Healthcare is a major burden for Americans of all ages. From health insurance premiums to doctor and emergency room visits to prescription costs, the price of medical care has skyrocketed over the years, and workers and retirees alike are feeling the pain. Case in point: A good 25% of U.S. adults struggle to pay their medical bills, and medical debt is the No. 1 source of personal bankruptcy filings in the country.
If your goal is to save money on healthcare, then you'll need to attack the problem from multiple angles. Here's how.
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1. Shop around for better insurance
When it comes to health coverage, you tend to get what you pay for. Now, if you're the type who rarely gets sick, it often pays to buy a plan with a lower monthly premium and higher deductible. But if you tend to use your insurance a lot, a lower deductible might be the way to go. There's also the coverage itself to consider. Paying a little more money in premium costs could buy you a superior range of coverage, which could then end up saving you on out-of-pocket expenses during the year.
It's helpful to shop around for insurance, especially if you're buying it yourself on the open market, because there may be a plan out there that better suits your needs and lowers your total costs. The same holds true if your employer offers a plan with multiple tiers. Either way, don't assume that cheaper is better when it comes to health insurance, because less expensive plans often cost you in other ways.
2. Lower your prescription costs
If you take prescription drugs, you may have some options for keeping their costs to a minimum. For one thing, always ask your provider to prescribe a generic. An estimated 90% of generic drug copays cost less than $20, compared to just 39% of brand-name copays. Furthermore, if it's a drug you take regularly, see about ordering 90-day supplies as opposed to renewing your prescription in 30-day increments. Some plans offer a huge discount for ordering pills in bulk.
3. Examine your medical bills
Medical offices aren't perfect, and sometimes all it takes is an improper procedure code for you to get stuck with a healthcare bill that's higher than it needs to be. That's why it's crucial to review all health-related charges you receive prior to paying your bills. Along these lines, if your insurance company refuses to pay for a service it's covered before, it's always smart to follow up and ask why. Often, claims get rejected due to improper coding, so do a little digging before busting out your checkbook.
4. Understand your health benefits
It's estimated that only 52% of workers really understand their health benefits. If you have questions about what your plan does and doesn't cover, dial the number on the back of your insurance card and ask someone -- that's what those representatives are there for.
Imagine you need a procedure that requires preauthorization. If you fail to take that step and go forward with it, you might wind up with a sizable bill. Similarly, if you accidentally see a provider who is considered out of network, you could end up paying far more for that service than you would for an in-network provider. Spending some time to review your benefits could save you a bundle, so it's a worthwhile investment.
5. Get ahead of health issues before they escalate
Whether due to being busy or a desire to avoid that pesky copay, how many times have you skipped out on going to the doctor upon first getting sick, only to cave several days later when your symptoms got worse? It happens pretty often. In fact, 20% of Americans admit that they're able to avoid high medical costs, at least initially, by not seeking treatment. The problem with this approach, however, is that if you ignore medical issues, they can often become costlier to address later on.
Imagine you come down with a bad cough that gives you grief for days, yet you ignore it and stay away from the doctor. If it evolves into pneumonia and you wind up in the hospital for it, you might pay thousands of dollars for that stay, as opposed to the $35 copay your doctor's office would've charged. Though there's no need to run to the doctor every time you sneeze or sniffle, don't neglect more serious health issues. You'll prolong your misery, and very possibly could cost yourself more money in the long run.
6. Open a flexible spending account
If you work for a company that offers a flexible spending account (FSA), signing up could save you money. The reason? FSA dollars go in tax-free, and for the current year, you can contribute up to $2,650 to pay for things like in-office copays, prescription drugs, and eyeglasses. The only caveat is that if you overestimate your out-of-pocket costs and contribute too much to your FSA, you risk forfeiting your balance. But if you're smart about how much you put into that account, you could slash your medical spending for the year via that tax break.
Imagine your effective tax rate is 25%, and you contribute $2,000 to your FSA. Doing so will put $500 back into your pocket -- and that's a decent saving.
7. Sign up for a health savings account
If you have a high-deductible insurance plan, you might be eligible for a health savings account, or HSA. Like an FSA, the money you contribute goes in pre-tax, and you can use it to pay for qualifying medical expenses. But when you're not using that money, you get to invest it, thus growing that sum. Unlike FSAs, you can roll over your HSA balance from year to year, and the current annual contribution limits are much higher than that of an FSA: $3,450 for individuals and $6,900 for family coverage.
Saving money on healthcare can alleviate a lot of the financial stress so many Americans experience. So follow these tips to lower your medical costs -- your budget and health depend on it.
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