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New Year, New You: Tips to Save Money & Avoid Surprises

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With the start of 2020, and for many, a new plan year for your healthcare benefits, it’s important to be up to speed on the resources that are available to help you manage your personal healthcare.  Today, the majority of consumers are accustomed to being able to handle things online such as banking, credit cards, internet service and utility bills.  However, many individuals don’t realize the tools at their disposal for managing their insurance and health care in a similar manner.

While the healthcare industry has been a slow adopter, both healthcare providers and health insurance carriers have made significant investments in technology in recent years to improve the member’s experience.  As a result, members of a health plan can now generally view their claims, check the status of their deductible, look for providers, check a benefit coverage level, and schedule a tele-medicine visit to name a few, all online.

In an era of electronic medical record keeping, it’s also not uncommon to see hospital systems offer interactive websites that allow a plan member to communicate with doctors and facilities via chat or email. In addition to managing claims, paying bills or looking up lab results from a mobile device, member friendly tools are constantly being added resulting in a plethora of resources available to individuals today to manage their health.  We’ve highlighted some of our favorite tips below to help you succeed.  Whether you’re facing a freshly reset deductible (thanks to a new plan year), or a new set of wellness goals set by your employer and insurance carrier, we’ve got you covered.

Online Wellness Tools – Don’t leave Money on the Table

You would be hard pressed to find an insurance carrier out there that does not offer some type of wellness benefit to members. Why is that? When a community is healthier, we can help to impact healthcare claims for the larger population. Fewer claims via early detection of illnesses or just general improvement in healthcare status means lower insurance premiums.

The cost of services (think the cost of an ER visit in 2019 vs. 2020 with inflation) may not be something that you can directly impact, but taking strides to lower high cholesterol, for example, certainly may keep you from developing an expensive, chronic condition.  To help you get started, carrier websites generally offer the opportunity to enroll in wellness programs that can help you manage chronic conditions, reduce gym costs, develop a diet and nutrition plan, and in some cases, obtain health coaching to improve your overall well-being.

In addition, many programs offer cash back for participation in wellness activities and discounts on services and products.  In theory, you and your employer have “pre-paid” for these programs with your insurance premium dollars so don’t leave that money on the table when you could get paid for going to the gym or possibly get a hefty discount on those new sneakers or eyewear.

Shop for your Healthcare – The Times They Are a-Changin’

Over the past decade we have seen significant improvements in online tools to help members become better consumers of healthcare. When was the last time you bought a new smart TV or laptop without first reading one of 10,000 reviews on Amazon? With improvements in technology, both carrier tools and free consumer websites now offer the ability for you to shop for your healthcare. These tools are for situations where you as the member can shop for a specific, non-emergent procedure.

One of the simplest examples is an MRI. Did you know that the cost for an MRI varies wildly depending on where you have it done? We typically see claims cost ranging from $2,000-3,000 in a hospital setting vs. $600-800 at a freestanding imaging facility for the exact same procedure.

You also may be surprised at the conversations that arise with your primary care doctor when you start a discussion about this; many doctors are not aware of the variation in facility fees or prescription drug prices. Often, they are referring you to a convenient location or hospital system they are affiliated with, but there just might be an equivalent option around the corner that they would be just as comfortable with who may save you significant out-of-pocket costs.  Come on, who wouldn’t rather spend that thousand dollars on something more exciting than an MRI?

It is so important to be your own advocate when it comes to your healthcare.  Today, those that speak up, ask questions, and educate themselves have better outcomes. We have included a list of some of the most common healthcare price transparency tools below, in no specific order of importance, but please remember your insurance carrier website should also have tools available to you to shop for care. Consumer Reports also provides a list of cost transparency tool rankings that is free to access on their website.

(not all the sites above will have information for all geographic areas)

Stay in-network (or prepare for sticker shock)

We cannot stress enough how important it is to pay attention to the network that your insurance carrier provides. There are so many insurance terms floating around out there.  If you pull out your ID card, you likely see an acronym such as PPO, HMO, or EPO, but what do they all really mean?

