Lowering Medical Bills

Pasted by Brian Redhead

Twyla and Robert House have excellent health-insurance coverage. But after Robert was hospitalized twice within eight months, they ended up owing more than $6,500 in out-of-pocket medical expenses. The Little River, S.C., couple dutifully paid a portion of the balance each month until they whittled it to about $2,000. At that point, they decided to try a new tactic. Robert offered to pay off his bill in a lump sum if the hospitals would give him a discount. "We had an extra $1,300 in savings," says Twyla. "Robert told them, 'This is how much I have, and if you want your money, or at least a big chunk of it, you'll cut me a deal.'" The gambit worked.

The hospitals agreed to deduct more than $650.
The Houses used the same strategy last year when their daughter, Elena, had gallbladder surgery. As soon as they received a bill, Robert asked for a deal. He rejected the initial offer to knock off 15% and held out for the same 25% break he had received before, shaving about $400 off the bill.

Your out-of-pocket share of a hospital bill can be a budget buster, and now health insurers are passing along even more of the costs. For example, many are raising deductibles, and some are switching from co-payments (such as $20 per doctor's visit or per prescription) to a co-insurance system that makes policyholders liable for a percentage of the total bill. Over the past five years, for instance, 70% of Cigna insurance policies have shifted from co-payments to co-insurance.

By comparison-shopping and negotiating the best price -- the same tactics you would use for any other major purchase -- you can trim your bills. "You have to wonder why some people don't give the same time, effort and attention to their health-care costs as they do to other major financial decisions," says Tom Bridenstine, the managed-care ombudsman with the Virginia Bureau of Insurance, who helps consumers with health-insurance issues.
Evaluating health-care services based on price doesn't mean you'll sacrifice quality. And you'll find plenty of help from employers and insurers, who also benefit from lower costs. The following tactics will help you save hundreds, if not thousands, of dollars on your medical expenses.

1. Ask for a price break. Follow the strategy the Houses used. Each hospital has its own rules about negotiating bills, but it doesn't hurt to ask. The same goes for doctors and other health providers. (For more on how to cut a deal, see Save Thousands on Your Medical Bills.)

2. Pick the appropriate facility. Where you go to receive care can make a huge difference in your costs. Emergency-room visits tend to cost $300 to $1,000, compared with $150 at an urgent-care center, $65 to $75 at a doctor's office, and $35 to $45 at a convenience-care clinic. With a 20% co-insurance charge, that trip to the emergency room could cost you $200 versus just $7 for a visit to a convenience-care clinic. For nonemergencies, it pays to call your insurer's 24-hour advice hotline for guidance on where to go for care. Make sure the facility and provider are in your health plan's network.

3. Use online tools to compare costs. Insurers are making it easier to compare hospitals and providers based on quality and cost. And pricier doesn't always mean better. "Hospitals with low complication rates and high survival rates tend to have lower costs," says Jeffrey Kang, Cigna's chief medical officer. Companies such as Cigna and Aetna have integrated Web tools that let customers search by ailment (such as diabetes or wrist pain), then find appropriate local doctors, including an assessment of their fees and quality of service. In certain areas, Aetna includes specific fees for up to 600 procedures. Click to read more.