Even if you have health insurance, you can still spend thousands out-of-pocket every year on deductibles, co-pays and coinsurance—in addition to your annual premium. My husband and I are both self-employed, and because we pay our own health insurance, we understand the high cost of quality care. For the past two years our insurance rate has increased with each renewal. But ironically we didn’t receive any new benefits. Instead, we lost benefits. It’s frustrating to say the least. But since it doesn’t look like premiums are going down anytime soon, we deal with it and look for ways to keep our costs under control. If this scenario sounds all too familiar, here’s what you can do to save.
Don’t always go with the cheapest health plan
When searching for a health insurance plan, the plan with the lowest monthly premium may immediately catch your eye. Cheaper plans reduce the amount you spend out-of-pocket every month for insurance, which is good for your budget. Just know that plans with the lowest premiums typically have the highest deductibles.
The deductible is the amount you must pay before your insurance company pays a claim. If you have a $2,000 deductible, this is how much you pay out-of-pocket “every” year before your insurer covers certain medical expenses, such as emergency room visits, specialist visits and procedures.
Higher deductible health insurance plans are attractive because of their lower prices, but these plans aren’t right for everyone. They might work if you have enough in savings to cover the deductible, or if you’re young and healthy and don’t visit the doctor often. But if you have a lot of medical problems and you choose a high-deductible plan, you could end up spending thousands before your insurer pays a single claim. And if you don’t have this kind of money lying around, you could end up with large medical debt.
Paying a little more for your health insurance plan (if you can afford it) could possibly reduce your out-of-pocket expense and provide the coverage and care you need. You’ll have a higher monthly payment, but with a lower deductible and additional coverage, you might spend less on healthcare in the long run.
Open a Health Savings Account (HSA)
If you have a high-deductible health insurance plan through your job, talk to your employer to see if you’re eligible to enroll in a health savings account. These accounts are set up through your employer to help cover unreimbursed medical expenses. Funds are deposited into your account through payroll deductions or direct deposit. The money goes into the account tax-free and grows tax-free. Additionally, any unused funds in your account automatically rollover from one year to the next. Some employers even offer a match program where they’ll match your contributions.
Compare costs among different medical facilities
If your doctor refers you to a specific medical facility for a test, don’t feel obligated to have the test completed at this facility. Many health insurance plans have a deductible and coinsurance, so you’ll likely pay a percentage of the cost for medical procedures and tests out-of-pocket. To minimize your expense, call around and compare prices among different facilities within your insurer’s network.
The costs of different tests and procedures vary widely depending on where you go. Your doctor might refer you to a hospital for a particular test, but after some comparison shopping you might find an in-network outpatient center that’ll conduct the same test for a fraction of the cost. If you find one, call your doctor and ask to have your referral sent to this facility.
Shop around for prescriptions
Just as some medical services may be less expensive at one hospital vs another, prescription prices can vary widely depending on which pharmacy you go to. A prescription that costs $90 at one pharmacy might cost $65 at another. Another way to cut costs is to choose generic medications over brand name ones when possible. Or choose cheaper medications when you have multiple options to choose from. For example, there are dozens of insulin alternatives for diabetes patients. It never hurts to ask your doctor to prescribe a more affordable alternative.
With a little research, you can find helpful pricing information online or manufacturer coupons that take the sting off an expensive medication. Plus, take advantage of free online tools like SearchRx that compare prices at pharmacies near you and provide free coupons – especially helpful if your drug isn’t covered by insurance.
Don’t skip screenings and physicals
Some people hate going to the doctor, so they skip annual physicals and routine screenings. However, the longer you put off screenings and physicals, the greater your risk of developing health problems.
The purpose of screenings is to identify possible medical issues early. And with an early diagnosis, you might avoid costly health complications. For example, let’s say you skipped your past four dental appointments resulting in a cavity that went undetected for two years. Ordinarily, a dentist can repair a small cavity easily with a filling. But when a cavity isn’t caught in time and there’s too much decay, your treatment options become more extensive and expensive, and you end up spending more than if you had addressed the problem earlier.
Practicing healthy habits is one of the best ways to minimize healthcare costs. Some health problems are beyond your control, especially genetic or inherited ones. Even so, you’ll be surprised by the number of diseases and conditions you can prevent with simple lifestyle changes. This includes getting adequate sleep, maintaining a healthy body weight, improving eating habits, finding time for regular exercise and giving up bad habits such as smoking.
Exercise and healthy eating can lower your risk of diabetes and reduce your blood pressure, which decreases the risk of heart attack and stroke. In addition, healthier habits improve your immune system which helps your body fight off a variety of illnesses and diseases including the flu and certain cancers. When you stop bad habits, you also reduce the likelihood of causing irreparable damage to vital organs, such as your lungs and heart.
After housing and auto payments, healthcare might be your next big monthly expense. Health insurance is a necessary evil that provides peace of mind and gives you access to quality care. But unfortunately, having coverage doesn’t always protect against additional out-of-pocket expenses. Being a savvy consumer and knowing how to minimize your costs helps you keep more of your hard-earned cash, while maintaining your health.
Are you looking for more ways to save money? Take a look at my tips & tricks to get out of debt & stay that way for more info.