Managing The High Cost of Medical and Insurance Expenses

We all know someone that has forgone necessary medical treatment due to the cost of the procedure. Routine healthcare can be unaffordable, not to mention medical emergencies. By understanding and managing the costs, you can receive the healthcare you need and still maintain your financial security. This article will explain how to manage the cost of your healthcare.

Understanding medical costs

Here are a few of the medical expenses that can threaten your budget:

GP visits: Even routine healthcare incurs a cost for the visit. Depending on your doctor’s practice, the cost can be higher than the Medicare allotment, forcing you to make a decision about your care.

Specialist visits: Specialists can, and do, charge significantly higher fees for their consultations. As their title suggests, they specialize in the treatment of the illness you were referred for and can pretty much name their price.

Prescriptions: The high cost of prescriptions is dependent on a few things. Whether you use name brand or generic alternatives can make a large impact on the price. Also, where you buy your prescriptions can have an effect on their cost. Discount chemists are likely to be cheaper than more popular pharmacy chains.

Diagnostic Procedures: It is a given that if you have a serious complaint your physician will order tests to diagnose the problem with certainty. Pathology/lab tests can hurt your budget, but X-rays, MRI’s and scans are definitely expensive. Medicare does not always pay for tests ordered by your GP.

Hospital Stays: Costs can skyrocket depending on the length of stay and the procedures you have done. Unless you are sent to a public hospital, the charges can be catastrophic to your bank account. Surgery causes further financial set-backs since you are billed for the surgeon, assistants, anesthetist and any dressings used.

Understanding insurance

Perhaps you have elected to take out a private insurance plan to help with those unexpected medical bills. Here are some of the costs associated with your insurance plan:

Premiums: The amount of your premium will obviously depend on the coverage you have selected. Each plan has different levels of coverage. The more coverage, the higher the premium.

Deductibles: This is the amount you need to pay before your insurance pays anything towards your treatment. The amount of your deductible directly affects the cost of your premium.

Copay amounts: This is a fixed amount you pay out of pocket dependent on the level of coverage you have opted for. Some policies are based on percentages, while others have a fixed copay amount.

Managing expenses

Now that you understand the costs associated with medical and insurance, let’s look at some ways you can manage those costs:

1. First and foremost, you need to scrutinize your health insurance plan. Know exactly what it will and will not pay. Talk to a representative of the company to clarify anything you don’t understand or need further clarification on. Do your research to find a plan that meets your needs.

If you don’t have private medical insurance, look for a doctor or clinic that charges what Medicare pays (sometimes referred to as bulk-billing). Ask to be referred to a public hospital. If you are prepared to be on a waiting list, your procedure and hospital stay will probably be covered by Medicare.

2. When possible, plan ahead for your healthcare. Do your homework and research the options in your area, comparing costs and wait times. This also affords you the opportunity to make room in your budget for expenses you are likely to incur. Consider setting aside money each month in a dedicated healthcare account.

3. Ask if you can negotiate any prices. Sometimes seniors or concession card holders are given a discount for services. It doesn’t hurt to ask! If you have researched the cost of a procedure in your locality, you will have some leverage for negotiations. Be upfront about any financial issues you may have. Ask if there is a discount if you pay in full, or if the provider will accept a payment plan.

4. Explore your retirement savings account (in Australia, it’s called superannuation) to see what healthcare warrants a withdrawal. Check into it before you actually need it to ease your mind. If an unthinkable medical emergency arises, you will need to know how to go about making the withdrawal if it’s covered. There are restrictions, so it’s best to know about them in advance.

5. Last, but definitely not least, practice preventative healthcare. Money spent on regular check-ups is likely to be less than the cost of a health emergency. Eat healthy, exercise and stay pro-active on your well-being. If you have private insurance, look into any covered health plans (i.e. fitness centres, dieticians, etc.). By staying healthy, you might not need to worry about emergency medical expenses.

Medical and insurance costs can be mind-boggling. Knowing your options and resources for health care and staying healthy are some things you can do to manage risks.