Thursday, June 9, 2011

Day 241 - Lowering Your Cost For Medical Procedures

June 9, 2011

Day 241 - Lowering Your Cost For Medical Procedures

m_bartosch /
Certain non-routine healthcare procedures - such as an MRI or a CatScan - can be rather expensive even if you have decent insurance.  As an example, say you have an MRI done and the total cost is $2,000.  Your annual deductible is $500 and your portion of co-insurance is 10%. Maximum out-of-pocket annually is $3,000 (assume it is January 1 and you have paid nothing out of pocket for the year). Your total cost for this procedure would be $650 ($500 deductible + 10% of remaining balance $1,500 * 10% = $150).

Despite your health care coverage, $650 is still a significant out-of-pocket expense for most people. And most likely additional tests will be ordered that will require additional co-insurance payments. Thus, expenses can add up very quickly if medical care is required beyond a routing office visit and copay. Based on my recent experience, here are a few ways to try to minimize the out-of-pocket expenses.

1) Read and understand how your health insurance classifies certain medical procedures. For example, my primary care physician (PCP) visit requires a basic copay, but if I have any labwork done it is an additional expense rather than included in the copay. This is only because my PCP is attached to a university hospital and all labwork is sent directly to the hospital for analysis (as opposed to being completed in-house or sent to a private third-party company). As a result, my labwork is considered a "hospital procedure" despite the fact that I never step foot inside a hospital. Therefore, I must meet my deductible before the amount is covered, and beyond that I am subject to coinsurance. In the case of my insurance coverage, if I found a quality PCP who did not conduct labwork at a hospital, I would be able to realize significant savings. In my opinion, the insurance company is just taking advantage of semantics and getting away with charging me for procedures I typically wouldn't need to pay extra to have. But what else is new?

2) Shop around when a doctor orders a major procedure. When your doctor orders a routine yet costly procedure, you don't necessarily need to have the procedure done at the location your doctor suggests. Many insurance companies allow you to compare the cost of the procedure at different locations in your area. I conducted a sample search for the cost of an MRI in the San Diego area and was very surprised to find a significant price range difference. Using the same facts as the previous example, a cost of $1,000 vs $2,000 results in a $100 savings ($500 deductible + $50 coinsurance payment vs $150 coinsurance payment).

3) Ask questions about your coverage prior to needing non-routine procedures. Although not the most exciting reading, try to spend some time going through your coverage in detail prior to a serious illness. You won't feel like learning about copays, coinsurance and deductibles when you are sick and you also won't want to deal with any surprises.

Despite making a good faith attempt to save money on your medical expenses, this isn't necessarily the area of your life where you want to cut too many corners. Be smart and be willing to spend a little extra for that second opinion if your gut tells you that you need it.

How do you save money on your healthcare expenses?

Stay tuned,


HolidayJen said... Best Blogger Tips

UGH. Health insurance has to be the most frustrating thing in the world.

Hearing stories from other parts of the country makes me thank my lucky stars every day that I live in Massachusetts. Back in 2006 I had a head MRI, 2 CT scans and retina surgery (all unrelated). Total cost: $0. The only charges were co-pays for follow-ups. And that's when I had a run of the mill local HMO! (Not the fancy-pants PPO I have now.) It's probably the #1 reason we will never leave this town.

So while I can't complain about procedure expenses, my tip: mail order prescriptions. I used to spend $30 a month at CVS for daily medications. Now I get a 3-month supply for $10 through, and only spend $40 a year! Amazing/ridiculous.

Sarah said... Best Blogger Tips

Thanks, HolidayJen! I just started the mail-order prescription service and can't wait to save some money!

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