Your health is priceless. Unfortunately, healthcare is not. Debt.com talked to multiple personal finance experts about healthcare costs: what they think you should know, what hacks they’ve learned, how you can pay off medical debt, and more. Here’s what they had to say and how you can use their advice to avoid medical debt.
Why does the average consumer feel “in the dark” when it comes to medical costs?
Part of the medical debt battle is understanding costs before you incur them. Yet, few people actually do. Billy and Akaisha Kaderli of Retire Early Lifestyle explain the thought process:
Billy & Akaisha Kaderli – Retire Early Lifestyle
“They [consumers] don’t pay directly; rather, the insurance company pays. Because of this, they have never had to shop around to get the best deal on a service or procedure. Imagine if you had ‘food insurance.’ Can you guess what the price of apples would be? But you wouldn’t care because your insurance would cover it.”
So, it’s time to start caring about the costs of procedures, even if you think your insurance will cover it. But it isn’t always easy, says Richard Ward of TIAA:
Richard Ward – TIAA
“Medical costs are very hard to pinpoint and are not typically published by medical providers and hospitals – although there is a move toward more price transparency in healthcare. For individuals with excellent health insurance, how much a doctor charges or how much an MRI costs may not affect their choice of care. In these cases, insurance pays the bulk of the cost and there is very little incentive to know how much the services cost. Others may not be as fortunate and have to settle for lower health insurance coverage. These individuals risk running up large medical bills.”
Even with lower health insurance coverage, you have opportunities to take control over what you pay for your healthcare. Start by learning how to openly discuss the costs of your procedures and what you can actually afford.
Talking to your medical providers about costs
It can feel awkward to talk about money with your doctor, but they want to ensure you get the proper care – and part of getting the proper care is being able to pay for it. Here are several things you should discuss before you get treatment.
Ask if all the tests are necessary
Running a variety of tests may be protocol, but it’s also expensive. Ask your doctor if all the diagnostic tests in a set are necessary. There may be some you don’t really need, and then you don’t have to pay for them.
Jan Dubauskas – healthinsurance.com
“Testing can be very expensive, so it’s important to ask the doctor about the tests they are ordering, what they’re for and if it is necessary. By working with the doctor to identify which tests are actually needed, you can save a lot of money.”
Get prices in advance
Before you agree to a procedure, find out exactly what it will cost you. Call your insurance company and discuss prices with the medical office.
“When a doctor asks you, ‘Where should we call in your prescription?’ don’t just choose the closest drugstore; you should look online first to find the best prices.” – Jon Jensen, America's Pharmacy Click To Tweet
Jon Jensen – America’s Pharmacy
“It’s always good to know in advance how much you’re going to pay, whether it’s at the doctor, at the hospital, for medical equipment, or at the pharmacy. I’ve seen prices vary from one pharmacy to the another by 800% for the same drug – at pharmacies that are virtually across the street from each other.”
Once you know prices, you can call other offices or pharmacies to see if they can beat the price.
“For ongoing healthcare expenses, shop around to get the best prices. For example, if you need regular prescriptions, compare the costs across pharmacies. Also, be sure to ask for both cash and insurance prices for both generic and brand. You can either call the pharmacies directly or use a prescription comparison site like GoodRx. Prices can vary dramatically from pharmacy to pharmacy.”
Be open about your situation and what you can afford
Doctors don’t always know how much you pay for treatments. Everyone has different insurance, and if they’re a hospitalist (a physician that works exclusively in a hospital), then the hospital sets prices for them. They are rarely involved in the process.
Additionally, doctors must “code” their services to match procedure listings created by insurance companies. A simple coding change can make a drastic difference in what you’re charged, so call your insurance company ahead of time to find out exactly how your visit should be coded so you can tell the doctor.
Keep all your records
Michael Dinich – Your Money Geek
“One of the best ways to save money on medical costs is to keep a copy of your medical records and take them with you whenever you visit a healthcare provider. Doing so may cut down on diagnostic work.”
With a copy of your medical records in your hand, you can prove you’ve already had certain tests and avoid getting charged for them again.
Know which emergency centers are in-network
“It’s a good idea to make sure you know which doctors, hospitals, and urgent care centers are in-network in your area before you have an emergency,” says Beck. “Also, check whether your insurance plan requires you to call ahead or follow any specific steps. You don’t want to be searching for that type of information while you’re also dealing with a health crisis, so finding the information now could save you a small fortune later.”
Prioritize preventative care
It may seem counterintuitive: Go to more appointments so you can spend less money. But keeping up with regular check-ups and preventive services can save you a lot later on.
