insurance

Paying out-of-pocket health care costs

"People aren't used to shopping around when they need an MRI, but they should," says Findley. "There is no substitute for getting on the phone and calling around. Most people are intimidated by this process, including myself. It's intimidating because you may not know exactly what you need."

But such efforts can be rewarding in obtaining cheaper care, which studies have shown is generally not linked to lower quality care, he says.

"Health care pricing is mercurial and illogical in a lot of ways and is more or less according to what the provider can get away with," says Findley, who adds that price tends to vary by region as well.

Learn to negotiate health care prices

Armed with price information, you can then negotiate. If your preferred provider is more expensive than another provider in your area, try to get the preferred provider to reduce the price to the lower level. Also, if you can pay upfront, you have more leverage to get the price reduced further. The health care provider might work with you in exchange for avoiding the uncertainty and delay of collecting funds from a patient.

Red Gillen, a consultant with Celent Inc., a research and consulting firm in New York, and author of a report on health care financing options, believes that high default rates for care that consumers pay for directly have pushed providers to be more receptive to alternative payment plans such as paying upfront or over time.

"The fact that 50 percent of these types of accounts aren't (able to be) collected by providers opens up opportunities for discussions and negotiations," Gillen says.

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When you go in for a test, procedure or doctor's appointment, call in advance and make your financial situation clear. If you are paying out of pocket and don't have the funds to pay upfront, inquire about payment plans or health care financing.

Pay with a health care credit card

Health care providers, especially hospitals, are encouraging patients to discuss payment options through financial counseling, says Douglas Braun, president of Internet Payment Exchange, a Toledo, Ohio, company that supplies Web-based electronic billing to health care companies. Financial counseling takes place when you are admitted to the hospital or check in for a test or other procedure and usually includes discussions about the likely cost and payment options.

Here are the typical options for paying out-of-pocket expenses:
  1. 1. Traditional credit cards. Consumers have used traditional credit cards for years as an ad-hoc health care financing method. But with credit card issuers squeezing consumers with higher rates and slashing balances, greater credit card debt isn't an option for many consumers. If it is, be sure to compare the costs of putting health care expenses on your credit card with other financing options.
  2. 2. Health care credit cards, including GE Money CareCredit and ChaseHealthAdvance, are a health care-specific line of credit. You apply through either GE or Chase or your doctor's office. If you are approved, you decide the length of the payment plan you want. Those that run from three to 18 months carry no interest charges as long as bills are paid on time, while those running from 18 to 60 months carry interest rates of 13.9 percent or higher.

Both card programs mainly target elective procedures such as cosmetic surgery and vision correction.

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