Ways to Cut Your Health Care Costs

One area where you might be able to trim health-care costs is in medications. Many employers are offering financial incentives to encourage the use of less expensive drugs. In fact, nearly nine out of 10 workers are now in some kind of a plan that has a tiered cost-sharing formula for medicines.

The way these work is that there is one co-payment for generic drugs. Then, there is usually higher co-pay for preferred, brand name drugs such as Claritan or Levatol for which there is no generic substitute, and even higher co-pays for non-preferred drugs.

Be sure to always check with your doctor or pharmacist to see if there is a generic substitute before filling a prescription. Generics generally cost 30 to 70 percent less than brand-name drugs with an average co-pay of just $10 vs. $33 for a brand name, non-preferred drug. If there is no generic equivalent to the drug you have been prescribed, ask your insurer or company HR department if there is a substitute drug that would cost less under your health plan.

Take advantage of a Flexible Spending Account (FSA)

An FSA allows you to deduct money pretax from your paycheck to cover out-of-pocket medical expenses. The good news has gotten even better, too, as the list of expenses you can pay using FSA dollars has been expanded dramatically. In fact, the list now includes most over-the-counter drugs, and new services that make it easier to spend down your account. Yet, despite all the many benefits of FSAs, only about 20 percent of eligible employees current take advantage of them.

While contributions vary by employer, you can often contribute as much as $5,000 per year. Given this, you’ll save as much as 30 percent on your Federal Income Tax. Naturally, this will vary depending on your tax bracket.

You can use FSA dollars to pay insurance deductibles and co-pays, and for such un-reimbursed expenses as acupuncture, contact lenses, flu shots and LASIC surgery. You can find a list of eligible items at irs.gov.

Be sure to ask your HR department about the availability of an FSA. You can only elect to contribute to an FSA for a particular calendar year during an open enrollment benefits time or if you’ve had a life-altering event, such a marriage or the birth of a child.

Fight overcharges

Nobody’s perfect, including doctors and hospital billing departments. Billing overcharges can occur and they cost you literally thousands of dollars.

Consider the case of one patient who received a bill for $15,333 for 49 vials of Pepcid. The correct amount: $317. Typos like this can happen and, as you can see, can be very costly.

Keep a list of all any lab tests, medications, procedures and specialists seen during an illness. Then, do not pay any bills until you see itemized statements. Check these statements against the list you kept to spot common errors such as incorrect dates of service and duplicate or incorrect orders for medication. In the event you find an error, call the hospital’s or doctor’s billing department and your insurance company to get the mistake corrected.

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