Your Life for Less

For some families, health insurance costs and other medical expenses make up a significant part of the budget. We’re all aware of some common ways to save on medical expenses. These include using generic medications and reviewing your bill for errors. While these are important, you’re probably already using some or all of these tactics to save money.

What I want to talk about are some ways to save that you might not have considered. Did you know that by not using your health insurance at all you might get a much better price? The LA Times did a story about people who were charged one price if they allowed the hospital to bill their insurance company, and a much lower one if they agreed to pay in cash.

One woman was charged $6,700 for a CT scan through her insurance company, and later found out that if she hadn’t used insurance the price would have been just over $1,000. This is the insurance industry’s dirty little secret: as one doctor who is quoted in the article says, “The last thing the insurance companies want you to know is how inexpensive this stuff really is.”

If you use your insurance to pay for care, you’re forced to pay that insurance plan’s negotiated rate with the hospital. So before you give up your insurance info to the hospital, try to get the cash price out of them. You may be surprised how low it is.

Having health insurance is a good thing for two reasons: it gives you free access to preventive care such as flu shots and health screenings, and it prevents you from becoming bankrupt should you experience a catastrophic health issue. For relatively low-cost services like outpatient surgery and x-rays, it might make sense to pay the cash price if you can.

One health plan that’s growing in popularity is the Health Savings Account. HSAs consist of two parts – a high-deductible health insurance policy and an investment account. The idea is that you act as your own insurer, setting aside money each month in the investment account. You decide which claims get submitted to the insurer. The high-deductible part means that you have to pay a significant amount before the insurer will start paying. But with low premiums, more of your money stays in your pocket.

These plans are meant to insure you against huge medical bills, and are superior to the Flex Spending accounts because you don’t lose any funds at the end of each year. These plans make sense for the relatively healthy who don’t visit the doctor more than a few times a year.

Another option is to buy your health insurance from Costco. Yes, you saw that right. Costco is partnering with Aetna to sell individual policies. So far it’s available in 8 states: Arizona, Connecticut, Georgia, Illinois, Michigan, Nevada, Pennsylvania, Texas and Virginia.

If you’ve received an inflated bill and have tried negotiating with the hospital billing department, you’ve probably realized that you’re not going to get any sympathy. The sole purpose of the billing dept. is to collect as much money from patients as humanly possible. They don’t keep their jobs by cutting you slack. Instead, you want to meet with the hospital social worker or patient advocate.

These people are given more leeway to hear your cause and help you reduce your bills. At the very least, they should be able to set up a payment plan with you. Ultimately, you want to avoid being turned over to collections because that damages your credit.

Next, I have two options for care that you may not have considered. First, see if you have access to a university hospital system near you. University hospitals tend to be less expensive than for-profit and even nonprofit hospitals. When I was growing up my parents routinely took me to the local college for teeth cleanings and other dental work. And while in college I used a doctor in the university health system as my primary care physician.

For non-emergency care, there’s a second (more exotic) option: medical tourism. As you know, healthcare costs in the United States are much higher than the rest of the world. In India and other parts of Asia and the Middle East, you have access to top-quality surgeons and specialists and even 24-hour private nursing care, all for less than the cost of one procedure in the U.S. This is true even when the flight costs are factored in. Plus, you get a free trip overseas out of it! Check with the Joint Commission International to see which facilities are accredited.

Get cash to seek out cheaper care

I believe that a big part of the problem with healthcare is we’re not consumers in the marketplace. Instead, we’re simply bystanders paying the mysterious fees billed to us by the hospitals and insurance providers. There’s an experiment going on in the states of New Hampshire, Connecticut and Indiana, where insurers pay you cash to seek out less expensive care. This puts consumers back in the driver’s seat and gives them an incentive to reduce their cost of care.

If consumers felt more empowered to limit their costs, we’d be well on our way to reducing the country’s medical expenses.

What are some ways you have saved on medical expenses?

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