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Cutting Down on Health Care Costs

Guest post by J.D. Roth, author of Your Money: The Missing Manual.

Few things can blow a budget like unexpected medical bills. Even if you save and invest, your financial plans can be smashed to bits by unforeseen health problems. And for those who don’t have their finances in order, a medical crisis can be devastating. (In fact, research by bankruptcy expert Elizabeth Warren has shown that medical crises are the leading cause of bankruptcy in the U.S.!)

Leaving aside the recently-enacted health-care bill, if you have medical insurance, there are three steps you can take to make sure you’re not paying more than you have to:

1. Understand your insurance.

Insurance rules can be confusing. Take the time to read your policy to be sure you grasp the basics. At the very least, know how your plan works in the case of emergencies. Any time you have a concern about coverage, call your insurer and ask questions.

2. Read your bill.

Don’t assume your medical bills are accurate. Take the time to read them, and ask questions if something seems wrong. (When I had knee surgery six years ago, I was double-billed for one part of the procedure.) Nobody cares more about your money than you do, so take charge of the situation.

3. Strike a deal.

Always ask for a discount. Some places will offer them and some won’t, but it never hurts to ask. You may be able to save big bucks by picking up the phone and negotiating with your provider’s financial office — even if you’re insured. If they do agree to reduce your bill, be sure to get the details in writing.

But what if you don’t have medical insurance?

That situation’s more complicated, though the recent health bill may make things a bit easier. (Whether that’s a good thing or a bad thing isn’t the point of this article.) For now, you can find quick advice via three online articles:

Saving on prescription drugs is more clear-cut.

Here are some great ways to save at the pharmacy:

  • Use older remedies. Don’t let flashy ads for new drugs fool you. In many cases, the most effective choice is a tried-and-true medication that’s been on the market for years. The drug companies are motivated to sell you the new stuff because they make more money from it.
  • Buy generic. When a drug patent expires, other companies can make similar products to compete with the original manufacturer. This increases competition and drives down prices. Generic drugs are just as good as their name-brand counterparts. The FDA states that all generics have to offer the same dosage, safety, strength, quality, and performance as the “real thing”. (Here’s a place to read more about generics.)
  • Shop around. Don’t assume that the price of a given drug will be the same from store to store. This isn’t always the case. In fact, Stephen Dubner at the Freakonomics blog reports that sometimes the price differences can be extreme. He cites one case where Walgreens was charging $117 for 90 tablets of generic Prozac while Costco was charging $12.
  • Look for discounts. Believe it or not, you can find coupons for prescription drugs. Before your next trip to the pharmacy, do a quick Google search for coupons and rebates. (Or you can usually just go to drugname.com.) You won’t be able to find a discount for every drug, but if there’s a lot of competition in a product category, you can sometimes find a good deal.

If you need more info on the costs and benefits of various prescription drugs, visit these sites:

  • Consumer Reports Best Buy Drugs is a free web site that lets you search for drugs by category and offers tips for managing your prescriptions. (You can download a PDF that explains their advice for getting the best prices.)
  • Check out WorstPills.org. It is a subscription-based site from Public Citizen, a consumer watchdog group. As you might guess from the site’s name, WorstPills.org aims to warn consumers about possible side effects from various prescription drugs (and drug combinations).

Putting theory into practice

Enough theory! It’s one thing to talk about this stuff, and another to actually do it, right? How well do these methods really work? I recently had a chance to find out.

For the past decade, I’ve suffered from allergies every spring. Like all members in my family, I’ve been reluctant to see a doctor about the problem. This year, however, things became unbearable; I could hardly function during the say. So, I decided to see an allergist. After some testing, the allergist informed me that I was allergic to nearly every tree in Oregon. “Trees are your enemy,” he said. Yikes!

To help ease my suffering, he prescribed anti-histamine eye-drops, two types of nasal spray, and Claritin-D. (Claritin-D is prescription-only in Oregon.) When I went to the pharmacy to have my prescriptions filled, the first thing I did was ask if there were generics that could replace the drugs the doctor had ordered. In this case, there weren’t. That’s too bad because two of the drugs — Astepro and Pataday — were expensive and my insurance didn’t completely cover them. I called my doctor and explained the situation. He was very sympathetic, and he did some research for me. He found discounts for both products: a maximum $15 co-pay on the Astepro, and a $40 rebate for the Pataday.

