With a number of programs available to help low-income families receive discounts on their insurance, healthcare is becoming more affordable than ever – for some people. Middle income earners are being required to make tough decisions. While millions of people qualify for tax credits that reduce their premium costs each month, millions more struggle to keep up with health insurance premiums that get higher each year and premiums are not the only expense to consider.
In addition to paying a monthly premium for insurance coverage, millions of individuals must also meet expensive deductibles and co-pays before their plan will start kicking in. Once the deductible is met, co-insurance kicks in till you reach the max out of pocket. At that point you will have nearly 100% coverage. Most plans will still have some copay for doctor’s visits and prescriptions. Take the example of a 50 year-old man who earns about $32,000 per year. This man purchases a health insurance plan through the private marketplace and ends up spending about 28% of his monthly income if he reaches max out of pocket for the year. This includes premiums, deductibles, co-payments and prescriptions (and other forms of cost-sharing.) He must continue to make these payments until he reaches his plan’s out-of-pocket maximum, something that relatively few people who have health insurance ever do.
Keeping this story in mind, you may be wondering whether it is worth it at all to even have health insurance. After all, the tax penalty can be less than paying all of those premiums and out-of-pocket costs. The tax penalty for 2015 is $325 per adult or 2% of income. While it may seem like forgoing an insurance plan is the right decision if you are looking to save money, it will probably end up costing you money in the long run. And more significantly, shorten your lifespan. While some health insurance plans have high deductibles and require you to pay a copayment when you receive treatment, plan deductibles and out-of-pocket maximums will be significantly lower than the total cost of certain treatments if you were to get them while uninsured.
Think about this — if you have a chronic illness for which you receive weekly or monthly treatment, your healthcare costs will add up very quickly. CDC, centers for disease control, as of 2012, about half of all adults — 117 million people — had one or more chronic conditions. One out of four adults had two or more chronic health conditions. Seven of the top 10 causes of death in 2010 were chronic diseases.
Well, do you feel lucky? If you are young, you are probably still feeling invincible. Client Mike contracted Lymphoblastic Leukemia and had 1.6 million in claims in 2014.
If you do not suffer from a serious illness yourself, you probably know someone who has. Do you know anyone who has cancer? Or diabetes? Or cystic fibrosis? People with serious diseases like this often pay exorbitant costs for medical care, if they don’t have insurance. According to NerdWallet.com, one in five Americans struggle to pay for medical bills each year. In fact, 1.7 million Americans declare bankruptcy each year due to their inability to pay medical bills — this figure outnumbers bankruptcies from credit card bills and unpaid mortgages. If you have health insurance your maximum yearly cost is between $6,250 and $6600 each year. This by itself will not force bankruptcies for most people.
Although health insurance has become more readily available with the passing of the Affordable Care Act, there are still millions of Americans who struggle to pay their medical bills. According to a survey conducted by the U.S. Government, out-of-pocket healthcare expenses reached an average of $3,301 per year per household, a sum that is up from $2,500 in 2009. What many consumers do not realize is that they have some control over their out-of-pocket expenses. While the plan may require you to pay a certain copayment and to meet a deductible before they start offering coverage, there are several things you can do to reduce your out-of-pocket costs after that point.
The best thing you can do to reduce your out-of-pocket costs is to take control of your health insurance plan —
• Understand your plan benefits to make sure that you get the treatment you need without paying extra for it. Make sure that the doctor you see is within the network.
• Take advantage of Free Preventive Care
• Get referrals for specialist visits, if your plan requires them. Even if you are required to stay within a particular network, you still have some freedom to choose a provider.
• If you know that you need a particular treatment or service, do some research to find out the details of what is involved in that treatment and find a provider that will offer you the lowest price.
• Even after you choose a provider, you still have some options to lower your out-of-pocket costs even more. Speak to your provider (or the billing office) about negotiating the price of your bill. Medical providers offer deep discounts for health insurance companies, so they may do the same for you? See if you can negotiate a discount for paying upfront or for paying in cash. If you can’t cover the total cost of services out-of-pocket at once, ask about setting up a payment plan. Most providers are happy to offer their patients a payment plan if it means they will make regular payments.
• Consumerism. Get the best value. Compare doctor grade with specific cost. Tools like the FH Consumer Cost Lookup and Healthcare Bluebook allow you to look up the average price in your area for certain procedures so you can shop around for the lowest price.
• Shop around for the best prescription prices — do not just assume that your local pharmacy has the lowest rate. Go for generics when possible and ask your pharmacist what the cash price would be for prescriptions and compare it to the rate you get with your insurance. Consider Walmart, Target, Walgreens, Sam’s and other discount outlets. Consider Rx by mail.
• Look at telemedicine. Some carriers have this option within their plans. Stand alone options are increasing in supply to fill current needs. Over 70% of ER, Urgent Care, and Doctors visits can be handled safely and effectively over the phone.
• Take control of your health. Ask yourself — Am I in shape? Could I be in better shape? Do I follow a healthy diet? What can I do to become healthier? Think about it – the healthier you are, the less medical care you will need and the lower your medical bills will be. If you stay healthy, you also spend less time away from work, which is lost money.
• Consider and compare the purchase of HSA qualified health plan with current plan. HSA plans are eligible for tax free contributions. Interest earnings are tax free. Employers and owners of account are eligible to contribute to the account.
• Healthcare-specific line of credit. You may be able to get a payment length up to 18 months with no interest or a term up to 60 months with interest.
• Go to dentist and get your teeth cleaned. Oral health is a window to your overall health.
• Work with your health insurance agent to confirm carrier bills are correct. Ask them to review for accuracy. Yes, providers make mistakes. Insurance carriers make mistakes.
Taking control of your health insurance plan is the best way to reduce your out-of-pocket costs and it starts with choosing the right plan. There are many different health plans available to choose from. Select the one that provides the coverage you need at a price you can afford. Before you buy a plan, make sure to think about what kind of treatments you expect to receive throughout the year so you can make sure that you will be covered. The more you know about your plan before you select it, and the better you understand how to use it, the less you will have to worry about out-of-pocket costs.
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Country: United States