Health care costs continue to rise each year as consumers face higher insurance and out-of-pocket costs for medical treatments and procedures.
Half of U.S. adults said either they or a family member delayed or omitted a health care procedure or dental care during the past year, according to a 2019 Kaiser Family Foundation study. Three in 10 of adults also said they did not take their prescribed medication because they could not afford them.
Medical bills continue to have a large impact on household budgets and 26% said either they or a member of the household faced problems paying a medical bill. Even people who have employer-sponsored insurance coverage are dealing with the same financial issues, such as , health care and paying for medical bills.
Saving money on medical costs starts first with better cost transparency in the healthcare system, said Nancy Reardon, chief strategy and product officer at Maestro Health, a Chicago-based health plan management platform.
“Surprise bills and high premiums have become the norm for many Americans and we’re likely to see these costs increase over the next year or so, making healthcare even more unaffordable for many people," she said. "The high cost of care is what turns people away from seeing their primary care doctor, replacing them with a visit to a minute clinic instead, or postponing care until the condition worsens and they’ve landed in the ER.”
Saving money on health care costs continues to be challenging, but consumers can cut costs by shopping and buying the right insurance plan. Choosing the right plan during open enrollment is important.
If You Have Health Insurance, Here’s How to Cut Costs
Do you need specific doctors for treatment and are in your network? If your plan does not cover your preferred doctors, you could wind up paying more money to see your doctor out of network, said Anthony Lopez, vice president of operations for eHealth, an online health insurance exchange based in Santa Clara, Calif.
Will your plan pay for prescriptions? Another factor to consider is if a plan will pay for the prescription drugs you use on a regular basis.
“The specific drugs covered can vary from one plan to another, as can the out-of-pocket costs associated with picking up your prescriptions,” he said. “Finding the optimal plan for your prescription drug needs can potentially save you hundreds of dollars each year.”
Some health insurance marketplace providers like eHealth have simplified the process. Consumers can enter the names on their website of their preferred doctors to see which plans they accept along with the names of their prescription drugs to see which plans in their region cover them at the most affordable out-of-pocket cost.
Don't just pick the plan with the lowest monthly premium. Don’t be lured by lower monthly premiums — consider the deductibles as well as other out-of-pocket costs, since they can add up to be thousands of dollars for a household, depending on how much you use the plan.
Typically, the lower your monthly premium, the higher your total out-of-pocket costs when you receive care, Lopez said. Conversely, plans with higher monthly premiums typically come with lower out-of-pocket costs.
“Consider the whole picture on costs,” he said.
If you’re relatively healthy, young, see the doctor rarely and don’t take prescription drugs on a regular basis, you could “do very well on a plan with a lower premium and higher out-of-pocket costs,” Lopez said. “It may save you money compared to your higher-premium choices. Just make sure you could pay out your full deductible in case of an unforeseen illness or injury.”
On the other hand, if you have a chronic condition like diabetes, high blood pressure or asthma, think twice before choosing the plan with the lowest premium. Instead, consider how often you see the doctor and the number of prescription drugs used.
“By choosing a plan with a higher premium but significantly lower out-of-pocket costs, you could actually save a lot of money over the course of the year,” he said.
Here are some other ways to save money on medical care when you have insurance:
- If buying coverage on your own, see if you qualify for government subsidies under the Affordable Care Act (ACA), which can reduce what you pay toward your monthly premiums significantly.
- Stick with medical providers within your network
- Make sure any specialist your primary doctor refers you to is also in-network with your insurance company
- Choose generic drugs rather than brand-name drugs whenever it is an option
- When you need non-emergency care right away and can’t see your regular doctor, visit an urgent care clinic rather than the emergency room
- If you enroll in a less costly high-deductible health plan but aren’t sure you can afford the annual deductible in case of accident or injury, consider a GAP plan as a supplemental form of coverage to help you pay your deductible in a worst-case scenario.
What You Can Do if You Don't Have Health Insurance, or It's Too Expensive
If you've lost your insurance, or are struggling to pay premiums and bills, you still have options.
You May Qualify for Health Insurance Subsidies
Many low-income consumers qualify for subsidies for health insurance. The ACA provides subsidies to people earning less than 400% of the federal poverty level or about $51,000 for a single person or $105,000 for a family of four.
Depending on your income, these subsidies can make what you pay toward your premiums surprisingly affordable, often less than $100 per month.
“Don’t assume you can’t afford coverage,” Lopez said. “Work with a licensed agent or your state’s health insurance marketplace to find out if you qualify for government subsidies.”
You Can Enroll in a Subsidized Plan if You Lose Your Job
People who lost their employer-based coverage through a layoff have 60 days to sign up for a new plan under the ACA. The loss of a job is considered a qualifying event for open enrollment. While COBRA coverage is an option for many people, it is expensive and often the coverage is broader than what some people need for their healthcare.
“With millions of Americans out of work, lots of people are losing their employer-based health insurance,” he said. “Under the ACA, loss of employer coverage gives you a 60-day window in which to enroll in an ACA-compliant health insurance plan and apply for subsidies. Take advantage of this!”
Some states like California and New York are currently allowing anyone affected by the coronavirus crisis to sign up for coverage now, even if their former employer did not offer them coverage.
Individuals can also qualify for Medicaid, depending on your income and the rules that apply in your state.
You Can Pay Cash
People who lack insurance coverage can still save money by telling their doctor they will be paying cash, which is a term used for people who do not have health insurance or opt not to use their coverage.
Doctor offices, clinics, and hospitals are used to accepting a discounted rate for medical care rendered to people who have insurance, Lopez said. Shop around with different doctors or clinics - let them know you will be paying cash and ask for a discount and an estimate of your costs for the services you need.
“They will often offer people paying cash a significant discount from the full price too,” he said.
An HSA Can Help Budget for Health Care Costs
One way people can lower their healthcare costs is to open a health savings account (HSA). By putting pre-tax money aside for qualified medical expenses, including deductibles, copayments, coinsurance and other expenses, this money can help people “cover unexpected medical events and avoid higher bills down the line,” Reardon said.
“HSAs also have major benefits for people with chronic illnesses or those who want to save money on a pre-tax basis for things like prescriptions and contact lenses,” she said. “By providing more autonomy over how the funds are used and what is covered, HSAs can save you money on health services in the long run.”
How to Save Money on Prescription Drugs
Consumers should use free discount cards like GoodRx and ScriptSave and compare drug prices at several pharmacies - the same prescription can be much cheaper at a smaller pharmacy compared to one at a national one.
“RxSaver By RetailMeNot is a free program that helps you see prescription prices at nearby pharmacies,” said Sara Skirboll, shopping and trends expert from RetailMeNot, an Austin-based digital coupon company. Just search for the drug name and the site will show you prices for your neighborhood. Select your pharmacy's coupon and present it at purchase to save up to 80% on your prescription right on the spot.”
Many pharmacy chains charge extra for delivery, but many major pharmacies are offering free home delivery due to the coronavirus pandemic.
“You can still use prescription coupons like those offered by RxSaver for these deliveries as pharmacies are processing payment and coupon details by phone,” she said. “Call your local pharmacy to determine whether free delivery is available for your medication.”
Another way to slash costs is to ask for a 90-day prescription instead of a 30-day one. This option will depend on what your health insurer allows.
“Patients who take medications on a recurring basis may be able to save money,” Skirboll said. “Think of it as buying in bulk, just with your medicine.”