Barbara O’Neill, Ph.D., CFP®
Distinguished Professor and Extension Financial Management Specialist Emeritus
Rutgers Cooperative Extension
Health care costs take a big chunk out of many family budgets. This includes expenses for health insurance policy premiums as well as deductibles, copayments, and coinsurance when medical bills occur.
According to U.S. Consumer Expenditures Survey data analyses, the average American household spent almost $5,000 per person on health care in 2018, including about $3,400 for insurance alone. Compared to medical services and prescription drugs, insurance is the largest driver of health care costs.
What to do? Fight back as best you can by controlling any potential health care costs that you can. Consider these ten money-saving tips:
- Ask About Health Care Costs- Request a ballpark price quote. According to an article in the Wall Street Journal, inquiring about costs and mentioning financial concerns may be enough to prompt your doctor to recommend a less expensive treatment or to simply monitor a condition “to see if it gets better on its own.”
- Negotiate Drug Costs- Ask questions. The above article also recommends discussing financial considerations about prescription drugs with your doctor. This can lead to receiving a supply of free drug samples that the doctor has on hand and/or a prescription for less expensive generic drugs (see below).
- Buy Generic Drugs- Ask your doctor or pharmacist if required prescription drugs are available as less expensive generic drugs. Generic drug savings can average hundreds of dollars over the course of a year. Also make sure that prescribed drugs are on your health care plan’s formulary (i.e., list of covered drugs).
- Compare Costs- Call around for prices to compare costs for diagnostic services (e.g., CT scan or bone density test) and lab work. The cost of a single procedure could vary by hundreds, even thousands, of dollars. Hospitals often charge higher prices than free-standing radiology providers and other medical service providers. Use the billing code from your doctor for an “apples to apples” comparison.
- Focus on Prevention- Practice good health habits that reduce the risk of costly medical problems. Examples include regular health screening exams (e.g., colonoscopies and mammograms), nutritious food, exercise, washing hands frequently, and flossing teeth.
- Get Prescription Deals- Order a 90-day supply by mail instead of buying a 30-day supply from a local pharmacy. The savings are generally 15% to 35% on monthly copayments. Another good way to save on prescription drug costs is to use a website/app like GoodRx and WeRx to search local pharmacy prices and apply available coupons and discounts.
- Try to Negotiate Discounts- Ask for a price break if you pay with cash when you are responsible for all or part of a medical bill (e.g., services from an out-of-network provider). Cash payments save a doctor or hospital the processing fee on credit cards. Sometimes, the cash payment may be lower than what insurance provides.
- Follow Health Insurance Rules- Read the “fine print” in your health insurance policy regarding referrals to specialists and pre-certification for medical procedures. Not knowing the rules for your health plan can result in denial of coverage for a claim.
- Use Free Health Care Services- Take advantage of free or low-cost community health fairs, well-child clinics, flu shots, gyms, and other health and medical services available at your workplace or in your community. Do the same thing for services, such as free rabies clinics, for pets.
- Check for Billing Errors- Request an itemized statement of your medical procedures and their costs and review it for errors. Report errors to the service provider promptly and request a revised billing statement. It is estimated that 80% of all medical bills contain errors, often due to incorrect billing codes.