3 ways to save on medical bills
This isn’t healthy — for your bank account.
Out-of-pocket healthcare spending has been rising steadily, according to the JPMorgan Chase Institute, which looked at the de-identified financial transactions of 2.3 million people across 23 states to collect this data. In 2016, families spent an average of $714 on out-of-pocket healthcare spending, up from $629 in 2013. That’s an increase of nearly 14% over four years.
The most common cost is for a doctor’s visit (22% of Americans spent out of pocket for that), followed closely by dental visits (21%). Of those who had to visit the doctor and pay out of pocket, the average spending in 2016 was $293, which, while high, pales in comparison to a hospital or dentist visit, which cost $325 and $465, respectively.
In some cities and states, out-of-pocket healthcare costs are particularly high.
Metro areas where residents spend the most in out-of-pocket healthcare costs, 2016
Meanwhile, Riverside, Los Angeles and Sacramento, Calif. Had the lowest spending at $499, $577, $581, respectively.
States where residents spend the most in out-of-pocket healthcare costs, 2016
On the other hand, out-of-pocket healthcare spending was lowest in California ($596) and Michigan ($601).
Among the factors that could be contributing to discrepancies in out-of-pocket healthcare spending among different areas include access to public health plans like Medicaid, competition among insurers in a market, competition among hospitals and doctors in the market, and even the types of health plans provided by large employers, says Diana Farrell, President and CEO of the JPMorgan Chase Institute.
“As much as an individual might want to plan for their healthcare spending needs, this wide variation of factors makes it hard to do so,” she adds.
What’s more, no matter where you live, “out-of-pocket healthcare spending has a meaningful impact on families’ financial lives and their ability to access credit,” JPMorgan Chase Institute noted. “Research suggests that a major medical event, such as a hospital admission, car crash, or cancer diagnosis, leads to increased medical expenditures, lower income, higher debt, and increased foreclosure and bankruptcy rates. Medical debt is widespread, even among the insured.”
While it’s typically hard to avoid a medical bill, there are things you can do to reduce them.
Negotiate. Once you know what you’ll be obligated to pay out of pocket, remember this: The sticker price often isn’t what a hospital will make you end up paying if you negotiate. Before you call to even ask for a discount, it’s helpful to know what a procedure should have cost (your health insurance company’s website may have suggested rates and Healthcare Blue Book also lists rates). Once you know, use this guide to start the negotiating process.
Look for errors on your bill, and correct them. One study found that up to 90% of medical bills contain errors — some of which can be very costly. Here’s a helpful guide on the most common medical billing errors and how to spot them.
Challenge your health insurers’ rejections. Health insurance companies reject claims all the time — but that doesn’t always mean they won’t pay them if you challenge that rejection. Know the fine print of your policy (you can usually access this online) on what is covered and what isn’t and call your company if you think they rejected something unfairly.
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