At the end of the day, the acronyms refer to the list (or network) of doctors and facilities that have a contract with your insurance carrier.  What does “have a contract” mean and why does this matter so much?  Essentially, doctors or providers that are considered in-network have signed a contract with an insurance carrier to charge a certain price for a certain procedure, discounted from that provider’s “list price”.  Often on an explanation of benefits you receive from your insurance carrier, you will see a “billed amount” and an “allowed amount”.  The billed amount is what that provider routinely charges and the allowed amount is how much the insurance carrier is willing to pay for that service, as detailed in the provider-insurance carrier contract.

Conceptually, all members are charged the same amount for the same billing code (albeit a member needing a 15-hour surgery may be a different cost than a 1-hour surgery – think billable hours for an attorney for comparison).  However, when you visit a doctor or facility that is considered out-of-network, this means that no fee schedule (aka no discount for you) exists. Let’s look at an example to help make this easier to understand.

You have a sore throat and go for a throat culture at your primary care physician. Your primary care doctor may send that culture to a lab to be examined more closely for specific types of bacteria. If that lab is in-network, the cost may be $100, for example. However, if they send the culture to an out-of-network lab that vendor may charge $500, let’s say.  For an out of network service, your insurance company is typically going to only pay for the portion of the bill that they deem “reasonable and customary” or, what they would pay an in-network lab for the same service. Therefore, you as the consumer, could get stuck with the $400 difference between what the insurance company is willing to pay and what the out-of-network lab charges.

The unfortunate event described above is a practice called “balance billing” and is a common problem that has resulted in surprise bills for many unassuming patients.  Sometimes the balance bill amount is only a few dollars or sometimes its tens of thousands of dollars. Our takeaway here is that you must be your own advocate and ask your doctor questions to help avoid these scenarios.  Asking why additional tests are being requested can help combat unnecessary treatment and surprise bills.  You would ask your mechanic why a specific part or repair is necessary on your car and your healthcare should not be any different. Don’t end up featured in the next Kaiser Health News “Bill of the Month” story.

You have a wallet-busting or confusing hospital bill, now what?

In the event you are one of the unfortunate souls who, unbeknownst to you, had an out-of-network lab claim thanks to that extra precautionary blood-work, fear not, we have another resource for you. With the rise in popularity of High Deductible Health Plans (HDHPs), we have seen an increased interest in medical bill audits and negotiation.

As we have moved away from the traditional health plans (plans where a low fixed-dollar copay applied for most services), many people are seeing the true cost of their healthcare services for the very first time after enrolling in a HDHP. We always like to mention here that there is a common misconception that the cost of a service is higher on a HDHP versus a traditional (copay) plan. Please know that the cost of the service is not different – before you were paying $20 for your primary care visit and now you are paying the full cost of $100.  The reality is, the cost of those copay plans began to outpace the plan benefit in the majority of cases, or in other words, you (and your employer) were paying thousands more per year in premium just to keep your fixed $20 copay.  So, keep in mind that while your cost at the doctor might be greater, the amount of premium you are paying for that plan is likely less.

Still, saving money on your insurance is little consolation when you are facing a steep medical bill that more than wipes out all the savings you had gained.  The following is a summary of options we would recommend you explore if you find yourself in this situation.

Medical Bill Review & Negotiation

There are vendors where you can submit your medical bill to for professional review.  If they are successful in finding any savings, while that vendor retains a percentage of the those savings (usually 30-50%) in exchange for their efforts, your bill is significantly reduced.  Some examples of these services are as follows:

Patient Advocacy Support

In addition to medical bill auditing and negotiation services, there are services, such as that provided by the National Association of Healthcare Advocacy, to assist individuals facing challenges navigating the healthcare system at large.

Provider Payment Plans

Physician offices and hospital systems are generally very flexible and willing to set up payment plans with little to no interest if you follow their schedule for payments.  A provider or facility would much rather work out an installment plan with you directly than receive no payment and send you to collections.

