No matter how you get your insurance -- through your employer, from a state exchange, from an agent, or directly from an insurance company -- you're paying a bigger share of your health-care costs than in the past. Higher premiums are only part of the picture. Deductibles are rising, provider networks are shrinking, and insurers have been switching from fixed-dollar co-payments to coinsurance, based on a percentage of the cost of care.
Your out-of-pocket costs could rise significantly unless you learn some key strategies to become a better health care shopper. The following moves can help you save hundreds, or even thousands of dollars:
1. Stay in your network
Many insurers are shrinking their networks and including fewer doctors and hospitals.
"The most expensive health care mistake you can make is to go out of your health plan's network," says Jackie Aube, a senior vice-president of Cigna. The cost difference can be huge. Preferred provider organizations (PPOs) usually let you use out-of-network doctors but charge higher co-payments or coinsurance rates -- say, 50 percent for out-of-network care compared with 10 percent for in-network services.
If your plan is a health maintenance organization (HMO), you may not have coverage at all for out-of-network providers except in an emergency.
The out-of-network base price may also be higher because the network's providers agree to the insurer's negotiated rate, but outside providers can charge more. You may also have a higher deductible for out-of-network care and a higher annual limit on your out-of-pocket expenses.
Before you visit a doctor or have a procedure, ask both your insurer and the providers if they're included in your plan's network. If you're having surgery, check on the surgeon, anesthesiologist and facility.
2. Find out about super-preferred providers
Your health plan may provide extra incentives for you to use certain in-network providers or facilities. The UnitedHealth Premium designation program, for example, recognizes physicians that meet guidelines for providing high-quality, cost-efficient care, and you may pay lower co-payments or coinsurance rates if you use those doctors. Most health plans' search tools can help you find providers who participate in these special programs.
3. Save at stand-alone radiology centers
Different facilities charge vastly different prices for X-rays and tests. The average outpatient hospital cost for MRIs and CAT scans is $1,384 to $1,668, says Aube, but the average radiology center costs $445 to $725. And there can be a huge range between the highest and lowest cost in your area.
For example, among all facilities within 25 miles of New York, the cost of a knee MRI ranges from $238 at a free-standing radiology facility to $2,191 at a local hospital, says Victoria Bogatyrenko, vice-president for innovation at United Healthcare. Most insurers have tools to help you compare the costs of x-rays and tests at different types of facilities in your area.
4. Ask your doctor about cheaper facilities
Your doctor may work at several hospitals or outpatient surgery centers. While the surgeon's charge will be the same, "the hospital's fees can vary by thousands of dollars," says Aube. The cost may be even less at an outpatient surgery center, even though the same doctor is performing the procedure.
For example, the average cost nationwide for a colonoscopy, GI endoscopy or arthroscopy in a hospital is $2,548, but the average cost at an outpatient surgery center is $959, she says. Make sure the facility you choose is in your insurer's network.
5. Avoid the emergency room if you can
Sometimes you can't avoid a trip to the emergency room. But you may be able to go to a much less expensive urgent care center or convenience care clinic for some types of care. Visit an urgent care center for conditions such as minor cuts, burns and sprains, fever and flu symptoms, joint or lower back pain, and urinary tract infections, says Aube.
You may pay even less at a convenience care clinic at a supermarket, pharmacy or other retail store, where a clinician can treat you for sinus infections, rashes, earaches, minor burns and other routine medical conditions, she says.
The cost varies by type of facility. The average cost nationwide of an emergency room visit is $1,553, compared with $135 for an urgent care center and $58 for a convenience care clinic. Find out ahead of time which nearby urgent care and convenience care clinics are included in your insurer's network.
6. Take advantage of telemedicine
Many health plans now offer 24-hour help lines staffed by doctors or nurses who can treat you by phone or online video chat. You can use this service for nonemergency conditions, such as cold and flu symptoms, nausea and vomiting, sore throat, earache, and sinus pain. A doctor will prescribe medications, if appropriate. The average telehealth consultation costs $40 to $50.
