It’s estimated that the typical American family spends on average almost $4,000 per year on health care related costs. For many families this is a very large percentage of their household income – and even with additional protections put in place by the Affordable Care Act, health care costs remain the #1 cause of personal bankruptcies in the United States.
Many people are spending far more on medical costs than they need to. We’ve put together a list of eight easy – and more importantly, free! – ways to cut these expenses, up to 75% in some cases.
1. Use a Prescription Discount Card
You might think there’s a gimmick or some hidden cost, but they’re legitimate and can save you over 75% on your prescriptions. The biggest savings can be had on generic medications; the savings on brand name medications are less. Many large pharmacy chains including CVS, Walgreens, Wal-Mart, Rite Aid, Kroger, and Target offer their own cards and there are a number of companies that offer these cards for free. Make sure you request one next time you fill a prescription or simply search “pharmacy discount card” and you should have plenty to choose from.
2. Request Generic Medications Whenever Possible
Many medications that have been on the market for a while are no longer under patent protection and have generic equivalents available, often for a fraction of the cost of the brand name version. For example, the brand name cholesterol lowering medication Lipitor sells retail for over $5.00 per pill. Atorvastatin, the generic version of Lipitor, sells for less than $.50 per pill. Over the course of a year that’s a difference of over $1,200.
You should always check with your doctor before making any changes to your prescriptions. In almost all cases though, generics are equally as safe and effective as their brand name (and far more costly) counterparts.
3. Open a Health Savings Account (HSA)
Many health insurance plans, particularly ones with high deductibles, are what’s called “HSA Compatible”. What this means is that many of your health care expenses could be tax deductible.
You open an HSA debit card account at a bank and put some money in the account (there are typically no monthly or transaction fees on HSA accounts, unlike regular debit cards). Whenever you incur any medical expenses – co-pays for doctor visits or prescriptions, out of pocket costs incurred before you meet your deductible, medical equipment or supplies – you pay for them using your HSA card. When you file your taxes, the amount you spent through your HSA is considered non-taxable income.
4. Buy Store Brand over the Counter Medications
You can pay twice as much for Tylenol (the brand name medication made by Johnson and Johnson) as you would for store brand acetaminophen (the active ingredient in Tylenol).
As we pointed out in the case of generic vs. brand name medications, the effectiveness and safety are usually identical. A recent survey of several hundred physicians revealed that over 90% will buy store brand medications whenever possible. And if they’re comfortable doing that, you should be as well.
5. Shop Around For Private Health Insurance
Most Americans get their health insurance through their employers. With the passage of the Affordable Care Act (also known as the ACA), many Americans have other options. By comparing your current plan to ones available at Healthcare.gov (the federal Affordable Care Act website) you can potentially cut premiums significantly. If you’re getting insurance currently from your employer, an ACA plan may cost less than your share of the monthly insurance premium being taken out of your paycheck. And in many cases you can negotiate with your employer to have them add back to your paycheck part or the entire insurance premium they no longer have to pay. Additionally, the ACA provides subsidies for families making under $94,000 per year so the cost savings could potentially be very substantial.
6. Negotiate With Your Doctor
For most people, price negotiation is usually associated with buying a car. But with health care costs being as high as they are, you may be able to save yourself more money by negotiating with your doctors. Insurance companies usually pay doctors far less for a visit or procedure than they would charge a patient directly. So in many cases they’re willing to accept payment that’s less than what’s shown on your bill. Explain your financial situation to them and many times they will reduce their fee, allow you to pay in installments over time or both. You may be be pleasantly surprised by how understanding and accommodating your doctor can be.
7. Get Coupons from Pharmaceutical Companies
Prescription drugs – particularly popular brand name drugs – are very expensive. Many health insurance plans have a list of drugs they’ll cover and the one your doctor prescribes may not be on there. The insurance companies naturally prefer generic versions of similar medications to the more expensive brand names. The pharmaceutical companies know this and many offer coupons that you can use to purchase these medications for a tiny fraction of their retail cost, and in some cases for no cost at all. We’ve compiled a list of the most popular medications with direct links to coupons, which you can find here.
8. Use in Network Providers Only
Many health insurance plans include “Out of Network Benefits”, meaning you can use doctors that are not part of the insurance company’s preferred list of providers. However, this is more expensive for the insurance companies (they negotiate low rates with their preferred providers) and more expensive for you, the patient. The insurance companies usually cover only a percentage of the cost when using out of network providers as opposed to in network providers where they often cover 100% of the cost and you only have nominal co-pay for the visit.