“Preventive health care—such as annual check-ups—are usually covered at 100% even if your plan has a deductible. Preventive care is a great way to save money down the road due to early detection,” says Ward.
Dr. Arthur “Abbie” Leibowitz – HealthAdvocate
“By being proactive with your health, you can help avoid more serious and costly issues further down the road.”
How to negotiate your medical costs
If you talk to your medical providers about costs before and procedures, you will hopefully avoid high bills. But if you are stuck with high costs anyway, there are methods of negotiation that can help you pay less.
“Tell the truth, be calm, and work toward a common goal. You want to pay the bill, and the medical office or hospital wants you to pay the bill, so you want the same thing,” Jensen says.
Ask if there are exceptions for self-pay
When a provider knows you’re paying for yourself, they’ll often provide an immediate discount. They would rather you pay what you can than nothing at all, so be honest. Ask if they have a self-pay discount, and if they don’t, ask if they can work something out with you because you’re paying out-of-pocket.
“If you’re paying out of pocket for a procedure, just ask for a discount. Hospitals, doctors and test labs may be sympathetic – or just realistic – when they realize insurance won’t be footing the bill,” says Leibowitz.
Ask about paying in cash
“Once you’ve asked for a discount,” says Jensen, “try to negotiate an additional discount for paying by check and not by credit card. Medical companies pay fees to credit card companies to use their services (often between 3% and 8% of their charge) so if you pay by check, you might be able to get a medical office or hospital to discount those fees for you. It seems small, but it really adds up.”
Ask about payment plans
Many consumers don’t know that, just like with other debts, you can request a payment plan to pay medical bills. “If you can’t pay the whole bill right away, negotiate a payment plan,” says Jensen. “Determine what you can afford and then stick to paying that much each month. No medical company wants you to default on your bill, and neither do you, so a realistic payment plan will keep everyone happy.”
Choosing the right insurance
Your insurance determines how much you’ll pay for every procedure. It’s essential to find the right plan for you, so don’t just sign up for the first one you find. Do your research to find a good balance between monthly premium and coverage. Once you choose a plan, make sure you know how it works.
“Understand health plan coverage. Review and get to know your plan before scheduling appointments or procedures. It’s important to understand what your plan does and doesn’t cover,” says Ward. “For example, some plans include a deductible, which means you may have to pay 100% of the cost up to the amount of the deductible before the plan starts paying. Your plan may also include a preferred provider network which means your insurance company has pre-negotiated lower rates for services. You’ll benefit from the lower negotiated rates as long as your doctor or the facility you go to for services is in your plan’s network. However, if your doctor or the facility is considered out of network, you may end up paying significantly more out of pocket. Some health plans, such as an HMO, include a copay each time you see the doctor or seek urgent/emergency care.”“Copays can add up if you end up seeing the doctor or specialist more than a few times a year. The important thing is to understand how your plan works so there are no surprises when you seek care.” – Richard Ward, TIAA Click To Tweet
Other healthcare accounts
Insurance isn’t the only way to save on your healthcare costs. An FSA or HSA can help you pay with pre-tax dollars.
“You may have the option of contributing to a healthcare Flexible Spending Account (FSA) to pay your out-of-pocket costs with pre-tax dollars. This is an excellent way to pay for your out-of-pocket costs because of FSA tax savings,” says Ward.
“However, it’s important to note that a healthcare FSA is designed primarily to pay for current medical expenses, and you could potentially lose any unspent dollars at the end of the year. After using up your FSA, you may want to consider setting aside funds in a savings or mutual fund account as part of an emergency fund for any unanticipated healthcare expenses.”
“If your health plan is an eligible high deductible plan, you can make a contribution to a Health Savings Account (HSA). An HSA is similar to and often confused with a healthcare FSA. However,” adds Ward, “an HSA can be used to pay for out-of-pocket costs in the current year or you can roll the account forward to use in future years. In other words, you don’t lose it if you don’t use it each year. In some cases, your employer may contribute to an HSA on your behalf if you enroll in the eligible high-deductible health plan. The employer contribution and any contribution you make to an HSA are considered pre-tax. HSAs typically credit interest on the cash portion of your account and most also offer a mutual fund investment account.”
As you can see, there are so many ways to save money on healthcare costs. Not all of them will work for you, but they’re worth trying. The worst you can get is a “no,” but you could save thousands of dollars.
Anthony Martin – Choice Mutual
“Just know that if you don’t pay off the balance that you will eventually get a collection bill on your records.”
Find solutions to deal with medical debt collections.
Article last modified on September 23, 2020. Published by Debt.com, LLC