Next, I uncovered coupons for Claritin-D and for Nasonex. Voilà! By practicing what I preach, I was able to save $75 on medication with very little effort. Plus, I know what to do next time I have these prescriptions filled.

Don’t forget the best way to save money on medical costs

Stay healthy. Although it sounds trite, your health is your most important asset. Regular exercise and a proper diet reduce the risk of many diseases and improve self-esteem, both of which will help with your pocketbook.

J.D. Roth writes about sensible personal finance at Get Rich Slowly. To learn more smart ways to manage your money, pick up a copy of his first book, Your Money: The Missing Manual, now in stores. It contains tons of tips for saving (and making) money. This is an extended version of one section from the book.

photo credit: Michael Flick

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43 Comments

  • JLR says:

    This posting couldn’t have come at a more appropriate time! I just lost my health insurance because I turned 25 years old and was dropped from my parents plan (I am a full-time student). Even though Obama’s law is supposed to extend coverage, it doesn’t go into effect yet and my health insurance company used that as a loophole to save some money. Anyway, I need medicine every month for severe migraine headaches and called a few pharmacies to see what the price would be without insurance. They wanted to charge me $178, $232, etc (for the generic). I was very upset, as I am student w/ very little money. I did an online search and heard that Costco had good prices. Lo and behold I called and they charged 20.33 for the SAME THING. On top of that, I got a discount for being a Costco member! It just goes to show you that you really do need to actively research to save money and in this case it was a lotttt of money!!

  • chelsea says:

    When our son was born in 2008, our bill from the hospital after deductible was about $4k. We’d been planning to just pay it down month by month until it was paid off. I was on the hospital website when I spotted a section about financial assistance. I emailed the person, and after submitting a tax form from the previous year, they agreed to cover the entire bill. Crazy!! I’d never heard of this before, but apparently we fell into a certain bracket because of our income (4 people living on $$$) and were instantly qualified for assistance. Never hurts to ask, like she said!

  • Lyn says:

    JD — Claritin D is just loratadine and pseudoephedrine. Loratadine should be over the counter very cheap. And the pseudoephedrine I understand is by Rx only in Oregon. But by splitting them, and only using the decongestant (pseudoephedrine) only when you are stuffy, you might be able to save even more. Just a thought. Good luck getting those allergies under control!

  • Christina says:

    Sam’s Club and Costco usually have the cheapest prescriptions if you are paying out of pocket. Even if you aren’t a member, legally they have to let you fill your prescriptions with them. (I don’t know what the reason is behind that, but I do know I have heard that in more than one place.)

  • sarah says:

    Check your insurance coverage for mail order options, mine offers 4 generic fills a year for free per patient and $65 for name brands meds– and this is for 3 months worth of meds. I’m not sure what the cost is for extra generics since my husband and i only have one each. So those end up being free for the year and his name brands end up equaling 3 months for the cost of 2 at the local store. Ours shipping relatively quickly and can be refilled by hitting a button on their online store.

  • Courtney says:

    I was also going to mention Sam’s Club. Their store-brand Claritin-alternative (Member’s Mark) is very cheap.

    My husband has nasty spring allergies and what really helps him is using the neti pot and changing clothes and rinsing his hair every time he comes in from outside.

  • britni says:

    For those of you with severe allergies… try taking a teaspoon of LOCAL honey every day. My hubby did this at the suggestion of his chiropractor and went from taking 6+ benadryl per day to 1 or 2 only as needed. Big help and BIG savings!!!

  • Lauren says:

    I started taking Claritin D when I was 15. I’m now 27, and I hate that I’ve taken it for 10+ years. I found that I need to spit a lot (gross), and my hubby did some research and found that thickened mucus may be a side effect of Claritin D. That, combined with my desire to use more natural solutions, led me to search for other options. I recently tried eating local honey, but that didn’t really do anything. Many people told me they swear by using a NetiPot, but I didn’t want to. I finally gave in, and it’s made a big difference! I didn’t last night because I was lazy, and I was congested and sneezing this morning. You should give it a try! It’s not the most pleasant few seconds of my evening, but I am happier to use it than the pills (and it’s WAY cheaper).

