Each year, the price of healthcare accelerates. According to the Milliman Medical Index, in 2014, the cost for a four-person household was $23,215 a year just for “an average employer-sponsored preferred provider organization (PPO) plan.”
However, in 2018, that cost jumped up to $28,166. While this number reflects both the employer’s and the employee’s contributions, the out-of-pocket costs to the employee are rising faster than those subsidized by the employer. In fact, MMI notes that in 2018, employees saw a 5.9 percent cost increase but “employer expenses increased by only 3.5%.”
While monthly costs to employees rise, the cost of other medical expenses like doctor and drug co-pays, as well as deductibles and coinsurance responsibilities also may fluctuate each year, depending on the plan. For families, this may mean more out-of-pocket expenses for regular prescriptions, higher prices at the pediatrician and a bigger hit to the budget if/when a family member needs medical attention—both major and minor.
Some medical costs are out of a family’s control. Major medical costs from an accident or a catastrophic illness often catch families off their guard and can easily wipe out savings or cause families to suffer serious financial burdens. While no family wants to think that the unthinkable could happen, sometimes it does happen. Preparing for the worst isn’t just smart; it can be a financial saving grace.
But how do you save while also dealing with the insane rising costs of routine healthcare costs? And, more importantly, how do you save on healthcare without sacrificing health? Medical neglect can lead to more serious issues down the road, and those issues can cost a family more money in the long run
Saving money on healthcare expenses requires that families routinely manage their health. However, keeping healthcare costs in check also means that families must understand their healthcare plan, the benefits allowed under the plan and make smart care decisions that maximize the value of the plan. Here are some suggestions that could help you save time and money on your family health care.
Picking a Plan
The first factor to consider when choosing a healthcare provider is to find a plan that best meets their healthcare needs. Typically, employers offer different plans with different price points and benefits. Some plans cost much less, but also rely on families contributing to a health-savings account to subsidize the costs that the plan won’t cover. Other plans cost a high-dollar amount on a monthly basis, but that price includes lower deductibles and fixed co-pays for doctor’s visits, medical specialists or other services. There are also mid-range plans that offer a higher deductible but a lower monthly price.
Many families can only afford so much money per month for healthcare. This means that families must understand their budget and how that accommodates their healthcare needs. You cannot spend more money on insurance premiums than your budget allows. Look at the monthly budget, and then take that bottom line to help select the plan that fits your family’s needs.
However, if a family has specific medical needs each month, then finding a way to allocate more money for a better plan is ideal. If you know that a child will require a yearly MRI, for example, and selecting a cheaper plan means that the procedure is subject to a $6000 deductible, then you need to see if a more expensive plan would provides the same procedure at a lower deductible (or even a fixed co-pay). Sometimes higher deductible plans, while saving money in the short term, actually cost more in the long term.
Financial Checklist for Plans:
- Determine your monthly budget for insurance premiums.
- Review each plan offered by your employer and compare the benefits/costs of each.
- If you choose a plan that allows for a health-savings account, determine if you can save enough money each month to offset the expenses of possible major medical events.
Pharmacy & Prescription Savings
Some families have monthly prescription costs each month. And when an insurance plan changes, these costs can fluctuate. To save money on medical prescriptions, families must understand the benefits of their prescription plan. There are many drugs that are offered in generic form. However, as most prescription plans schedule their co-pays by drug tiers, families absolutely must research how those tiers affect their financial bottom line.
Many drugs have competing brands that are essentially the same drug but are owned by different manufacturers. Your plan may provide a lower cost for one brand over the other. Or, again, a generic may cost even less.
Review your drug tiers, and find the drugs that you normally fill on a monthly basis. If you notice that your plan lets you pay less for a competing brand, talk to your doctor to see if switching brands is feasible.
Mail-order prescriptions often let families save more for filling their scripts in 90-day supplies. If you don’t mind a higher up-front cost, consider a mail-order option. You’ll save more money over time.
Some local pharmacies also may offer free basic antibiotics or other scripts. These are usually the most commonly prescribed drugs for basic infections. But saving $10 on a script for penicillin for an ear infection is $10 you can allocate elsewhere.
