Reducing healthcare costs can have a massive effect on our overall financial situation. Even things like better understanding health insurance plans can be one of the key strategies to reduce healthcare costs by maximizing your benefits. And this article will show you exactly how you can do this, helping you save literally thousands of dollars.
After all, it’s no huge secret that healthcare is expensive. Between premiums, prescriptions and medical bills, it’s enough to deter anyone from seeking care.
As a former healthcare representative, I’ve seen and heard it all, but no one should neglect their overall well-being because they’re afraid of a large bill.
So here are tips you need to know!
Table of Contents
1. Always use an in-network provider
Before setting up your appointment, always make sure that your provider is in your network. Although they may advise that they “accept” your insurance that does not mean they’re actually in-network. This means that if your network is PPO, ensure your provider of choice is PPO as well.
Not sure which network your plan participates in? Look on your ID card or contact your plan directly.
Common networks include:
- PPO (Preferred Provider Organization)
- HMO (Health Maintenance Organization)
- EPO (Exclusive Provider Organization)
- POS (Point-of-Service)
How staying in-network can help with reducing healthcare costs
Higher reimbursements and lower deductibles
When a provider is in your network, your plan’s reimbursement rate is higher and the deductible (if you have one) is lower.
An example of this is an 80/20 plan with a 500 deductible. Once the 500 deductible is met then insurance reimburses at 80% and you are left with just 20% as the member responsibility.
But, if you go out-of-network, your plan’s reimbursement may only be 50/50 with a 1000 deductible, costing you a lot more.
In-network providers are contracted to accept an “allowance” for your services, and cannot bill for more than that amount.
This “allowance” is basically like a discount for staying within your network.
For example, let’s say you go in to get an MRI. The facility/hospital bills your MRI to your insurance plan with a price of $2000. Steep right?
However, the contracted allowance is only $800. If in-network, the facility must accept the pricing of $800, and write off the difference of $1200.
Now, you are only responsible for $800 if your deductible won’t be met.
On the other hand, if you went out-of-network, the provider doesn’t have to accept the allowance. Instead, they may “balance bill”. This is when a provider bills you for the difference (the $1200) between what they billed and the insurance’s allowance.
Now, you may be responsible for the whole $2000 since there’s no write-off!
And if you’re looking for strategies to reduce healthcare costs, that extra $1200 could really hurt.
How can I locate an in-network provider for my plan?
For help locating in-network providers, contact your insurance company or use your health plan’s provider locator by telephone and/or online portal.
If you cannot find an in-network provider in your area, inquire about a network exception. This is when you get services done by an out-of-network provider but insurance reimburses at the in-network level of coverage.
2. Verify your benefits before services are rendered
It’s frustrating when your health plan denies your claims. Then, you’re stuck asking yourself what’s the point of having insurance and you’re pissed beyond measure.
Many of us have been there, and don’t want to be back in that spot ever again – especially if we’re working on reducing healthcare costs.
If you are not certain that an upcoming service will be covered then don’t hesitate to contact your insurance carrier to verify your benefits.
Understanding health insurance plans can be hard, but when you’re paying off debt or barely making ends meet, a denied claim can derail your finances completely.
Verifying beforehand allows you to know which services are eligible and how your benefits will apply – making it one of the simplest strategies to reduce healthcare costs.
3. Use providers with their own practice and verify the place-of-service
I’ll come right out and say that some plans have deductibles that are ridiculously high.
If you’re someone that doesn’t go to the doctor’s office often, it can feel like you’re left paying for everything without the help of your insurance plan.
Luckily, there are still tips to help you with reducing healthcare costs, even if you don’t need the doctor all that often.
Most outpatient services are subject to the deductible, meaning that you have to meet the deductible first before insurance pays their share.
What is the point of a deductible?! To help keep the cost of insurance premiums down and to limit the number of unnecessary doctor visits.
If your plan has copays for office services, this most often means that insurance will make a payment regardless of if your deductible is met or not.
So instead of a $200 office service rolling over to an unmet deductible, which is member responsibility, you will just pay a copay upfront and insurance will pick up the rest. Take advantage of this super simple way to save money!
A provider with their own practice will have a clinic that is not associated with a facility. These providers are more likely to bill with an office setting, thus just collecting a copay.
To find out if you must meet the dreaded deductible first or if you will need to pay a copay upfront, ask your provider what place-of-service they will be filing on your claim.
Remember, although you went into the doctor’s “office,” that doesn’t guarantee your claim will be filed with an office setting, especially if the doctor’s office is located within a facility.
4. Save the ambulance ride for emergencies only
I’ve seen just how expensive an ambulance ride can be, and I better be one cough away from meeting Jesus before I allow myself to get in one.
Most ambulances are not able to be contracted with healthcare plans and, because of this, insurance policies opt to reimburse at the in-network level of coverage.
Although they are reimbursed as in-network, they are still not bound to a contract so you can be balance billed!
Let’s say you’ve already met your deductible and out-of-pocket for the year – but reducing healthcare costs is still high on your agenda!
(What’s out-of-pocket? It’s the maximum amount you have to pay for covered services. Your health plan takes 100% after this is met for all covered services until your plan renews).
