4 Habits for Saving Money on Routine Family Medical Care

The following guest column is from Paul at www.healthharbor.com.  HealthHarbor is a site devote to helping people be smarter consumers of healthcare.  It provides ideas and guidance on saving money on healthcare, getting the most from your health coverage, and hosts an online community devoted to healthcare spending topics.

As healthcare expenses become a larger and larger component of a typical family budget, people are continuously looking for ways to keep them in check.  Like any other component of your budget, the financial habits you keep can make a big difference on how large your annual healthcare tab is.  While there are dozens of things that can shave costs off of a healthcare tab and medical bills, here are four habits that any family can incorporate and, if done consistently, can easily add up to hundreds of dollars of annual savings, or more.

Habit #1: Inventory Your Coverage. Doing a thorough analysis of your health coverage on an annual basis is a habit that can save you and your family significant money in the long run.  It can be tempting to rush through your health coverage forms whenever your open enrollment period rolls around, simply carrying forward your prior year choices, or estimating your coverage needs with little research.  Instead of rushing through this process, sit down with your Explanation of Benefits (EOB) forms from your year’s worth of healthcare expenditures.  Understand where there may be gaps in your coverage and how you can adjust your insurance to maximize it.  Are you getting significant out-of-pocket costs due to a recurring non-covered procedure that a child requires, such as a therapy?  Is your family a heavier user of preventative care than you may have assumed, leaving you with the expense for care above and beyond your plan’s baseline?  If you work for an employer who offers multiple insurance options, you may find that you’ve been selecting a plan that is either too limiting or too complex for your family’s needs, and should explore an option that you assumed was not for you.  In other cases, you may find that shifting entirely to a spouse’s insurance is the smartest move for your family.  See HealthHarbor’s special article on When it May Make Sense to Drop Your Employer’s Coverage for more ideas.  The point here is not that people don’t understand this stuff – intellectually, they do.  The point is that they often don’t take the time during open enrollment to really review their situation.

While you’re at it, ensure that options such as Dental and Vision coverage make sense for you.  Vision insurance covers a very limited scope of services – usually routine check-ups and part of the cost of glasses or lenses.  Eye injuries or infections, for example, are usually covered by your medical policy.  Ensure your particular Vision or Dental plan actually has the potential to cover its premium cost for your family.  You may be better off simply saving in your Flexible Spending Account (FSA) for those expenses.

Habit #2: Match the level of care with the illness. You’ve probably heard the term “don’t kill a fly with a sledgehammer”, and that saying sums up part of what is wrong with our healthcare system.  Many people seek the wrong level of care for their ailments, and it ends up costing them and the health system money.  When my first child used to have earaches, we would take him to his doctor.  We knew he had an earache, and we knew that he may need either antibiotics or eardrops, but the doctor was the gatekeeper for those meds.  The typical visit cost about $100, and that cost doubled if we went to Urgent Care.

With our second child, we’ve wised up. When she has an earache, we immediately seek out our nearest Physician Assistant-staffed walk-in clinic, such as MinuteClinic.  We still have someone look in her ear, and we still end up with the same antibiotic or eardrop, but the cost is $59.  Anyone who has kids knows that these seemingly small costs add up, and finding the walk-in clinics near you, whether they are operated by a chain, a local health system, or a big box retailer can save alot of dollars over the course of a year.

One tip – make sure these walk-in providers aren’t considered “out-of-network” by your insurer.  While it defies logic, some plans would stick you with an entire $59 walk-in clinic bill while your charge for going to a much more expensive but in-network urgent care would simply be a $10 copay, even though it costs the insurer more.

Habit #3: Read your EOBs. This may seem obvious, but reading the EOB that you receive from your insurance company and comparing it with your medical bill is a habit everyone should have.  There are several points in the medical billing process when a key error can be one, and most of the time the errors do not work to the patient’s favor.  First, the provider may record the wrong insurance plan in the system, dooming the bill from the start.  Second, your clinic or doctor may enter the wrong procedure in their system.  You take your child in for one vaccination, and the procedure is incorrectly recorded as a shot to treat a disease.  It may cost more, and in some cases can turn that charge into one that is “non-covered” by the insurer.  Third, the insurer may interpret the charge incorrectly, and pay the wrong rate or deny the charge altogether, sticking you with the bill.  This could occur because the charge was billed incorrectly or they processed the charge using the wrong plan.  Fourth, mathematical errors happen which should be apparent when you review your EOB.

While there are more than four instances when EOBs can clue you in to a costly error, these are some of the more common ones to watch for.  If you do find an error, begin by calling your insurer.  If that doesn’t get you anywhere, see if your doctor’s office can help.  If you hit a dead end, ask if your employer’s benefits department, the actual buyer of the insurance plan, can step in.

Habit #4: Know the finer points of your FSA. Anyone who reads a personal finance blog is probably well aware of the ability to save for medical expenses with pre-tax dollars.  While most people use their FSA to cover premiums, deductibles, and perhaps copays and medications, there are a few items (some surprising) that many families overlook when considering what they can cover with pre-tax dollars.  Here are a few:

• Day Camp: As part of dependent care expenses, you may pay for day camp through your FSA if it allows the parent to work

• “Small” Consumer Health Expenses: Your FSA can cover many items that may end up on your grocery list, including Tylenol, Advil, Tums, Neosporin, Pepto-Bismol, cough syrup, sunscreen, and hand sanitizer

• Home Improvements: The cost of removing lead paint in order to prevent potential a child from ingesting it can be reimbursed (but not the painting), as can radon gas abatement if directed by a physician

• Massage, Acupuncture, or a Personal Trainer: If prescribed by a physician for a medical condition, these items may be covered

It is worth mentioning here that FSA dollars have the “use-it-or-lose-it” clause (unlike Health Savings Account dollars).  While you may find there are more expenses than you realized for which your family can use FSA dollars, always be a bit conservative when allocating your yearly FSA amounts.