    By the way, I generally found generic Claritin D worked just as well (like Walatin D).

    • asithi says:

      @Lauren, I’ve also have good experience with using a netipot for my allergies. It is kind of gross at first, but you get use to it. And it hardly cost anything other than the price of the initial purchase at the health food store.

  • Kansas Mom says:

    I just wanted to reiterate about double-checking your medical bills. I would guess I’ve had incorrect bills once or twice a year for at least one person in the family, not counting times they wanted to us to pay when the insurance company was waiting for more information. I have found the medical financial offices to be very accommodating. I don’t think they’re doing it on purpose. I think the whole billing/insurance/covered/discounts mess just makes everything complicated – and sometimes nurses or doctors just make notes that are hard to read!

  • Christine says:

    My health care cost savings tip is to get your vaccinations at the local health department. Anyone can go there to get them and they are considerably cheaper than at your dr. Our insurance only covers $500 preventive medicine a year. As a physician, I wont even begin to get into how bad an idea this is for patients and insurance companies, I’ll just seeth silently. However, you’ll find that $500 doesn’t cover much, especially for a newborn. I started taking my daughter to the county health department for her shots instead of the dr and saved hundereds. One rotavirus vaccine dose at the dr was $90. The entire next set of vaccinations, including rotavirus, plus some catch up shots from the time before was $150 at the health department.

    Shop around if you can. It’s worth it for some things. Always tell your dr if you’re in a position where out of pocket costs are an issue. Often your dr can prescribe a different medication or start with a less expensive test. Sometimes this means that you’ll have to pay for the less expensive test and then a more expensive test later because more expensive test generally mean more information. But sometimes it’s worth starting simple. I personally found that patients were often too worried about what I would think to tell me cost was an issue for them. Often, I didn’t even know what different medications cost in our area, or don’t know what they cost on different insurance plans. As a dr, I would always rather a patient tell me cost is an issue because there are things I can do to help. Too often, patients are just trying to be polite and then they don’t fill their prescription/don’t get the test run. This isn’t helpful. I’d always rather work with people.

  • Lora says:

    http://Www.needymeds.com is an excellent and regularly updated source for info on help with affording medicines. http://findahealthcenter.hrsa.gov provides info on health centers that charge based on the patient’s financial situation.

  • Heather says:

    I have a hard time believing that generics are the same as name brand as many birth control generics cause all sorts of side effects that the name brand drug doesn’t.

    • brookeb says:

      @Heather, I agree, and I’m really picky and thorough with my scientific understanding of things. What you generally find, though, is that the generics have to have the same efficacy — and I don’t doubt that the generic birth control is as effective. But I definitely did have really bad side effects when I was switched to generic after years of using brand, which then went away when I switched back to brand a year later.

      I’ve also heard similar experiences from people with mental health meds.

  • Trisha says:

    My family has reccently cut our health care costs in a major way by seeing our chiropractor for regular principled chiropractic adjustments. My husband suffered from severe allergies and, like you, we were told by the allergist that he was allergic to nearly every tree here in Georgia. His Astepro perscription was costing us $90 a month! I would have squeeled with joy to only pay $15. We couldn’t even afford the allergy shots because our insurance required us to pay a $30 copay for every office visit (3 times a week!) Since we started getting our regular adjustments I no longer have severe pain due to carpal tunnel (I could never coupon before because of the pain-costing us even more money) and my husband’s allergies have almost completely gone away. In just 2-3 months!! I know many people are fearful of chiropractic care, but it made sense to us that God created our body to heal itself in many ways. Therefore, it also made sense that spinal nerve interference could stop that healing process. We went in with pain and frustration wondering, “what do we have to lose?” We still have health insurance costs because of those emergencies that you mentioned, but our perscription costs and sick office visits in the last 2 months have been $0! Thanks Moneysavingmom.com for bringing us great articles like this one to help us save in all areas of life.

  • ksenia says:

    Very helpful. I especially appreciated her conclusion. My mom has always taught me that’s it good to budget and plan, but do not compromise on the quality of food because you will pay for it way more in healthcare costs. So we have tried to cut out as much fast food and processed food as possible.

