Slash Your Doctor and Hospital Bills |
Ask for a Deal The rate that your doctor charges isn't set in stone. According to a 2005 Harris Interactive poll, about two-thirds of adults who negotiated for lower prices with a hospital or dentist succeeded, as did three out of five adults who bargained with their doctor. If you're paying out of pocket or face a high deductible, call your insurer's customer service number and ask about the rates it pays physicians in your area, which are typically lower than the sticker price set by providers. Then ask your doctor if he'll accept a similar amount. The more you know about the real cost of your care, the better you'll be able to negotiate discounts. Costs for 30 common hospital procedures can be found at cms.hhs.gov/HealthCareConInit, the website of the Centers for Medicare and Medicaid Services, or you can pay $7.95 for medical cost reports from HealthGrades, a ratings company. Large insurers like Aetna, Cigna and United Healthcare have also begun to post rates online for members, though not for every area of the country. Most doctors lose thousands each year on unpaid bills and spend thousands on credit-card processing fees. If you're footing the bill, laying out the bucks in advance of treatment can get you a 10% discount on your bill, says Pam Deloney of the American Private Physicians Association. As many as eight out of 10 hospital bills contain errors, increasing the tab by 25% on average. Keep a log of every test and medication you get, and check it against your medical file, which you can order from the hospital's billing office. If you spot an error, send a certified letter requesting a corrected bill, and a copy of all documentation to your insurer. Radiologists, anesthesiologists and other specialists don't always accept the same insurance as the doctor who admits you to the hospital. Call your doctor to get the names of the medical providers who will be involved in your treatment, and verify with your insurer that they're in the network. Do you know when you've met your deductibles or how much money is left in your health FSA? Programs such as Quicken's Medical Expense Manager ($50 at quicken.com) can tell you and also alert you to potential savings such as overlooked tax deductions and possible billing errors. Roughly half of all patients don't follow instructions about taking medicine, which results in 10% of hospital visits a year, according to the Merck Manual of Medical Information. Simply doing what you're told can save you your out-of-pocket share of the average $8,200 cost of a hospital stay. Hospitals charge a significant markup on equipment like crutches or braces, so you're almost always better off buying them on your own. If you're seeing a mental-health therapist every week, you're probably footing much of the bill: Most health plans limit coverage to 30 visits a year. You can cut the cost by going to a certified counselor or clinical social worker (average fee: $90 an hour) instead of a psychologist (around $120). A recent survey found no difference in effectiveness. Got an earache or upset stomach? Visit a walk-in clinic found at retail stores like CVS and Wal-Mart. Cost: about $25 to $100 for treating minor ailments, or about 25% less than the cost of care in a doctor's office, according to insurer HealthPartners. (But only 40% take insurance, so you may have to pay full price rather than just a co-pay.) Bonus: No appointment is necessary, and patients are usually in and out within 15 minutes.
Choose Wisely Don't just take the easy way out during open enrollment and sign up for the same health plan as you had last year. These days the difference in premiums is small, ranging from an average of $590 a year for an HMO to $637 for a PPO; the real differences lie in the plans' co-pays and deductibles. To figure out which option is best for you, estimate what your total annual costs are likely to be under each plan, depending on your family's medical needs (many companies have online calculator tools to help figure this out). If you have kids, you'll likely want a plan with low co-pays for doctor visits and good coverage for preventive care; if you're young and healthy, a plan with higher deductibles and lower monthly premiums may be a better bet. You know that seeing an in-network doc will save you 50% or more on the cost of treatment. But sometimes only an out-of-network specialist will do--say, if that physician is far more experienced in performing the procedure you need than in-network docs. In those cases, it's worth calling your insurer's pre-certification department to explain why using the out-of-network provider is essential and ask for coverage at in-network rates. You've got a good shot. "Insurers would rather strike a deal up front than go through an expensive appeals process," says billing expert Nora Johnson. Read the fine print on your plan to find out your insurer's requirements for referrals and pre-certification. You're likely to need them for expensive procedures like an MRI, which can cost you more than a thousand dollars if your insurer refuses to pick up the bill. Are you paying the tab for acupuncture or chiropractic care? Check your insurer's website or call the help line to see if your plan covers alternative medicine treatments. Some 87% now do. Many also offer discounts on preventive measures like vitamins and bike helmets. Check Yourself Out If you're in the market for a new policy and you've applied for individual health, life, disability or long-term-care insurance in the past seven years, go to MIB.com to see whether this insurance industry antifraud group has a file on you. Request a copy (it's free) to make sure the information provided about your health status is right. If you find a mistake, ask for a correction in writing ASAP. Errors can drive up your premiums by hundreds of dollars a year.
If you have a high-deductible health plan (at least $1,050 for individuals; $2,100 for families), you are eligible to fund a health savings account (HSA), which you can tap to pay medical expenses. You'll save about $1,500 in taxes for every $5,000 you put into an HSA. Any funds you don't use will grow tax-free and can be rolled over from year to year.
Leaving your job next year? Switch to the lowest-cost plan during this year's open enrollment. Then, after you quit, federal rules (known as COBRA) will let you stay on your employer's health plan for up to 18 months, although you'll usually have to pay the full cost, plus 2%. Once you've tapped out COBRA, you must sign up for a new policy within 63 days or insurers can legally turn you down or refuse to cover pre-existing conditions. Add up your co-pays, deductibles and other out-of-pocket medical expenses from last year to figure out how much to put into your flexible spending account (your benefits department can tell you what's eligible). For every $1,000 you put in, you'll slash about $300 in taxes. Don't Lose It You'll forfeit any funds in your FSA that you don't use by the end of the year or by March of the following year (depending on your company). Need to get rid of some bucks? Stock up on over-the-counter medical supplies like Band-Aids, cold and flu tablets and aspirin; order a six-month supply of contact lenses and solution; or schedule an extra session with your shrink, if you've exceeded the number of therapist visits covered by your health plan. If you're close to the dollar limit for doctor or, more likely, dental visits in a calendar year, book half your appointments in December and the rest in January. Take the Write-Off The IRS allows you to deduct medical bills that exceed 7.5% of your gross income. That's a high bar, but the list of eligible expenses is extensive, including insurance premiums, dental X-rays, fertility treatments, prescribed weight-loss and stop-smoking programs and even LASIK eye surgery. See irs.gov/publications/p502 for the details.
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