Money Saving Mom®

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:

• Finding affordable health insurance when you’re on your own
• You can get health coverage
• Going it alone when buying a health policy

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