  • dee says:

    Also true for pet medical bills. I took my pets to the same vet for years until I got a new dog that had to be spayed. My neighbor told me my vet was the most expensive in town. He was right! My new vet charged me half of what my old vet was going to charge to spay my dog.
    My older dog has arthritis and takes Glucosamine Condrointin. The old vet sold me pills for $70/bottle. The new vet sent me to Trader Joe’s for the $10/bottle canine pills.

    • Sarah E says:

      @dee, My dog has allergies and has to take an antihistamine every day along with antibiotics in the spring because of infections she gets from scratching so much. The first few months he was prescribing me 1st generation antihistamines (which are in general equivilent to benadryl) and antibiotics and charging me up to 80$ a month for both. I’m in PA school now and so my budget did not have room for 80$/ month for my dog’s medication, and I knew that if I could get the medications from a drug store with a 4$ list I could get a months meds for 8$ instead! He had no problem with that, because the reason he has to charge so much for the meds is because they cost him more than a pharmacy who can get them at cost!

  • megscole64 says:

    ALWAYS look over your bills – sometimes there will be charges on there for services you didn’t even receive.

    Also Walmart has $4 prescriptions – not for everything of course but they still do have good prices.

  • Sarah E says:

    Always ask your doctor for samples! I’m not sure about Oregon, but in the practice I work at in Texas, if a patient comes in and asks about prices of medications being prescribed, the sample closet is always checked to see if there is a sample we can give first or a coupon to help with cost, if there isn’t an acceptable alternative on the 4$ list. Every office is different, but most places I’ve seen have a stock of samples from drug reps, and recently they’ve started coming out with coupon cards that take either a % off of your copay or cost, usually making them a reasonable price. Also, if there aren’t any samples or coupons, ask your doctor if there is an equivalent alternative. Unfortunately sometimes there isn’t an equivalent alternative, especially when it comes to antibiotics and some of the more “disease specific” medications, but some of the newer drugs coming out are just the “active form” of an older drug which has been on the market for years, and is already generic (and therefore cheaper and more likely to be covered by insurance). A few examples are Lexapro (escitalopram) and Celexa (citalopram), Nexium (esomeprazole) and Prilosec (omeprazole), Xyzal (levocetirizine) and Zyrtex (cetirizine), and quite a few others. The main difference between them is that your body doesn’t have to metabolize them to the same extent to get the “active form” and so they generally have lower dosages and not as many side effects. But if you’re willing to try the “old” stuff, which has worked well in the past, it’s generally a lot cheaper.

  • Ashley says:

    Instead of Pataday, you could request Patanol, which is the same drug, but smaller concentration; Patanol is twice a day, versus once a day, but should be significantly cheaper.

    As others have said, ask your doctor for free samples and coupons. Many doctors give free samples so that you make sure the drug works for you before shelling out money.

    Another option is Zaditor, which is an OTC eyedrop which works just as well for most people.

    Dr. Ashley, Optometrist

  • Andrea Q says:

    Another way to save money is to check out of mainstream medicine completely (except for emergencies). I’d love to see an article that focuses on natural remedies and alternatives.

  • Amy says:

    This is such a timely (for me) post – I have asthma and came down with bronchitis. My DR prescribed a zpack for the bronchitis and Advair to help control my asthma-related syptoms. I went to fill both on our high-deductible plan and the Advair was $207! INSANE. I couldn’t bring myself to fill it even though we have the money in our HSA. I waited a day or two (after checking with the dr to make sure it was ok) to see if I got to feeling better. I didn’t, so I looked online and found a coupon for your first 30-day RX of Advair FREE. FREE!!! I will now always check for coupons.

  • jennifer says:

    Seems at my son’s ped office, his CRNP will always give us a sample of a new inhaler or some bubble packs of Singulair. That seems to help and lets us see if a med will be helpful.

  • brookeb says:

    I have pretty serious allergies that nothing really fully fixes (my father has the same issue, so it’s likely from him). I tried the honey route, I tried a neti pot (with a seriously bad reaction), etc. I also have only been able to use a prescription med for around a year before it stops working and I need to switch to something else. What I’ve found that’s useful is 1) to try one thing at a time. I’d been prescribed singulair + a daily use inhaler, but I found once I started the singulair I wasn’t having issues with breathing anymore and didn’t need the inhaler. Also 2) definitely make use of your FSA if you have one — being able to pay for your medical and health costs pre-tax saves money.

