How to Save on Health Care Costs

The average American spends more than $10,000 per person annually on healthcare expenses, including premiums, deductibles and coinsurance amounts.  For a large family, that amount can quickly become unsustainable. In the past, it was common for employers to absorb the majority of these costs, leaving the employee responsible for only a small portion.  But as health insurance premiums continue to rise, more employers are placing more of the responsibility of meeting these costs with their employees, with employees feeling the pinch in their take-home pay. Another issue is with the rise in self-employed, more Americans are now responsible for the cost of their healthcare.

While having insurance is important, as anyone who has had an unplanned emergency or operation can attest to, there are ways that you can save some money, both on premiums and on out-of pocket expenses.

Here are a few:

• During open enrollment, don’t automatically sign up for the same plan.  Spend some time looking at the other plans available and the potential out of pockets costs involved in each.  While this may take a little time, in the end it could save you a significant amount of money. And don’t make the mistake of signing up for the plan with the lowest premium.  The premium is only a small part of what you end up paying annually.
• You may want to consider a high-deductible plan.  Younger individuals and families without children in particular may find a high-deductible plan that works better for their finances. Couple your high-deductible plan with a health savings account (HSA) to save even more money.
• Save even more with a flexible spending account (FSA). Most employers that offer health insurance also offer the option of opening an FSA account.  This allows you to choose how much money you want to set aside each year for out of pocket medical expenses. The deduction is tax-free, so your annual income is reduced by the amount you contribute. The current maximum contribution allowed is $2,650 and if you’re married, both you and your spouse can contribute that amount.  Just be sure to be realistic when estimating, as you forfeit any funds in your FSA that have not been used by the end of the year.
• Always double check any bills you receive from a medical provider the same way you review your credit card statements.  Hospitals in particular are notorious for adding charges that are inaccurate or just plain wrong.
• Don’t assume that no means no.  If your insurance company denies payment for services, there are a number of ways you can fight that decision, starting with an appeal.  Many insurance companies initially deny payment, only to reconsider if you file an appeal. It may not always work, but it’s worth a shot.
• Stay out of the emergency room.  While sometimes a medical issue is an emergency, colds, coughs, and the flu are not.  Using urgent care instead of the emergency room will save you a lot of money on co-pays and on any follow-up charges you may be responsible for.
• Be pro-active.  See your health care provider on a regular basis, which can catch potential issues at the beginning, helping you avoid emergency room visits and potential other issues that may eat into your healthcare budget.

There are numerous other ways to save on healthcare costs, but these are certainly a good place to start.

Resources

https://www.parents.com/parenting/money/family-finances/save-money-on-health-care/

https://www.cnbc.com/2017/06/23/heres-how-much-the-average-american-spends-on-health-care.html

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