By Kenrya Rankin
$3,157. That's how much the average American paid out of pocket for health care in one recent year. (We can think of better uses for your green: say, new running sneakers or that awesome Garmin GPS watch.) Alarmingly, a Harvard Medical School study found that 62 percent of all bankruptcies are caused by medical bills or loss of income due to illness. Here are seven simple steps to cut your health care costs -- no messy calculations necessary.
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Your Savings, Decoded
Use this key to see how much moola these strategies could net you. Ca-ching!
$ You save < $100
$$ You save $100 to $1,000
$$$ You save > $1,000
Double-check your insurance.
Never assume that your doctor is still in your insurance network. Physicians typically reevaluate their list of accepted plans at least annually, so ask each time you book an appointment. If your MD now works with your plan on an out-of-network basis, her services will often be covered at a much lower rate or not at all. Seeing another doc in the same practice? Even if the facility accepts your insurance, he might not. The same goes for referrals.
Know how to haggle.
Don't worry -- you don't have to go all swap meet at your next appointment. It's about negotiating. A 2005 survey found that 70 percent of those who attempted to lower their hospital bills were successful. Sherri Dumford, the director of operations for the Healthcare Billing and Management Association, says that the uninsured and those with a recent financial hardship probably have the most luck. Use healthcarebluebook.com to find the fair price, or check hospitalcompare.hhs.gov to see what Medicare will cover, then call the billing manager and offer that amount. If you can pay cash up front, many providers will slash prices by as much as half, according to the Consumers Union. Also, if you're undergoing several procedures at once -- say, having your tonsils and adenoids removed -- ask for a discount. Insurance companies pay a reduced amount for each procedure after the first one, and you should too.
SAVINGS: $ to $$$
About 80 percent of medical bills contain mistakes -- to the tune of $10 billion annually, according to Medical Billing Advocates of America. Wouldn't it be nice if you had a personal assistant to eyeball each bill and check for goofs? Now you do. Simplee.com is a free online tool that tracks what you spend on health care. It links your insurance plans (health, vision, dental) and health-spending accounts so they are displayed on one dashboard. A user-friendly breakdown of each bill shows what insurance covers and what you owe, and the site examines each claim to identify errors, such as duplicate charges, billing for a service that should be free, or being billed for an out-of-network provider when you shouldn't be.
Get an agent.
Employer plans usually provide the best value, but it's possible to do better on the individual market if you don't have a preexisting condition. "In some cases, you can save if you're willing to disclose your medical history," says Bruce D. Benton, the president of the National Association of Health Underwriters. Find a health insurance agent at nahu.org; because their fees are paid by insurance companies, it won't cost you anything out of pocket. You also have access to more plans, so you can tailor your coverage. Skip benefits you don't need, such as eyeglasses and maternity, and consider an inexpensive, high-deductible plan if you're rarely sick.
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Bypass name brands.
Everyone knows that generic drugs are generally cheaper. But you'll really save at big-box stores: Target and Walmart provide hundreds of generics for $4 for a 30-day supply and $10 for a 90-day supply. Speak up when your doc is writing your script: Not all physicians automatically ask for generics, and a study found that doctors are generally unaware of the cost of the medicine they prescribe. "The active ingredients in generics are the same as in name brands, but the manufacturer doesn't incur the same costs as the manufacturer who developed the drug," says Janet P. Engle, head of the Department of Pharmacy Practice at the University of Illinois at Chicago College of Pharmacy. If you don't have a chronic condition that requires a brand-name drug, consider electing generic-only prescription coverage to reduce your premium; Benton says most plans now offer this option. Just be aware that you will probably pay full price in the event that you do need a brand-name drug. Don't be shy about asking your doc for medication samples. About half of patients request them, says Wanda Filer, MD, a board member of the American Academy of Family Physicians.
Hit the warehouse club.
No generic available? The Consumers Union found that the difference between the cheapest and priciest sources of common brand-name drugs was as much as 29 percent, which could cost you an extra $2,000 annually. The organization also found that warehouse clubs often offer great savings. And you don't always have to be a member to benefit. "When you arrive, simply explain that you're visiting the pharmacy," says Carrie Foster, a spokeswoman for Sam's Club.
Enroll in your FSA -- for real this time.
You know using your employer's flexible savings account can help cover medical expenses by deducting money from your paycheck before it's taxed. But while 85 percent of all companies offer FSAs, just 22 percent of employees use them. It's hard to figure out how much to put in -- too little and you won't maximize your savings, too much and you leave money on the table (it can't be rolled over from year to year). Use the calculator at wageworks.com/employee/health-care/calculators/fsa.aspx, which provides the average spent on eligible expenses. With the free app Expensify, you don't have to scan receipts to get reimbursed. Just snap a picture of purchases and it generates an expense report for you.
Related: 6 Ways to Rehab Your Bad Habits
How the Government Can Help
The 2010 Patient Protection and Affordable Care Act is being rolled out now through 2014. Use our timeline to learn about some of its provisions that can save you big money.
No lifetime limits on coverage
You're no longer subject to ceilings on how much your insurance company will pay for essentials, such as hospital stays.
Crackdown on rate hikes
Insurance companies that want to increase rates by 10 percent or more must submit a request to state or federal reviewers. See what your company is up to at healthcare.gov.
Free preventive services
You now pay nothing for mammograms, cervical cancer screenings, well-woman visits, breastfeeding support, STD testing, and domestic-violence help.
Bundles of savings
More doctors and facilities began bundling care. For example, if you have surgery, you'll soon be charged a flat fee for all the doctors involved instead of getting separate bills from the surgeon, the anesthesiologist, and the pathologist.
Taking care of kids
The Children's Health Insurance Program gets a funding infusion so states can continue to provide care for kids in need.
Good-bye to gender discrimination
Insurance companies will no longer be able to deny women coverage because of such preexisting conditions as pregnancy or breast cancer or to charge them more, as they have in the past. It's about time!
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By Kenrya Rankin