  • Lora says:

    Andrea Q. – I have found http://www.earthclinic.com a valuable source on info on natural remedies. Users of the site provide info on their experiences with various folk remedies.

  • Heidi says:

    Great timing! Two weeks ago my dd was hospitalized for a terrible kidney infection (which may lead to long-term prescription drugs or surgery or both) and this week, a simple bike accident has my ds going in to orthopedic surgery. We have good insurance, but all this has emptied our health fund, and pushed us into the interim “pay out of pocket” stage, before we get to the 80/20 stage. The only thing that will save us? EMERGENCY FUND. God bless Dave Ramsey for sharing that with us…we would be in trouble if it wasn’t full and waiting for us when we needed it!

  • Katherine says:

    Thank you!! I just printed two $15 off coupons for Nasonex – one for each of my boys. We spend over $2000/year on Rx meds, and I would never have thought to look for coupons. I’m off to search for others. . . .

  • Stephanie says:

    I have to agree with double checking your insurance bills. More than 50% of the time our bills are completely wrong and are charged for the wrong thing or over charged. After we call, email, etc.. the problem is fixed but I am sure that the insurance company is betting on the fact that the majority of people will not go to all that trouble to fix a high bill.

  • Jane says:

    Thank you so much for the ideas on negotiating hospital bills. I just got my bill from my cesarean and I was charged $500 for “labor” even though I had a planned delivery. I plan on calling and negotiating my bill but I wasn’t quite sure how to do that. Thanks to a reader tip on the comments I have some idea of how to go about that now! 🙂

  • Patti says:

    This is a great article. You are right about medical expenses bankrupting people. One piece of advice I have: if you run into roadblocks with your insurance company, ask your employer if they have a liason. When I was tested for allergies, the insurance paid for my shots and meds but wouldn’t cover the $1500 for the testing that said I needed them. I fought back for a year and finally found out that our employer could have done the fighting (and would have had more pull as they have thousands of employees) because they have someone dedicated to working with the insurance company. Also… do plan for emergencies.
    I broke my leg quite accidently at my son’s field day and boy! we really ran up the expenses as my treatment took one full year. Thank goodness for our catastrophic health coverage and having the deductable saved in our emergency fund.

  • Mercedes V. says:

    Great posts on this topic.

    1. Whenever I have a new prescription, I use a Target new presciption coupon (in-ad and sometimes on their website). Kroger often has in-ad coupons for transferred prescriptions ($25 added to my loyalty card). And my local CVS accepts the Target & Kroger coupons and gives me a $25 gift card when I take my new prescription. Not sure, but I think this also applies to prescription prenatal vitamins.

    2. My insurance (COBRA which runs out at the end of the month) has been paying almost $1,000 per tube of Taclonex for my psoriasis. Six weeks ago I found out I was severely Vitamin D deficient. I started taking 4000 units of Vitamin D and amazingly, my severe psoriasis is 50% clear. Have not used any ointments in 2 months and this is the clearest I’ve been in years. BTW the Vitamin D supplements were free with Wags Register Rewards.

  • Ashlynn says:

    If you are unsure how to go about questioning your healthcare bills, consider consulting a billing advocate.
    http://www.billadvocates.com/
    A billing advocate will review all your medical bills for you, and most only charge you a percentage of your savings if they are able to get your bill reduced.
    Also many offices/hospitals will give you a prompt pay discount if you can pay the balance right away. Usually around 35% discount.
    Set up a payment plan if you have too, even if you are paying $5 a month, most billing systems aren’t set up to send you to bad debt if you pay money every month. Every time you call into make a payment, ask if there is a discount available. Around fiscal year end for hospitals they want to get balances off their books and usually run large discount programs.
    Hospitals usually have financial assistance programs (FAP), ask for them to send you an application to see if you qualify.
    Know your insurance benefits before you go. Always call your insurance and explain what tests your being sent for AND the diagnosis (reason for test) to know what requirements there maybe (authorization etc) and your benefits. *Best suggestion, get the codes that will be billed ahead of time and call ins with this specific information to get exact benefits and to estimate out of pocket expenses.

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