7. Switch to generic drugs
Generic drugs can cost as much as 80 percent less than their brand-name alternatives, says Aube. The lower list price makes a huge difference when you're in the plan's deductible period and paying the full price out of your pocket. And the coinsurance rates are usually lower, too -- often 10 percent to 15 percent of the cost for generics, 25 percent for preferred brand-name drugs, and 50 percent for nonpreferred brand-name drugs.
Some plans no longer cover certain brand-name drugs. For example, one popular health plan doesn't cover Lipitor, which costs $180.75 for a 30-day supply of 10 mg tablets. But the generic equivalent, atorvastatin calcium, would cost $13.92 under the same plan, says Jim Yocum, executive vice-president of DRX, which provides Web-based prescription-drug comparison services to health plans and employers.
You may also get a good deal on generics at certain stores, such as Walmart and Target, which charge as little as $4 for a 30-day supply of certain drugs or $10 for a 90-day supply.
8. Keep an eye out for new generics
The patents for several popular brand-name drugs -- Celebrex, Copaxone, Nexium, Actonel and Exforge -- are scheduled to expire soon, which will open the door for drug companies to manufacture generic alternatives.
"It takes some time after patents expire for manufacturers of generics to receive approval from the U.S. Food and Drug Administration, make the drug and get supplies on drugstore shelves. Litigation can also delay expected patent expiration dates," says Yocum.
You can look into generic alternatives now for Cymbalta, Maxalt, Maxalt MPT, Micardis, Micardis HCT, Twynsta and Xeloda, whose patents expired recently and for which generics are on the market, says Yocum. Most insurers have Web tools or apps to help you look up generic alternatives to your drugs.
9. Find therapeutic alternatives
Some brand-name drugs don't have a generic equivalent but may have a "therapeutic alternative." That means a medicine that is in the same class of drugs but is chemically a little different. For example, Diovan is a blood-pressure drug with no direct generic substitute. In one popular plan, the monthly cost for a 30-day supply of 80 mg tablets is $149.66. But you could spend $1 per month for a comparable dose of iosartan potassium, or $2 per month for irbesartan, or $20 for a monthly supply of Benicar, says Yocum. Ask your doctor about any switch that isn't a direct generic substitution.
10. Use preferred pharmacies
More health plans are introducing preferred pharmacies, which cost even less than regular in-network pharmacies. For example, the Humana Walmart Rx plan for Medicare Part D charges a $1 co-payment for a 30-day supply of certain generic drugs purchased at Walmart or Sam's Club (or a $0 co-payment through RightSource mail order), but the plan charges a $10 co-payment for the same drugs purchased at a nonpreferred network retail pharmacy.
For pricier "Tier 4" preferred brand-name drugs (there are a total of five pricing tiers), you'd pay 39 percent coinsurance through Walmart, Sam's Club and RightSource but 50 percent coinsurance at nonpreferred network pharmacies.
11. Get your drugs through the mail
Mail-order pharmacies may provide a three-month supply of drugs for the same price as a one-month supply at a local pharmacy. Some plans require you to use mail order for maintenance drugs.
12. Split your pills
Ask your doctor if you can save money by cutting your pills. Your physician will have to write a new prescription for twice the strength and half the quantity, noting your intent to split the tablets, says United Healthcare's Bogatyrenko.
13. Know the rules for prescriptions
Many health plans are adding new hurdles that you must clear before you can get certain medications. For example, you might have to try step therapy (which requires you to try other medications first, if possible) or seek prior authorization (the insurer asks your doctor a detailed list of questions about your condition and your treatment before it will cover the drug). Understand the rules for getting your drugs covered, and get your doctor involved to help explain to the insurer why you need the medication or to file an appeal if it's denied.
14. Get a prescription for over-the-counter drugs
You can no longer use tax-free money from a flexible spending account or health savings account for over-the-counter drugs without a prescription (except insulin). To get reimbursed from your FSA or HSA, ask your doctor for a prescription for any medications you use regularly, such as pain relievers, allergy medications, anti-fungals and cough-and-cold medicines, says Jody Dietel, of WageWorks, which administers FSAs for employers.