Charity Care Applications

There are charity funds, government sponsored programs, and a variety of payment options available to consumers, you just sometimes have to seek them out.  If you have a large hospital bill, for instance, reach out to their billing office and ask if they have a charity care application.  Typically, they will require you to provide information about your household and financial situation prior to making a determination on your eligibility.  It is a worthwhile phone call to make, however, as the billed amounts can be discounted significantly.

Health Savings Account Bump

For those folks enrolled in a HDHP that also contribute to a Health Savings Account (HSA), one of the benefits of this arrangement is that you can pay yourself back. So, in the event you have a large medical bill and don’t have a large enough HSA balance, you can always pay the bill (in full or installments) and then reimburse yourself at any point in the future for the expense with tax-free dollars. There is no rule on when you can use your HSA funds for eligible expenses – just on when and how much you can contribute.  Depending on the tax bracket you fall into, using HSA funds to cover medical expenses is like having a 25% coupon off the bill!

Navigating High Deductible Health Plans

Studies have shown increased consumerism (being more cost conscious) when people enroll in a HDHP – this may not be surprising to you because when you have more skin in the game, you tend to pay more attention to who and what is being billed to you and perhaps even shop around.  Even after shopping carefully for your next drug fill or health care service, your work isn’t done.  Studies have shown that up to 80% of medical bills are estimated to contain some type of error. Duplicate billing, upcoding, and unbundling are some of the common industry billing errors we hear about.  While you as the consumer are likely not well versed in medical billing code, make sure your explanation of benefits match the bill your healthcare provider sends you.  If you have any questions or see something that doesn’t make sense, give your physician’s office or your health insurer a call!

Also, we have already mentioned Health Savings Accounts and Flexible Spending Accounts.  We always recommend taking advantage of these accounts when they are made available with your health insurance plan, especially when moving from a copay style plan to a high deductible health plan.  While Flexible Spending Accounts have that “use it or lose it” provision where the funds must be used by the end of the plan year, HSA funds that you contribute roll over year to year.

Often, there is premium savings when making the decision to switch to a HDHP.  Our recommendation is always to put as much of that premium savings aside as you can (if not more) into your HSA account, if enrolled in an HSA qualified High Deductible Health Plan (which most are, today).  HSA’s also generally give you an investment option once your balance reaches a certain threshold.  This enables you to further benefit from those tax free contributions by investing them in a variety of investment funds, much like you may your 401-K or 403-b retirement funds.

Are you in the driver’s seat for your healthcare?

We get it.  Healthcare is difficult to navigate.  It seems everywhere you turn, there is another acronym or confusing insurance term to learn, someone’s lost your records, you are randomly sent a replacement ID card, and it goes on and on.

The good news is that data and technology are rapidly improving globally and that more and more organizations in the healthcare industry are using this as an opportunity to differentiate themselves by focusing on you and me, the healthcare consumer.  You will continue to see more solutions become available to you that provide concierge-level support in managing your healthcare and understanding your options.

If you haven’t signed on to your insurance carrier’s site, why not check it out right now and see what resources they are making available to you?  It’s good to be aware of what they offer and to frequently check back for updates and enhancements.  That way, when you do have an illness, or need to understand your treatment options, you know where to go and be a confident consumer of healthcare.

About the Author

Becky McClellan has a B.A. in Economics and is currently working toward a master’s degree in Applied Statistics at Rochester Institute of Technology.  Becky is a Health Analytics Consultant who has worked in employee benefits since 2012.  At Consiliarium Group, Becky works closely with clients to create sustainable, long-term health care initiatives and organizational strategy as it pertains to their benefit programs. Her role includes the analysis of funding arrangements, development of contribution strategy, and analysis of claims utilization to identify strategic opportunities. Becky is passionate about creating a multi-year plan for organizations to drive employee engagement, consumerism, and cost transparency surrounding health care.

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