6 Ways to Reduce Your Healthcare Spending

Healthcare costs are skyrocketing! This guide was really helpful with some good suggestions on how to reduce healthcare spending.The cost of healthcare is a huge concern for many Americans. The average out-of-pocket expenses for health insurance are:

  • $1,081 per year for an employer-sponsored health coverage for a single person
  • $3,444 per year for individual coverage for a single person
  • $4,823 for family coverage in an employer-sponsored plan

Add in a 7% increase in deductible costs in 2014, and you see how big of a burden healthcare is for people now. However, there are several steps you can take to reduce your health insurance premiums and out-of-pocket costs.

  1. No Smoking- The Affordable Care Act (aka Obamacare or the ACA) allows insurers to charge non-smokers up to 50% more for the same plan. Count on insurance companies taking advantage of that fact. If you are a non-smoker, make sure you sign documents or complete tests to demonstrate that you do not smoke. If you are a smoker, check out incentive plans to quit.
  1. Get a high deductible plan- A high deductible plan offers lower premiums. The trade-off is you assume more financial responsibility for your routine health needs. If you are single and do not have any costly health conditions, you need to look into this type of plan.

Keep in mind, you are allowed by the IRS to pair a high deductible health plan with something called a Health Savings Account (HSA). An HSA allows you to make pre-tax contributions to an account that you use to pay medical expenses. Many companies contribute to employees’ HSAs to encourage them to select less costly high deductible plans.

  1. Ask for Generic Drugs and Discounts- Generic drugs, when available, save you up to 80% off the cost of brand name prescription drugs. Ask your doctor to indicate that a generic substitute is acceptable when he or she gives you a prescription. If there is no generic equivalent available, research to see if the drug company offers a discount program for the brand name medicine.
  1. Pick Preferred- More insurers contract with “preferred providers” or “preferred pharmacies” where the out-of-pocket costs are even lower than at in-network doctors’ offices and pharmacies. Make sure you ask an HR or insurance plan representative about this feature. You do not want to throw money away going to one provider when another one that is just as convenient is more affordable.
  1. Use Birth Control (and other Preventive Services) – Insurance plans now cover certain drugs and procedures without co-pay or co-insurance. For young couples, birth control is an important preventive service. Health insurance plans must cover certain forms of birth control, including sterilization for women (not for men). Make sure you take advantage of these services. Unplanned pregnancies are costly.
  1. Negotiate, negotiate, negotiate – The costs of procedures varies widely. Unless you receive a referral that entails minimal out-of-pocket costs, call different labs and compare prices. If you like a doctor that is now out-of-network, ask him or her if you can get a discount for services. Doctors sometimes negotiate deals for past patients.

A Little Effort Goes a Long Way

Budgeting for healthcare expenses is difficult because you never know whether you will remain in good health. However, a little research and negotiation goes a long way to reducing your costs. As always, never pay a penny more than you have to for any product or service.

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