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1. You need a pricey drug your prescription plan doesn't cover.
First, ask your doctor if a generic version is available. Generics can cost far less than brand-name drugs and are often covered by your insurance.
If a generic doesn't exist or if your doctor has a medical reason for prescribing the brand-name drug, you've got to go shopping. Prices for drugs can vary by as much as 400 percent, depending on the pharmacy. Often online retailers like Drugstore.com offer the lowest prices.
In addition, look into mail-order prescription services like Medco or Express Scripts, which allow you to buy in bulk for up to 60 percent off the pharmacy price. This option works best if you're purchasing medicine you take regularly -- say, prescriptions for a chronic condition such as asthma. Lipitor, a commonly prescribed cholesterol-lowering drug, for instance, can set you back as much as $140 for a 30-day supply. But buy three months' worth by mail order and those 30 pills could cost you as little as $16.50.
Another trick? Split your pills. There's no law against it -- just ask your doctor to prescribe double-strength tablets. Instead of the prescribed 100-milligram pills, for instance, you'd get a 200-milligram dose. The cost of the prescription is the same but the 200-milligram pills will last twice as long cut in half. Just pick up an inexpensive pill-splitting device at the drugstore. Be aware that pill splitting doesn't work with all medicines (gel caps can't be split and time-release drugs shouldn't be).
2. You need to see an out-of-network doctor.
Be prepared to negotiate.
Many insurance companies will pay 70 to 80 percent of "reasonable and customary" charges when you see a health-care provider outside your network. But "reasonable and customary" is the tricky part, says Tom Billet, a senior executive with the benefits-consulting firm Towers Watson. Say your bill is $100. If your insurer pays 80 percent of out-of-network charges, you may be expecting a check for $80. But your insurer might determine that reasonable and customary charges for that type of doctor visit should be $80, not the $100 you were charged. In that case you would be reimbursed $64.
Thanks to legal action by the New York State Attorney General's office, the prices that insurers use to calculate reasonable and customary charges have become more realistic. Nonetheless, to protect yourself when you know you're going out of network, always ask your insurer what its reasonable and customary fees are for specific treatments. Then go back to your doctor and ask if she'll accept the amount the insurance company is willing to pay.
3. You need a root canal and a crown but your dental insurance maxes out at $1,000.
Spread out the treatment.
Good dentists know what kind of work can be extended over several months. If you stagger the procedures over separate calendar years, you can get more of the cost reimbursed than if you have all of them within one year.
A temporary crown, for instance, will often last for 12 months or more. So if you have a root canal and get the temporary crown sometime this year, you'll likely hit your maximum. But wait until next year to get the permanent crown and you can be reimbursed again.
Another cost-saver? Try a local dental school clinic. "The dental students are supervised by qualified teachers and often offer excellent care for about a third of the price of traditional dentists," says Mark S. Wolff, DDS, associate dean at New York University's College of Dentistry.
4. You need to schedule a surgery or other hospital visit.
Watch out for unexpected out-of-network charges.
You may assume that since your surgeon or primary-care physician at a particular hospital is in your network, the other health-care providers you see at the hospital are as well. But that isn't always so, says Candice Butcher, chief executive officer of Medical Billing Advocates of America, and they could bill you for their full fee. Or the lab work you have done at the hospital may not be covered because the hospital lab isn't in-network.
"Be sure to ask the admissions staff what doctors you'll be seeing, what X-rays and lab work you'll need, and whether those services will be paid for by your insurance at in-network rates," says Butcher. If some providers are out of network, ask if there are in-network alternatives or, more likely, if the out-of-network doctors will accept your insurance company's fee. In many cases they will -- and will handle the negotiations with your insurance company directly.
5. You want cosmetic surgery, Lasik, or another procedure that insurance won't consider covering.
Strike a bargain.
Talk to your doctor about the price of the procedure up front and then see if you can get a better deal. "Doctors and other health-care providers are often willing to lower their fees if you ask," says Jonathan Weiner, PhD, professor of health-policy management at Johns Hopkins University. If talking to your doctor about money makes you uneasy, speak to the billing manager instead. She hears these requests often and knows how to make a deal.
In addition, most providers and hospitals will work out a monthly payment plan. Or, if you can afford to make a lump-sum payment, ask if you can get a discount for cash. Providers will often agree because a one-time payment saves them money on billing and administrative costs.
Finally, be sure to take advantage of a flexible-spending account if your employer offers one. Use it to sock away pretax dollars to pay for eligible medical expenses, including Lasik and some cosmetic procedures.
6. You need to fight a denial from your insurance company.
File an appeal.
If your insurer won't pay for a claim and you think it should, you have the right to appeal the decision. But you must be sure to meet all deadlines, file all forms, and otherwise follow your insurance company's rules and procedures carefully or your appeal may not be valid.
When drafting your appeal, enlist your doctor or his billing expert's help. Say you needed a follow-up ultrasound for an ovarian cyst. Your ob-gyn can help you formulate an argument and provide any medical records and other backup you'll need to make your case. "About 53 percent of appeals succeed in our state," says Kansas Insurance Commissioner Sandy Praeger. And according to advocacy groups, the success rate is similar nationwide.
7. You think you need to go to the ER.
Emergency room bills can be sky-high, especially in a hospital that's not part of your insurance company's network. It makes sense to avoid the ER unless you are facing a true emergency.
The top three reasons for ER visits in 2007 were sprains and strains, superficial injuries like bruises and cuts, and upper-respiratory infections, according to Ryan Mutter, a senior economist at the federal Agency for Healthcare Research and Quality. These are all things that certainly need attention, but not necessarily in an ER.
If you're contemplating whether to go to an ER -- you have a swollen wrist that might be broken, for instance -- call your doctor's office for advice. Or head to an urgent-care center. These facilities specialize in treating mild injuries, and insurers recommend them because they're cheaper than ERs. You'll like the fact that you probably won't wait as long. Call your insurance company to find one near you and confirm that it will cover the visit.
The New Rules for Flex Spend
One of the best ways to save money on health care is to take advantage of flexible spending accounts, which let you set aside a certain amount of money before taxes each year, usually through paycheck deductions, to pay for out-of-pocket health-care costs. Many health expenses are eligible, including deductibles, co-pays, eyeglasses, dental work, mental-health counseling, and more. Because you're using pretax dollars, you can save about 20 percent.
There is a catch. If you don't spend all that you've put away each year, you may have to forfeit it. What's more, the new health-reform law makes some major changes to flex-spend accounts. Starting January 1, 2011, over-the-counter drugs will no longer be an eligible expense unless you have been specifically directed to use them by a doctor. Previously you could get reimbursed for any OTC medication. And starting in 2013 the annual maximum you can contribute to your flex-spend account will be $2,500; currently companies set the annual maximums and many allow much higher contributions. "Neither of these changes should deter you from setting up an account," says Jennifer Calhoun, a principal with Mercer, a health and benefits consulting firm in Philadelphia. If a big elective medical or dental procedure is in the offing -- like Lasik surgery or tooth implants -- you may want to schedule these treatments while you can still pay with pretax dollars.
Originally published in Ladies' Home Journal, February 2011.