For a family of four covered by a PPO, the average cost of health care now exceeds $25,000 a year, according to a new study.
The Milliman Medical Index reports that the average cost of health care rose 4.7% in the past year, reaching $25,826 in 2016. That’s three times greater than the average cost of $8,414 in 2001.
Today, employees pay approximately 43% of their health care costs, while employers pay the other 57%. As employees take on more of a personal stake in controlling their medical costs, it’s no longer just about controlling the employer’s costs to provide health benefits.
What’s an employer to do when valued staff members worry about their ability to cover rising medical expenses? Here are five dollar-saving strategies your commercial clients should share with their employees:
1) Bargain hard. Know how much it costs. Don’t be afraid to ask the doctor, dentist or hospital if they’ll accept less. Surprisingly, studies find that this often results in lower bills. If you’re willing to pay cash, you may be able to save as much as 10% upfront because health care providers don’t like the hassle of dealing with credit cards and collections.
And look carefully at your bill. Mistakes happen. When you catch an error, request a corrected invoice and contact your insurance company. If your health claim is denied, call the insurance company's customer service. If you’re still not satisfied, learn how to file an appeal.
2) Shop around. Communities often schedule free or low-cost health screenings and vaccinations. If you live somewhere close to a dental school, look into dental treatment from students who are working under faculty supervision. Nonprofits such as Smile Restore in Reno provide low-cost dental care for underprivileged patients. Search online for discount contact lens providers.
3) Live smart. Don’t skimp on routine checkups and vaccines, which can help catch medical problems early or prevent them altogether. And quit smoking—health insurers are allowed to charge smokers 50% more on many health policies. Closely follow the instructions for any prescriptions you’re taking. Eat nutritiously, watch your weight, wash your hands to prevent the spread of cold and flu germs, remember to floss and chill out with a little relaxation.
After all, 80% of common infections such as cold germs are spread through hand contact. Flossing dramatically reduces the potential for periodontal treatments. Stress reduction reduces the number of visits to physicians. And whether the savings are a few dollars for cold medicine or thousands of dollars for periodontal work, they add up.
4) Understand your health plan. It’s not exactly like reading a best-selling thriller, but devoting an hour to understanding your health plan can save you hundreds of dollars. Does your plan cover acupuncture or massage? What’s the cost difference when you use an in-network provider? Review your family’s needs each year and select the plan option that works best. The plan with the lowest premium may not be the most cost-effective. And simply sticking with the same plan from year to year may not reflect the changing needs of your family as kids grow up and adults encounter new health challenges.
If your employer offers a flexible spending plan, consider it—these allow you to use pre-tax dollars for some health care and dependent-care expenses, and employers may contribute as well. Another possible alternative is a health savings account (HSA), which is linked to a high-deductible health plan. If you don’t spend all the funds in an HSA, they roll over and grow with interest from year to year. Employers sometimes make an HSA contribution.
5) Pick your spots. Unless you have an actual emergency, the emergency room is about the most expensive place you can get medical care. Use an urgent care center instead, or call your regular physician to see if you can get a same-day appointment. Consider a retail health center inside a discount store or other high-traffic location. They may not have the same personalized service as a physician’s office, but they offer good prices and convenient hours.
Another important resource in any moment of angst: your health insurance broker. They have the knowledge, resources and experience to guide you through most situations. Their services are part of what you pay for, so use them!
Valerie Clark is president of Clark & Associates, which helps people find affordable health insurance in Nevada.