Health care costs for the American family continue to rise, outpacing earnings and inflation. According to the Milliman Medical Index, the cost of health care for a family of four is $28,166. Most people are covered by an employer-sponsored plan, the most cost effective option, but industry experts say there is more you can do to lessen the financial burden on your family.
“My advice is to do your homework, understand your options and find out how much the services you need will cost,” said Paul Spencer, the vice president of managed care and revenue cycle services for the Froedtert & MCW health network. “If you are planning the health care expenses for your family, assume you will hit your deductible every year and save accordingly. Take advantage of the flexible spending account or health savings account your employer may offer.”
Understand your insurance plan and the providers included
Before you get medical care, it is important to understand the specifics of your health care plan, including what is covered by your insurance and what you may need to pay. Unless it is an emergency, find out if the providers you want accept your insurance plan. If they do, they are in your network. When a provider is in your network, there is a contract between the provider and your insurance company and discounted rates are negotiated.
If the provider is out-of-network, you will probably pay more for care and may be responsible for the full bill. If providers or health networks you want to use are not in your plan, encourage your employer to add them.
Important billing terms:
- Deductible: The amount you must pay annually toward health care expenses before insurance starts paying benefits
- Copay: A flat fee you pay for health care expenses.
- Coinsurance: The percentage of your health care expenses you pay after meeting the deductible.
- Out-of-Pocket Maximum: The maximum amount you have to pay, per year, under your insurance plan. This amount includes deductible and coinsurance amounts. Copays are not included in the out-of-pocket maximum.
The price of medical care varies depending on your insurance plan and the location you choose for care – even if the provider is in your network. A well-studied example is the cost of an outpatient magnetic resonance imaging (MRI) scan. In the same geographic area, an MRI can cost between $300 and $3,000.
While there are certain “shoppable” services in health care, consider your condition and the care it could require in the future.
“Think of the MRI as one component of the episode of care,” said Jeff Zavada, the president of Exceedent, a third-party administrator that specializes in serving self-funded employers locally and nationally. “The price difference for the MRI is becomes secondary if you need to have surgery following that MRI because you will meet your deductible and possibly hit your out-of-pocket maximum. My advice is to go to a quality institution with the data to demonstrate positive outcomes and where your care flows seamlessly from diagnosis to treatment.”
Get an estimate
Health care pricing doesn’t have to be a mystery. You can do your research to learn your out-of-pocket cost for a particular appointment or procedure before you’re billed. To do this, seek out and take advantage of pricing transparency tools. Some health networks will require you to make an appointment before providing an estimate, others have more consumer friendly policies in place.
“The Froedtert & MCW health network provides an estimate for anyone who asks,” Spencer said. We have a team of health care cost estimators in our billing department who will do an eligibility check on your insurance. Based on that information, they can provide you with an estimate of the cost – specifically your out-of-pocket cost – based on your insurance benefits. We also have this information available online, through our website’s cost estimation service page.”
In order to ensure your estimate is accurate, know the name of the service (for example, “MRI of the knee with contrast”), and ask your provider’s office for the billing code for the service. This is called the Current Procedural Terminology (CPT) code. The CPT code is part of your medical record and is used for tracking and billing. This five-digit numeric code is maintained through the American Medical Association and identifies the type of medical, surgical or diagnostic care you will receive.
Choose the right care
When you need medical care, there are a variety of options available, from a hospital emergency department (ED), to an urgent care clinic, your primary care provider’s office or virtual care (speaking with your provider via video chat).
The ED may come to mind first, but it is the most expensive choice and may not always be the right choice for care. One study found that 27 percent of ED visits could have been managed in a clinic setting. Another study, funded by the National Institutes of Health, found the average cost of a visit to the ED for the 10 most common outpatient conditions was $1,233. Some of the conditions – like an upper respiratory infection or a sprain – could have been treated in a less urgent setting for a lower cost.
Call 911 and seek care in the ED for these symptoms:
- Sudden or severe pain, including chest pain
- Difficulty breathing or shortness of breath
- Sudden confusion or disorientation
- Coughing or vomiting blood, severe or persistent vomiting or diarrhea
- Uncontrolled bleeding of any kind
- Headache with stiff neck or fever
- Sudden dizziness, weakness, numbness, or change in vision
Same-day care at an urgent care clinic, walk-in clinic or virtual clinic is appropriate if the condition does not pose an immediate, serious threat, if your primary care provider is not available or if you do not have a primary care provider.
Use preventive services
The Affordable Care Act (ACA) requires many private health plans to provide certain preventive services to people, such as colorectal cancer screening, cholesterol screening and flu shots, for free. If you take advantage of these benefits, your provider may be able to detect serious or life-threatening conditions earlier and help you reduce future health care costs. According to the Centers for Disease Control, “chronic diseases, such as heart disease, cancer or diabetes, are responsible for seven out of 10 deaths each year and 75 percent of the nation’s health spending.”
“Become familiar with your benefits,” Zavada said. “Preventive care such as annual wellness visits and routine screenings are often offered at no cost to the employee, and in some cases, come with incentives. Use all of the resources available to you to keep yourself and your wallet healthy.”
Being an engaged consumer of health care gives you the knowledge and the power to make decisions that will help control your health care costs. This includes enrolling in a plan that meets your coverage needs, choosing the right care for your condition and participating in preventive services. Ask questions, be proactive and most importantly, be your own advocate.
For more tools to become a savvy health care consumer and information about insurance plans that include the Froedtert & MCW health network, visit froedtert.com/plans.