15. Get free preventive care
The Affordable Care Act requires all insurers to provide several kinds of preventive care without any cost-sharing from you, regardless of your deductible. Depending on your age, this rule may apply to blood-pressure, diabetes and cholesterol tests, mammograms and colonoscopies, flu shots, routine vaccines, well-baby and well-child visits, and other preventive services (see the preventive-care page at Healthcare.gov for details).
16. Avoid preventive-care surprise charges
The cost-free preventive care rule applies only to in-network services (it's not unusual for an anesthesiologist involved in a colonoscopy to be out-of-network, for example), and you may be charged extra if something comes up in the test that requires more investigation. Ask if all of the providers involved in a procedure are in your insurer's network.
17. Sign up for Medicare's preventive benefits
Medicare beneficiaries can also get many preventive benefits without co-payments or deductibles. The list includes mammograms, screenings for cervical and colorectal cancer, flu shots, pneumonia shots, and an annual wellness visit and personalized prevention plan. Check Medicare's Preventive and Screening Services online for a full list.
18. Get extra cash for wellness programs
Many employers who offered wellness benefits that weren't worth the effort have been beefing up their incentives recently. More than one-fourth of the large employers surveyed by the Kaiser Family Foundation offer gift cards, travel, merchandise or cash to workers who participate in wellness programs.
The rewards can be substantial. Large employers surveyed by the National Business Group on Health added an average of $350 to employees' health savings accounts, or $500 to health reimbursement accounts, for participating in a wellness program.
19. Sign up for special health programs
You may get extra cash or discounts on your premiums for taking a health-risk assessment or participating in a tobacco-cessation program. Or your employer may offer free weight-loss or stress-reduction programs. More than half the employers surveyed by the Kaiser Family Foundation offer special disease-management programs for diabetes, asthma, obesity or hypertension. Such programs may provide incentives for you to take your medications, visit
20. Get credit for your deductible
If you have a high-deductible plan, make sure you're getting credit toward the deductible for all of your care. Even if you're paying from your own pocket during the deductible period, file the claim so that you'll get the rate the insurer negotiated with the provider.
Check your explanation of benefits to make sure you received credit toward meeting your deductible and your annual maximum out-of-pocket spending limit. And time your procedures carefully; you may want to schedule them near the end of the year, after you've met your deductible, rather than in the new year, when the deductible resets.
21. Get a tax break from an HSA
If your health insurance policy has a deductible of at least $1,250 for individual coverage or $2,500 for families in 2014, you may be eligible to open a health savings account. An HSA lets you set aside tax-deductible money (or pretax money through an employer) that you can use tax-free in any year to pay your deductible and other out-of-pocket medical expenses.
In 2014, you can contribute up to $3,300 to an HSA for individual coverage or up to $6,550 for families (plus another $1,000 if you are 55 or older anytime during the year).
21. Get free HSA money from your employer
You may be able to collect extra money from your employer if you sign up for an HSA. Some match your contributions, but others seed your account just for signing up. It isn't unusual for employers to contribute $500 for single plans and $1,000 for family plans, says Jeff Munn, of Fidelity, which administers HSAs for employers. Your employer may contribute even more to your account if you participate in a wellness program or take a health-risk assessment.
22. Use HSA money in retirement
Because HSAs do not have a use-it-or-lose-it rule, you can keep the money growing in the account for the future and use it tax-free to pay for many medical expenses down the road, even in retirement. You can't contribute to an HSA after you sign up for Medicare, but you can still use the money for, say, co-payments, deductibles, prescription drugs (including over-the-counter drugs with a prescription), vision and dental care, and a portion of your long-term-care premiums (the amount is based on your age).
You can also use the money tax-free to pay your for Medicare Part B, Part D or Medicare Advantage premiums (but not for medigap).
