is generally not covered by health insurance plans, shopping around for qualified providers may help to lower your out-of-pocket costs.
Additionally, there may be a number of potential ways to save money on costly prescription drugs. Depending on the condition you have, some prescription drugs can cost up to thousands of dollars per year to fill. Consider the following strategies to help control drug costs:
- Use a generic drug. Insurance plans often charge a higher price for name-brand drugs than for generic drugs. You should review the list of available generic drug options with your doctor to see whether there could be a safe, effective, and lower-cost alternative to any name-brand drugs you are currently using. But also check with your insurance company which generics are covered before asking your doctor to renew a prescription, as the plan's list of approved generics can change over time without a doctor's knowledge.
- Get a 90-day vs. 30-day supply of medications. Longer supplies often have a modest discount. Also, look into preventive vs. nonpreventive drugs. If a drug is classified as preventive, it is often much less expensive than a nonpreventive drug.
- Double-check prices. Don't assume that a health plan's prescription drug distributor offers the best price. Other distributors may offer a better price for the identical drug. You should also check the price of your prescriptions at local retail drug stores.
5. Be creative: Think outside the U.S. box.
It pays to shop around for prescription providers and medical care facilities. In some cases, it may even make sense to broaden your search and consider providers outside the United States if they have a particular specialty that is not as readily available within the U.S.
6. Utilize your network and maximize your health care benefits.
Many health care plans are increasingly rewarding particular behaviors (e.g., healthy eating) and discouraging others (e.g., smoking). The key is to clearly understand the products, services, and providers that are covered at the lowest cost to you, and then consistently choose these over alternative options. At a minimum, you should take some time each year to confirm that your preferred PCP, specialist(s), hospital, dental, and vision care providers are still in your plan's network and that you remain eligible for the highest level of reimbursement.
7. Know your rights.
All people should know their medical rights, including rights to privacy, to access medical records, to have loved ones make decisions for them when they cannot, and to have hospital visits. But there is another set of rights to be aware of:
- The right to know what medical services cost before they are incurred
- The right to select medical care providers
- The right to choose or refuse medical services. Although medical care providers are trained to act in our best medical interests, they do not necessarily act in a patient's best financial interest; it is the patient's right to agree to or refuse services.
- Read Viewpoints: Medicare—What you need to know now.
Fidelity Brokerage Services LLC, Member NYSE, SIPC, 900 Salem Street, Smithfield, RI 02917