Then you decide to ride in an ambulance and they bill $1800 to your plan.
(Well, “decide”. Unfortunately, one of the strategies to reduce healthcare costs can’t just be “don’t get sick”…)
Although reimbursing as in-network, insurance only pays up to an allowance of $800. The ambulance company decides that they aren’t going to accept the insurance payment as payment-in-full (some will).
So guess who’s going to get billed $1000? You!
But I met my out-of-pocket?! Sorry, Charlie.
If you are able to get to a nearby hospital safely with a non-life threatening condition, consider skipping the ambulance ride. Otherwise, the bill itself may cause a second trip to the ER!
Making understanding health insurance plans a possibly literal matter of life or death…!
5. Ensure that all services and prescriptions are necessary
Many people – even those looking for strategies to reduce healthcare costs – seek inadequate or unnecessary care due to not knowing what services are needed for their symptoms.
Consultation after consultation quickly adds up, even if you’re just paying a copay.
Never be afraid to ask if all medications and services are necessary.
Unfortunately, there are a few providers that will perform extra services for more money, especially after learning the deductible and out-of-pocket have been met, or to limit legal liability.
Also, understanding health insurance plans is key here. It will help you to ensure that your prescriptions are on your plan’s formulary so they are not denied.
Finally, to maximize your benefits and help in reducing healthcare costs, try sticking with the generic brands as healthcare plans see them as more cost-efficient.
6. Utilize care management and self-care programs
Did you know that understanding health insurance plans can actually get you free stuff?
Specifically, take full advantage of the free programs your plan offers to help you with managing your overall care and reducing healthcare costs.
Self-care programs and care management help to:
- educate you on how to distinguish if your injury or illness is minor or needs medical attention
- educate you on how treat minor symptoms on your own
- coordinate care
- find healthcare/prescription cost assistance
- manage conditions and much more
Along with this being one of the easiest strategies to reduce healthcare costs, utilizing these programs reduces the need for healthcare services and limits unnecessary visits.
More information can be found through online portals, newsletters, and your plan’s customer service number.
7. Take advantage of your preventive services
Many health plans have opted to pay for preventive (routine) services, such as annual physicals and bloodwork, with no cost to their members.
These services are designed to keep you healthy, thus reducing the need for pharmaceuticals, diagnostic services, and hospital care – and reducing healthcare costs for you overall.
Examples of preventive services:
- Colonoscopy screening
- Pap smears
8. Make it clear that your preventive visit is routine
Have you ever gone in for what you thought was a routine visit, but found out that something wasn’t billed as routine when you got a bill? Yep, you aren’t alone.
If you’re going in for a routine service then be sure to make it clear to your doctor that is the only reason for your visit.
Often times we can get chatty and mention a symptom which can prompt extra services to be performed.
Politely inform your doctor’s office that you only want routine services performed and billed. It’s a completely reasonable request and an easy way to help you in reducing healthcare costs.
If something is found during your routine visit, such as a mass during your mammogram, it may prompt the provider to submit your claim as medical.
Also, if you are experiencing symptoms that you want to discuss with your doctor then please do so, as strategies to reduce healthcare costs shouldn’t be at the expense of your health.
Just remember though that they may bill for those symptoms so there’s a chance that something will fall on member responsibility.
9. Use an urgent care instead of an emergency room
If you need medical attention and it isn’t technically an emergency, consider going to an urgent care instead.
Emergency rooms are undoubtedly crazy expensive, and a sprained ankle could wind up costing you thousands – not exactly the way to go if you’re working at saving money by reducing healthcare costs.
The hospital will file a claim for the use of the facility, the individual doctor will file a claim for the services he/she performed, if labs were drawn the lab will file a claim, if imaging was done and sent to be read the radiologist will file a claim, and… shall I go on?
With an urgent care, typically only one claim is filed and your health plan may only require a small copay for the services performed.
And the outcome for your health is exactly the same, showing that putting strategies to reduce healthcare costs into practice absolutely doesn’t have to be at the expense of your medical well being.
10. Check the allowance
The million dollar question everyone wants to know is: “How much will this service cost me?”
We want to know if we have enough on hand to handle the bill or if we need to make money fast to be able to afford the services.
Unfortunately for those of us looking for strategies to reduce healthcare costs, the answer is not so black and white.
A good way to find out how much a service will cost you is to inquire about the “allowance.” If the provider is in-network, the allowance will be the amount they are allowed to bill you for a service.
For example, if your doctor says they bill $1500 for an MRI, the allowance may only be $800. If your deductible is already met for the year and you have an 80/20 plan, then insurance will pay the first 80%.
This means that all you are responsible for is $160.
If the provider is not able to give you their contracted allowance, request the procedure codes they will be billing and see if your health plan can look the pricing up for you.
Summary of strategies to reduce healthcare costs
Your healthcare services don’t have to break the bank, but putting in place strategies to reduce healthcare costs, like understanding health insurance plans, is key.
That way, you’ll know exactly how to go about reducing healthcare costs so that you can maximize your benefits and prepare for future medical expenses.
About the author
Dyana is the untamed voice behind Money. Boss. Mama where she helps other women learn how to pay off debt and save money so they too can start calling the shots around here.