23. Match HSA investments with your time frame
If you use your HSA to pay out-of-pocket medical bills right away, look for an administrator with low fees, low minimum requirements, and maybe a debit card that makes it easy to use the money at the doctor's office.
If you use other cash for current medical expenses and keep the money growing in your HSA for longer-term costs, look for an administrator that offers good investment choices (many let you invest in mutual funds or sometimes even stocks), and see if you can minimize fees by maintaining a minimum balance in the account. Compare HSA administrators' investing options and fees at http://www.hsasearch.com.
24. Contribute to a flexible spending account
If you don't have an HSA-eligible high-deductible health insurance policy, contribute to a flexible spending account, if your employer offers one. You can contribute up to $2,500 to an FSA in 2014, and the money in an FSA escapes federal, Social Security and Medicare taxes (and in most cases, state and local income taxes, too). You can use these tax-free funds to pay out-of-pocket medical expenses throughout the year, and many employers now let you carry over $500 in FSA money from one year to the next.
25. See if you qualify for help with premiums
If your modified adjusted gross income is less than 400 percent of the federal poverty level ($46,680 if you're single or $62,920 for a couple), you can qualify for a government subsidy to help pay your premiums if you buy coverage on your state health insurance exchange. If your income is below 250 percent of the federal poverty level ($29,175 if you're single or $39,325 for a couple), you can qualify for a cost-saving subsidy that reduces co-payments and other out-of-pocket expenses (but only if you buy a "silver" insurance plan).
Notify the exchange if your income changes during the year. You can qualify for a bigger subsidy if your income drops or, if your income rises, you'll avoid a surprise at tax time. Be careful about moves that could boost your income above the cut-off for the subsidy, such as converting a traditional IRA to a Roth or withdrawing money from a traditional IRA or 401(k).
26. Change your health plan midyear
Open enrollment for individual insurance is closed for 2014, whether you buy coverage on the exchanges or from an insurer (it re-opens Nov. 15, 2014, for 2015 coverage). But you may qualify for a special enrollment period if you leave your job or retire and lose your employer's coverage (even if you qualify for COBRA), or if you have such life-changing events as getting married or divorced, having a baby, or moving to a new state.
See the special enrollment period information at Healthcare.gov for details. If you retire in the middle of the year and your income drops, see if you qualify for a subsidy on your state exchange. Your full year's income -- how much you earned so far this year, as well as your estimate for your income for the rest of the year -- will be used to calculate whether you qualify for a subsidy.
27. Watch out for common errors
Always get an itemized bill when you have a hospital stay or major procedure -- and question unexpected charges. Then match your bill with your explanation of benefits. Coverage may be denied if the procedure wasn't coded properly, says Pat Pane, a medical claims specialist in Wilmington, N.C. You can find a medical claims expert at http://www.claims.org.
28. Ask for a cash discount
If you're still in the deductible period, see if you can get a discount for paying cash. Make sure you're getting the insurer's negotiated rate and submit the claim yourself so that it counts toward your deductible.
29. Compare costs using the web or apps
Many insurers have improved their health care shopping tools over the past few years, using the insurer's negotiated rates with providers in your area to show how much you'll pay under your policy. Aetna's Member Payment Estimator, for example, shows up to 10 cost estimates for a procedure in your area, including a variety of options (stand-alone centers, hospitals, convenience-care clinics, ERs). You can also compare prices for your drugs at several pharmacies in the area, search for lower-cost medications, and find in-network providers.
Some employers and insurers even offer alerts to let you know when the price of your drug has dropped, if a generic alternative becomes available, or if you could save money by getting x-rays at a stand-alone facility, says Douglas Ghertner, president and CEO of ChangeHealthcare, which provides health care shopping tools to employers and insurers.
30. Play by the rules
Review your insurer's rules regarding emergency care and find out if you need to contact the insurer for approval before you can receive certain kinds of care. Familiarize yourself with the appeals process in case a procedure or drug is denied, or if you need permission to go to an out-of-network provider. You may also get help with appeals from your state insurance department (see http://www.naic.org for links).
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