Tips for Reducing Healthcare Expenses

Whether you have health insurance with your current employer or you are self-insured, there is no question that healthcare expenses are too much for the average household budget. In fact, according to a 2007 Harvard University study 62% of the personal bankruptcies that occur in the United States are due to unmanageable medical expenses. While this percentage has decreased a bit in the subsequent few years, it is still holding at greater than 50%. Because of this, folks are looking for ways to possibly reduce what they spend on healthcare for themselves and their family. Following are several great tips that may help you in keeping healthcare expenses low.

Insurance Via Your Employer
If you are employed and have insurance through your employer, you should request from your supervisor or Human Resources Department a full outline of all of your health insurance options. In some cases, employees are offered a variety of plans (HMO, PPO, POS) through the same insurance company. Given these three options, HMOs will nearly always end up being the most cost economical. While restrictions apply to HMOs, most people find that this plan more than satisfies all of their healthcare needs and is a plan that is very easy to work with. If you follow all of the rules of an HMO (e.g. obtaining referrals, staying in network, etc.), you will procure the maximum benefit levels allowed by the plan. In fact, you will likely have no out of pocket expense except for your copayment. If you do not have an HMO option via your employer sponsored plan, you should still consult with your plan administrator to determine if there is any way to reduce your monthly premium expense. For instance, if you have a flexible spending account (FSA) or health savings account (HSA) you may be able to pay for your health insurance premiums with pre-tax dollars.

Adjusting Your Deductible
If you are self-employed or have retired early you may have to purchase your own health insurance plan without any employer assistance or subsidy. While you will not get the monetary enhancement that you would with an employer sponsored plan, you will have greater control over the expense and insurance options that you choose for your family. The primary way to keep your plan at a reasonable rate is to maintain a high but manageable deductible. If you are young or fairly healthy, this will prove to be a huge cost savings. For instance, the same insurance plan via a national insurance carrier will cost a 30 year old female $174 per month with a $1,000 annual deductible versus $56 per month with a $5,00 deductible. This is a cost savings of $118 per month or more than $1,400 over the course of one year. You should try to find a sensible balance of premium expense and deductible.

Short Term Plans
If you are temporarily unemployed or an adult college student not eligible for placement on a spouses plan, you should opt for a short term health insurance plan. These policies are very reasonably priced and do provide at least a measure of insurance coverage. At the very least, you will get the insurance carrier discount when seeing a physician. This may mean the difference between paying $75 for an office visit (no insurance) and $57 (insurance plan rate applied). These short term plans are valid for up to 6 months, but may be renewed regularly. As with any other plan, try to find a plan that has a manageable blend of monthly premium expense and annual deductible. There are several online sites that offer short term policies and you can usually know within just a few moments if your application has been approved.

Health Insurance Discount Programs
Most of the major health insurance companies offer to their members a variety of discount programs in an effort to ensure that they remain healthy and have a reduced number of medical claims. For instance, you may receive 15% off of a gym membership, 20% off of mail-order vitamin supplements or 25% off of a weight management program via a national chain. Contact your health insurance company to see what programs they offer to their members. In most cases, you can view that information right on the carrier’s website.

Working With Physicians and Hospitals
If you have no insurance at all or your insurance company has paid very little on a high dollar claim, you should appeal directly to the providers for assistance with the outstanding balance. Do not wait to do this while hoping that the outstanding balance will evaporate or you may risk going to collections. You just need to contact the Office Manager of the physician office or the Patient Accounts Department of the hospital and discuss the matter directly with them. In your discussions, be honest with them and tell them that you are experiencing an economic hardship. In the case of a bill for physician services, they may be willing to discount your bill up to 50%. For hospital bills, depending on your financial situation you may have up to 100% of the bill written off. If you approach these folks with honesty and integrity, they will work with you with regards to your outstanding balance.

Freebies
Both large and small hospitals have health outreach programs for their community and the programs are often free. Services that are offered may include: nutritional counseling, diabetic counseling, exercise programs, pregnancy services, healthy cooking classes, smoking cessation programs, asthma management programs and more. Contact your local hospital to see what they are offering that may be of benefit to you. Also, most of the major health insurance companies have nurses that staff a free hotline for medical inquiries 24 hours a day. They can address questions such as:

• What are the symptoms of sunstroke?
• What is the difference between a sinus infection and the common cold?
• Should I put ice on a sprained ankle?
• What should I do with a colicky infant?

Finally, another great freebie for you is right at your physician’s office. If your insurance plan does not cover medications, or covers them at a very low level, you should take the time to ask your doctor for samples of any medications you take. The pharmaceutical companies regularly provide to physician offices plenty of samples, which the doctor will be happy to share with you.

Whether you are insured, uninsured or underinsured, managing your healthcare expenses can be a real challenge. Using some of these tips should help alleviate some of that burden and ensure that your bank account remains as healthy as you do.