Managing health care costs

Quick answer:

It’s been well covered that health care costs are rising. But there are things you can do to protect yourself and manage costs.

  • Select the best insurance plan for your needs
  • Track your medical expenses
  • Ask questions and correct errors

Every year, there is an open enrollment period for insurance, whether you get your insurance from an employer or a public exchange. Take these times to review your own coverage and financial situation to make sure you have the best option for your needs.

Choosing insurance

There are a few different components to health insurance. Premiums are the amount you and an employer will pay each month for coverage. Deductibles are the amount of money you pay before your insurance policy starts paying for health care.

Understanding your financial situation can help you make the right choices for your situation.

  • You can find options with lower premiums, but they may offer fewer choices of doctors. You may also need to cover more upfront costs before your insurance begins to pay.
  • If you want a lower deductible, you may have to pay higher premiums and could have greater choice of doctors.

Health spending accounts

Health spending accounts let you put aside pre-tax dollars for out-of-pocket, qualified medical expenses, often by your employer directly from your paycheck. Health savings accounts are often only available on high-deductible plans and allow you to carry your balance from year to year. Flexible spending accounts are more readily available but funds cannot usually be carried over to a new year.

Tracking medical expenses

It makes financial sense to keep track of your medical expenses.

You might be able to deduct medical expenses on your income tax return. You may deduct only the amount of your total medical expenses that exceed 10% of your adjusted gross income or 7.5% if you or your spouse is 65 or older. These are Federal guidelines. States may have their own.

You may need records in case of a car accident or an accident at work, which are usually handled by groups other than your health insurance.

You may also need documentation if you request a reimbursement because of an incorrect charge.

You should keep:

  • Bills you receive from doctor visits or hospital stays, including the date
  • Written explanations of benefits (EOB) or other correspondence from your insurance company
  • Receipts
  • Referrals
  • Information on premiums

Ensure your bills are correct

All procedures and tests have medical billing codes. These are hard to understand, and errors can be made, like accidentally applying the wrong code to a service.

When you receive a bill:

  • Look at each item and make sure you understand each charge
  • Check that there are no duplicate charges
  • Check that the dates for visits and services are correct
  • Contact your insurance company with any questions about the amount you have to pay or why something may not have been covered