Monday, September 10, 2007

13 ways to cut your health care costs


Want to know the best way to dramatically reduce your health care costs over your lifetime? Choose healthy parents. Wake Forest University researchers suggests genetic influences are as powerful, or even more so, than blood pressure level, age, gender, weight, where you live, or whether you have diabetes or such illnesses such as coronary artery disease.

OK, don't get discouraged. There are realistic ways to improve both your health and cut your health care costs that have nothing to do with who your parents are. Here are just 13 of them.

  1. Know your health insurance plan's rules. Then follow them.

There are thousands of different health insurance plans nationwide, each one as different as the insurer or employer that sponsors them. If you don't have a clue whether you need a pre-authorization for outpatient surgery or whether your allergist is in your health plan's network of doctors, you can wind up paying significantly more money than you should for your health care.

Never rely on what you think is true about benefits or providers that are covered under your plan — even if they are stated in your most recent benefits handbook. Always double-check whether the benefits, services, or providers you need are covered under your plan before you receive treatment. Do this by calling your plan's customer-service department. Then follow through by obtaining any necessary authorizations or by scheduling treatment with a doctor within your insurer's network of providers.

Remember, if you don't follow the rules, your insurer can deny your claim and you'll wind up getting stuck with the bill.

  1. Pick the health insurance plan that gives you the most bang for your buck.

Don't automatically select the cheapest plan. You have to weigh the value of your health plan vs. price. If you go with a cheap health plan but it doesn't pay for the benefits you need, you are not getting good value for your health insurance dollars.

If you're young and healthy, you might want to go for lower premiums and higher co-pays. But if you're older, have a chronic health condition, or have young children who make frequent visits to the doctor, you're probably better off with higher premiums and lower co-pays.

3. Coordinate your family's health insurance plans.

Dual coverage can be expensive. If both you and your husband maintain coverage, make sure it makes financial sense to pay for both. You don't want to pay more than you'll ever get back in benefits by having duplicate coverage.

If you do decide to maintain both plans — as an added safety net or because the benefits in one plan are needed and not offered by the other — make sure you understand how the benefits in each plan will coordinate with the other.

Coordination of benefits (COB) can be complicated, especially if you have one type of plan, such as an indemnity plan, and your spouse has an HMO.

4. Plan ahead for emergencies.

Midnight, when your baby has developed serious croup, is not the time to educate yourself about which nearby hospitals belong to your health plan's network of providers. Learn this information ahead of time, write it down, and keep it someplace handy. If you can't find this information during an emergency, call the 24-hour help line number listed on the back of your membership card.

Additionally, you should know before an emergency:

  • If any of your family's doctors' offices are open on nights or weekends, their hours, and the co-payment for an after-hours visit. Although an after-hours visit may cost you more than a visit during regular business hours, it is probably cheaper — not to mention less stressful — than a trip to the emergency room. An emergency room visit can cost you a $50 to $100 co-payment.

  • Which ambulance services are covered by the plan and under what circumstances?

5. Cut your pharmacy costs.

Most health plans have a three-tier co-payment system for prescription drugs. The lowest tier is the least expensive and includes generic drugs; the middle tier is made up of medications that your insurer considers "cost effective;" and the top tier features the most expensive brand name drugs. You can cut your costs by $10 to $40 per prescription by asking your doctor to prescribe you drugs that belong in the first two tiers.

If deemed medically appropriate by your doctor, you can split pills to save money. For example, if the medication you need comes in 50 mg and 100 mg tablets, and you need 50 mg per day, ask your doctor if he will prescribe you the 100 mg tablets and then you can split them.

Remember, pill splitting is not appropriate for all medications and may even be dangerous in situations where exact dosing is medically necessary. Consult your doctor.

6. Take advantage of tax breaks.

Consumer-driven health plans, flexible spending accounts (FSAs), health reimbursement arrangements (HRAs), and medical savings accounts (MSAs) — known collectively as health care spending accounts — are becoming more popular. One of the most popular is the FSA, an employer-sponsored account that offers you a way to pay for certain out-of-pocket health care or dependent care costs on a pre-tax basis.

Dental and vision care count as reimbursable medical expenses under FSA arrangements, so don't forget to save your receipts for these services.

7. Quit smoking.

This can immediately save you $7.50 per day ($218 per month) if you are a New Yorker with a one-pack a day habit. Additionally, the lifetime medical costs for smokers, despite their shorter lives, are higher than those for nonsmokers by approximately one third, according to Florida physician Dr. Karl Hempel. The direct health-care costs associated with smoking are in excess of $16 billion per year.

8. Lose weight.

According to a March 2002 Rand Corp. study, being obese adds $395 each year to your average $1,500-per-year health care costs, more than smoking (an addition of $230), aging 20 years ($225), and problem drinking ($150).

Medical experts say that about 1 in 3 Americans is overweight and 1 in 5 is obese based on the body-mass index (BMI). The BMI is an individual's weight divided by height squared. Between 1991 and 2000, obesity in the U.S. rose 60 percent while smoking rates have been cut roughly in half since 1964.

Not only is being overweight bad for your health, it can bankrupt you if you are unable to obtain individual health insurance because of it and you suffer a serious illness or injury.

9. Exercise more.

It's harder to quantify what you'll save in health care costs by exercising more since this number is also linked to losing weight through dieting. But generally speaking, exercising not only improves your health, it saves you money when you purchase life insurance because healthy people live longer, and longer life expectancies mean better life insurance rates. Many studies show it's never too late to start exercising and that even small improvements in your fitness level can improve your health and longevity.

10. Seek out free or low-cost health screenings, checkups, and services.

Does your HMO offer free blood pressure checks? Low-cost flu costs or nutrition, dieting, and physical fitness classes? Take advantage of these lifestyle programs to help you stay healthy and reduce your doctor visits and medications.

11. Raise your deductible or co-payment.

Whenever possible and financially practical, lower your monthly health insurance premium by raising your deductible or co-payment. But make sure that you have money saved to cover the deductible.

12. Haggle with your doctor.

There's nothing new about people asking for discounts on medical treatments — there's a long history of patients negotiating with their providers for lower prices on elective procedures, such as laser vision surgery or psychotherapy. So establish the price you believe is reasonable and go for it.

13. Search for a subsidy.

If you are uninsured, disabled, or have a low income, you should see if you qualify for free or low-cost health insurance through a state or federal program such as Medicaid or Medicare. Read Understanding Medicare and Understanding Medicaid. Additionally, if you have a low income or are uninsured, your children may be eligible for free or low-cost health insurance through the Children's Health Insurance Program.

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