9 Strategies to Reduce Health Care Costs Today
U.S. health care policies such as the Affordable Care Act, Medicaid services, and Medicare promised to decrease health care expenditures, improve patient care, and the overall health and well-being of all Americans. And while more people than ever are eligible for coverage, it’s not clear that the current system has improved outcomes and lived up to its promise to reduce health care costs.
According to the Commonwealth Fund, 43% of adults under retirement age lacked health insurance coverage at some point during 2020. About 50% of this group also owed medical bills, reported problems paying bills, and faced other financial problems like damage to their credit.
Fortunately, actionable strategies to reduce health care costs are made possible by advances in medical knowledge, new technology, price transparency laws, “surprise bill” advocacy, and innovative software like price comparison tools. Here are the top 9 ways you can save on the high cost of health care.
1. Prioritize Preventive Care
Preventive care involves medical care, dental exams, interventions, procedures, and treatment designed to prevent disease. Reducing the likelihood of catastrophic illness and improving health outcomes is the most effective strategy for health care cost reduction. Even though the ACA requires that all health plans cover preventive medicine, most Americans miss out on these services.
Some of the leading causes of death in the United States are stroke, heart disease, cancer, and respiratory disease. With regular access to preventive care, chronic conditions like these are more likely to be discovered early when they can be treated or effectively managed. Proper management reduces ER visits and hospitalizations. Some common preventive measures include:
- Annual physical examinations
- Vaccines and immunizations
- STD prevention
- Contraception
- Annual gynecological care
- Dental cleanings
- Allergy medications
- Diabetes maintenance: home testing and insulin
- Cancer screening: colonoscopies, mammograms, tests for skin cancer
- High blood pressure testing and treatments
- High cholesterol testing and treatments
2. Negotiate a Lower Medical Bill
Collecting medical debt is an administrative cost that many health care delivery organizations would like to avoid when possible. This offers an incentive for health care consumers to negotiate lower prices. Use the Compare.com pricing tool to find the lowest prices on procedures nearby to get a baseline that you can use for bargaining.
If you can’t pay your bill or need a discounted rate, experts recommend taking these steps to negotiate a lower price:
- Do the research. A hospital’s cash prices are sometimes less than the fee-for-service they offer insurance companies.
- Be persistent. You may not be successful the first time you try.
- Contact the billing department to ask about a payment plan that fits your budget.
- Make sure your services are necessary.
- Ensure the doctors and facilities you plan to use are in your health insurance network.
- See if you retroactively qualify for financial assistance through the federal government.
3. Avoid Using Emergency Rooms for Non-Emergencies
Your local hospital emergency room (ER) is easily accessible because it is always open and won’t turn you away if you don’t have health insurance. This explains why millions of Americans make unnecessary ER visits every year.
But how bad could it be?
A UnitedHealth Group study found that an ER visit costs about 12 times more than primary care. For example, you might owe a hospital ER $2,200 for $167 worth of services at a clinic or doctor’s office or $193 for the same at an urgent care facility.
It’s tempting to misuse the ER when you need to be seen. But there may be better alternatives that fit your budget. If you don’t have the money to pay your out-of-pocket expenses for the doctor’s visit upfront, ask about deferred billing.
4. Look for a Free Clinic
Did you know that there are thousands of free and low-cost community clinics across the United States? Most offer health care services based on a sliding scale. At these clinics, the staff will calculate the amount that you can afford to pay based on your income.
Thanks to the Federally Qualified Health Centers program, you can expect the same level of care as you’d receive at a private health care delivery organization. The mandate of the FQHC is to “provide a set of comprehensive, high-quality primary care and preventive services regardless of patients’ ability to pay.”
Services available at some FQHCs include:
- Preventive health
- Dental services
- Mental health and substance abuse services
- Transportation services
- Hospital care
- Specialty care
5. Opt for a Telehealth Visit
Telehealth or telemedicine doesn’t work for every situation, but more often patients are using it as a way to lower costs and improve their access to care. One telehealth provider recently released data that suggests an average cost savings of $1,500. By avoiding the ER, patients saved at least $309. Patients using telehealth instead of a traditional doctor’s office visit saved $114 on average.
6. Shop for Cheaper Insurance on the ACA Marketplace
According to sources, more people qualify for federal government-sponsored insurance plans than ever before. The amount you’ll pay for health coverage depends on your estimated income. In addition, you may qualify for tax advantages that can reduce your health care spending even more.
It’s easy to preview insurance plans and prices on the ACA Marketplace. You only need to enter your ZIP code and your previous year’s adjusted gross income or an income estimate. If you answer a few more questions, including your date of birth, information about your household dependents, household earnings, and current insurance coverage, you’ll get the best estimates. Alternatively, you can skip ahead for general pricing. You’ll find popular providers like Blue Cross Blue Shield, Anthem, and Bright HealthCare.
The plan categories, Blue, Bronze, and Silver, indicate how much your share of costs will be. If you choose a plan with a lower premium, you’ll pay more out-of-pocket costs like the deductible, copay, and coinsurance. Higher premiums usually pay more of your covered expenses. All plans on the Marketplace must cover essential health benefits. On the site, you’ll also find tools to help you estimate your annual costs and see if your existing doctor is listed on your plan.
If prices on the Marketplace are too high, you may qualify for state-sponsored initiatives such as Medicaid and federal payers like Medicare. If you qualify for both programs, most of your health care costs should be covered.
7. Reduce Cost of Prescription Drugs
By buying generic drugs instead of brand-name drugs, you can save as much as 70%. Generics have the same active ingredients as the name-brand drugs they replace.
Not all drugs have a generic equivalent. Newer drugs are protected by intellectual property patents that prevent competition from generic drug companies. Once the patent expires, you can ask your doctor to prescribe the generic version.
If a generic drug isn’t available yet, you can apply for reduced-cost medication programs via the federal government or through a prescription drug company. These programs are usually based on income.
8. Dispute Incorrect Charges
Some estimates say that 80% of medical bills have charging errors. Plus, some health insurance companies deny claims for no reason. Thankfully, there are some steps you can take to ensure you don’t pay more than you owe:
- Inspect your bill. Go over your bill carefully. Compare the charges with a copy of your medical records. Look for inconsistencies, duplicate billing, and overcharging. You can compare costs using the Compare.com pricing tool for procedures.
- Check your insurance coverage. Download the explanation of benefits (EOB) document available on your insurance provider’s website. There, you can look up how much your insurance is supposed to cover for this expense. If you find discrepancies, file an appeal.
- Contact an advocacy agency for help. Starting in 2022, the government provides help for patients dealing with surprise bills or complaints about medical billing.
9. Use Compare.com to Price Shop
Compare.com’s price transparency tool lets you compare the costs of thousands of procedures before you book them. Knowing the exact amounts that health care providers in your area charge for a specific diagnostic exam, procedure, or surgery allows you to shop for the best prices and understand your financial obligation ahead of time.
You can also use this information to determine what your copayment will probably be based on your insurance and whether you’ve met your deductible.