Financial Checklist for the Pharmacy:
- Review your prescription plan, including drug tiers and their costs. Consider switching brands if one is offered at a lower tier price than its competitor (talk to your doctor about other recommendations)
- Choose mail order prescriptions to save money and stock up on monthly medications
- Investigate local pharmacies that may offer free basic prescriptions for common antibiotics.
Almost every insurance plan has network providers that have been contracted to accept a certain rate for their medical services. In-network providers offer the best prices for your care—both for basic office visits and major medical services.
However, some families prefer one local hospital or doctor over another. If you prefer a specific hospital or want to ensure that your doctor is covered, then you need to research your plan to make sure that your preferences are in the plan’s network. Often, when selecting a plan, the first thing that families should do—after budgeting, of course—is to review what doctors and hospitals are in-network.
You never want to be in a position where you need a major medical service only to find out that your practitioner isn’t covered by your insurance. As out-of-network practitioners are often covered at a lower rate by your insurance, you will pay more for your doctor if he/she is not contracted by your plan.
Review each plan’s participating networks and then choose the plan that you know will cover your doctors. Some plans offer numerous networks and hospital affiliations, but others are much more limited. Limited network plans may save money, and if your doctor is covered, that might be fine. However, understand that while limited networks save money, they also may limit your care choices.
- Review each plan’s participating doctors and hospitals.
- Understand the costs associated with in-network versus out-of-network providers.
Saving money on healthcare requires being proactive about health. Most plans allow for one yearly free well visit or ‘physical’ exam to check your basic healthcare needs and assess any risks. A yearly well check allows you to discuss any issues and concerns with your doctor and stay on top of your health needs.
These yearly visits also may allow your doctor to catch early signs of diseases or other medical issues that could turn into major concerns later. Discovering that you have an elevated cholesterol level or high blood pressure allows your doctor—and you—to address these issues and help prevent them from becoming a danger to your health.
You also may schedule yearly eye exams and bi-annually dental visits. While an initial co-pay for some of these visits may be annoying, the costs associated with delaying care could be much higher…or even unmanageable. Women also should have a well-woman exam yearly.
Consider getting an annual flu shot and be sure that you stay up-to-date on other vaccinations, including Tdap (tetanus, diphtheria and pertussis). Adults should have a Tdap vaccine every 10 years.
Managed Care Checklist:
- Schedule a yearly physical with your primary physician
- Women should have well-woman exams yearly.
- Stay on top of vaccines to maintain optimum health.
There is usually a very big difference between the costs of a doctor’s office visit, an urgent care visit and a trip to the emergency room. Health insurance plans don’t like to pay for visits to the emergency room if the issue is one that can be resolved by an office visit or a trip to a local urgent care. And, of course, families don’t like the high cost of those ER visits either.
However, don’t delay care or a visit to the ER if it’s truly an emergency. Just know your plan’s protocol for those visits, including how much you can expect to pay. Sometimes an ER visit is subject to a deductible, other times it’s a co-pay. Understand your costs, so you aren’t surprised when the bill comes. But never, ever delay lifesaving care out of fear of the cost. If you are burdened by an ER bill, many hospitals can work with you to create payment plans or you may even qualify for financial assistance through the hospital.
If your family is hit by a catastrophic hospital visit and the bills are beyond your means—even after the insurance has paid—talk to the billing department of your hospital for help and options. You also may find that a hospital social work could help you find other resources for financial assistance.
Hospital Cost Checklist:
- Understand the costs associated with ER, urgent care and office visits
- Arrange payment plans with the hospital to make big bills more manageable.
- If your family is hit with major costs beyond your means, investigate financial assistance programs at the hospital or consult with a social worker with the medical facility.
Each year, the cost of healthcare seems to skyrocket. And while employers share part of that financial burden, the employer is often hit with the highest portion of the cost. Managing the monthly cost of healthcare means families must research plans, the costs, and services that are necessary for your individual needs. Always research prices of drugs and select in-network providers to keep costs as low as possible. However, major medical catastrophes happen, and when they do, understand that there are options available. Payment plans and other financial arrangements may be an option, but families must reach out instead of letting medical bills pile up unpaid.