2008 Insurance Guide
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10 ways to save on health care costs

Even though your insurer's negotiated rates are likely to be lower than the hospital's list price, be sure to understand how your deductible and co-pay requirements affect your total out-of-pocket expense.

"If you see that procedure is $2,000, and your insurer pays 80 percent, you might assume that your 20 percent (out-of-pocket expense) is $400," says Jason Beyrouty, a director with Benefit Advisors, an employee benefit plan consulting firm in Salem, Ore. "But I've seen cases where employees forget to factor in their $500 deductible," so they have to pay an extra hundred dollars.

Even worse, it's possible that the $2,000 charge listed was in addition to the deductible, so the employee's total expense would be $900, not $400. The lesson: Learn to ask how deductibles and co-pays are calculated with respect to listed fees. Doing so may not lower your expenses, but it might prevent those expenses from being higher than you anticipated.

8. Ask for the Medicare rates

If you have no insurance or are otherwise faced with paying a hospital's list price, another negotiating strategy is to inquire about your hospital's Medicare rates. The government-funded Medicare program has prenegotiated fees that hospitals accept for certain medical procedures. It's likely that these negotiated rates are less than the hospital's listed rates, says Stewart. "Ask, 'What would you get for doing this procedure if you were getting reimbursed by Medicare?'" she says. "If you can get (the hospital) down to those rates, you're doing pretty good."

9. Go generic

Patients who are comfortable with their out-of-pocket deductible and co-pay amounts might still be in for a shock later on when they go to fill a prescription. "No one is going to be able to negotiate (pharmaceutical costs). The best cost savings result when people use generic (medicines) versus brand," says Cooper.

Cutler agrees. "Generic drugs are, in the vast majority of cases, exactly the same as brand drugs. So, if your doctor prescribes something for you, ask whether that drug is available as a generic," he says.

Another tip: "Make sure the drug your physician prescribes for you is on (your insurer's) formulary," says Cooper. The formulary is the list of drugs a health plan covers. If you don't have any prescription drug coverage, contact the Partnership for Prescription Assistance at (888) 4PPA-NOW to see if you qualify for an assistance program. The PPA serves as a national clearinghouse for programs that help patients who lack prescription drug coverage.

10. Sweat the small stuff

After you negotiate major services, pay attention to incidental costs that might add up on your hospital bill. If there are any toiletries that are not included in the price of your hospital room, bring them yourself. Also ask about using your own prescription medicine if you already have it on hand.

Taking cost-reducing steps ahead of time can eliminate unpleasant hospital bill surprises later. Nevertheless, remember that it is nearly impossible to forecast what the final bill will be. If there is a complication during your medical procedure, you'll obviously need more services and your charges could be higher than expected. However, if you believe your charges are erroneous, you will be in a better position to dispute them because of your familiarity with the services you selected.

As health plan premiums and out-of-pocket payments continue to rise, consumers will have to do more research and negotiating to get the medical care they need. Discussing costs upfront can help ensure that both you and your wallet remain healthy.

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