7 Ways to Save Money on Healthcare

When you're shopping for a new appliance, you probably read customer reviews and compare features and costs to decide which one is right for you. You can use this same process to save money on healthcare costs. 

Shopping around for the right health insurance and searching for ways to reduce your out-of-pocket costs could help you get the care you need at a price you can afford. Here's a closer look at seven steps you could take to save money on healthcare costs this year and beyond.

1. Compare Health Insurance Plans

Your health insurance plan has a significant effect on how much you pay out of pocket for medical expenses. Each plan has its own rules about which providers, medications, and treatments it covers, along with its own set of costs. Here are some helpful terms to know:

• Deductibles are the amount you must pay out of pocket before the insurance company pays anything. 

• Copays are a percentage of the total payment you must pay after meeting your deductible. 

• Premiums are the monthly costs you pay to keep the policy in force.

When shopping for health insurance, it's tempting to focus exclusively on costs, but this could backfire. If you choose a plan that's affordable but doesn't cover the services you need, you may have to pay for these entirely out of pocket. Focus first on essential coverage options before looking at the price. You also want to make sure the providers you normally work with are covered under the insurance plan.

For most people who don't get health insurance or use the COBRA option through their employer, shopping for new health insurance happens during annual open enrollment, which usually runs from Nov. 1 to Jan. 15 each year. This lets you choose your coverage for the following year. You can view available plans at Healthcare.gov.

You may also qualify for special enrollment periods due to a major life event, like changing jobs, becoming unemployed, getting married, or having a child. If you're eligible for one of these, you can switch your health insurance plan outside open enrollment.

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2. Choose The Right Providers

Choosing the right care providers could also help you save money on healthcare. Some hospitals and doctors charge more than others. If you need a specific treatment and it's not an emergency, you can shop around with a few different providers.

Stay within your health insurance provider network when possible to keep your costs down. Visiting doctors outside the network aside from emergencies could mean you’ll pay a larger amount out of pocket. You can reach out to your health insurance provider if you're not sure which doctors are within its network.

If you need a specialist, check whether your plan requires you to get a referral from your primary care physician. Health maintenance organizations (HMOs), a common type of health insurance plan, usually do this. If you don't get a referral first, your insurance might not cover the specialist visit and that could lead to medical debt and you needing debt relief down the line.

Another type of health insurance plan is a preferred provider organization (PPO). These plans typically don’t require referrals before seeing a specialist. However, they tend to have higher monthly premiums than HMOs.

3. Check Bills And Statements For Errors

Billing errors can and do happen, and unfortunately, it's usually up to you to correct these errors. Always check your bills and statements to ensure they display the correct amount (which can be confusing) and cover what your policy says they should cover. Errors are often just an honest mistake, such as using the wrong code or patient number, but they can take time to correct.

You generally get a preliminary statement from your insurer, known as an explanation of benefits (EOB), that causes sticker shock, but often your insurer ultimately will cover a lot  of it. The EOB should explain what’s covered and what’s not, which can help you figure out if a mistake has occurred.

If you’re certain there’s a problem with your bill, address it as soon as possible and remain vigilant. And if you're not sure whether there's been an error, it doesn't hurt to reach out to the provider to double check. If you're right, you could save yourself money. Consider enlisting the help of your insurer—they’re knowledgeable and generally willing to work with you. 

4. Take Preventive Measures And Create Healthy Habits

Some of our health outcomes are determined by family history and genetics, it’s true. But there's quite a bit you can do to ensure better health and save money on healthcare. Health insurance providers must cover certain screenings without any out-of-pocket costs. That includes obesity screening and counseling, most vaccinations, certain kinds of cancer screening, and depression screening. Prevention also includes taking your prescribed medications regularly and getting proper care for chronic illnesses and conditions, such as high blood pressure and diabetes.

We’re stating the obvious here, but eat a healthy diet, exercise regularly, get enough sleep, and manage stress. Many insurers and employers offer wellness programs to help you create healthier lifestyle habits. Some may even include discounts on gym memberships and other money-saving perks. Find out. These freebies now could help you live longer and healthier. 

5. Ask For Generic Drugs

Generic medications have the same active ingredients as name-brand drugs, often at a fraction of the cost. There is no health risk to choosing the lower cost option.

If a particular generic drug isn’t available and your insurer doesn’t cover the name-brand version, ask your doctor to get prior authorization from your insurer.

There are a few more ways to try to save money when you get your prescriptions filled. Some large retailers, such as Costco and Target, offer discounted drugs. You can also find coupons on prescription drugs through sites like GoodRx.

6. Enroll In A Health Savings Account (HSA)

If you have a high-deductible health insurance plan (HDHP), as defined by the IRS, you can open a health savings account, or HSA. This is a tax-advantaged account that you could use to help pay for qualified healthcare expenses, such as your deductible and copays. 

An HSA allows you to deposit money pre-tax. That means that saving in an HSA helps you lower your tax bill now. 

If you withdraw the money for qualified medical expenses, you won't owe any taxes on it at all. If your HSA is in investments and your balance grows, that growth is also tax-free. 

HSA money can be used on a broad number of products and services, including:

• Dental care, including orthodontia

• Eye exams, glasses, and contact lenses

• Feminine hygiene products

• Birth control

• Sunscreen with an SPF of 15 or higher

• First aid products

Some employers offer contributions to their employees’ HSAs. If you don’t use the money that was deposited in your HSA, the money can stay in the account from year to year. If you leave your job, the account comes with you. 

If your employer doesn’t offer an HSA, you can open one on your own. If you’re self-employed and have a health plan with a high deductible, you can open an HSA. 

7. Be Your Own Advocate

After you select your health insurance plan and follow every other step to save money on healthcare, it’s smart to stay on top of your care and ask questions frequently. Health insurance companies and many service providers are businesses, but positive health outcomes don’t always require expensive treatments or procedures. Here are some areas where you may need to learn how to advocate for yourself.

Billing

Don’t hesitate to raise concerns about billing errors, and definitely keep an eye open for false claims as well. Although a much rarer occurrence than a simple mistake, billing fraud does occasionally take place. You can report suspected acts of insurance fraud to your state insurance department. 

Be on the lookout for balance billing, which is far more common. Balance billing happens after you’ve paid your deductible, coinsurance, or copay and your insurance company has also paid everything it’s obligated to pay toward your medical bill. If there's still a balance owed on that bill and the healthcare provider is asking you to pay that balance, you’re being balance-billed. 

In-network providers can't bill you for the balance when they’ve agreed to accept the negotiated rate set by the health insurer, as long as you’ve already paid your copay and/or coinsurance. Call your insurer if you’re uncertain about a bill.

Care

Learn to advocate for yourself in healthcare matters, whether it’s at the point of care or with billing. You have the right to check with your insurer about billing costs. You wouldn’t hesitate to ask a car dealer about price and product issues, and healthcare is no different. When in doubt, ask questions. For example:

• Do I need this procedure, medication, surgery, or therapy? What are my options?

• How much will I pay out of pocket for this treatment?

• Can I negotiate a lower price or a payment plan?

• Is there a discount for paying cash?

• What are the likely outcomes for this course, and are there other cost-effective treatments?

You might not think of this as a path to saving money on healthcare, but it's wise to find a doctor who listens to your concerns and questions, so you can advocate for the best care possible. If your current doctor isn't the right fit for any reason, look into your options and find a doctor who is.