Even with health insurance, you may have high medical bills. In fact, some people skip medical treatments, procedures and medications because they cannot afford to pay for them. Skipping necessary care, of course, can lead to more health issues. This FAQ presents things you can do to help avoid high medical bills. Investing a bit of time in these areas may save you thousands of dollars.
Understand Your Health Insurance Coverage
Understand your insurance coverage and benefits and what is not covered before you need to access care. Review your health insurance “Evidence of Coverage” and the shortened “Summary of Benefits” documents. They give information on provider and pharmacy networks, the drug formulary, your costs including copays, deductibles, out-of-pocket maximums, co-insurance and more. Understand coverage for in-network and out-of-network services. It is especially helpful to learn about coverage in emergencies since various hospitals charge different amounts for the same care and some facilities may not be in-network with your health plan. (Also, some insurers also may not cover certain procedures received at an ER.) The federal Hospital Price Transparency Rule that went into effect on January 1, 2021 mandates that hospitals disclose charges for each service or item they provide. Learn more about various health insurance costs here. And know that some insurers won’t cover certain ER services.
When Filling Prescriptions, Shop Around for Competitive Prices
Many people always go to the pharmacy closest to their home. However, prescription medication prices vary widely and it is often worthwhile to shop around to avoid high medical bills.
Mail order pharmacies like Mark Cuban’s Cost Plus Drug Company and Aledade are “public benefit corporations.” These pharmacies are between non-profit and for profit companies, so their pricing is very competitive. For example, Mark Cuban’s company sells the generic multiple sclerosis medication Dalfampridine ER, generic for the brand Ampyra, for $11.40. Its retail price is $1,394.30. Cost Plus Drug Company formerly only sold generic medications. But in April 2023, the company announced it planned to offer some brand name diabetes medications from Janssen (part of Johnson & Johnson).
Other online mail-order pharmacies like Healthwarehouse.com offer brand drugs for less than other pharmacies. Verify that the pharmacy you select is a credible pharmacy. Consumer Reports published an article in April 2022 with several online pharmacy options.
A website like GoodRx can point you to a pharmacy near you with the lowest price on a specific drug. Be careful what you share with GoodRx as it was fined $1.5 million by the FTC in February 2023 for sharing sensitive patient data with advertisers such as Google and Facebook without patient consent.
And always ask what the price is with and without insurance. Sometimes the price is lower if you don’t use your insurance. Of course, Costco is often very competitive.
Seek In-Network Providers Before Out-of-Network Providers
Before going to an out-of-network provider or facility, look to see if there are in-network alternatives. This is because health insurers often cover a greater percentage of the cost for in-network than for out-of-network facilities and providers. Sometimes in-network providers are known as “participating providers.” These providers have contracts with your health insurance company.
Verify That Providers and Facilities are Actually In-Network
It is not uncommon for health insurers to have out-of-date provider networks. You might start by looking at your insurer’s portal or calling your insurer and asking for in-network providers and facilities. Then, confirm with the provider or facility directly that it is in-network with your insurer for your specific type of plan (PPO, HMO, etc.). The reality is that it is common for provider networks to be out of date. In 2018, CMS found that 52% of providers had at least one inaccuracy. As such, an extra layer of protection is a letter or email to your health insurance company explaining you selected a particular facility or provider because they (the health insurance representative you spoke with on the phone on a particular date) confirmed that your selection is in network.
In January 2023, three senators called out Aetna, Anthem, Humana, and UnitedHealthcare for mental health “ghost networks.” These ghost networks are networks that list providers no longer in-network – sometimes because they aren’t accepting new patients or perhaps because they’ve closed their practices. And of course providers are added to or deleted from networks constantly so information changes. In a February-March 2023 study of consumer experiences with health insurance, 45% of insured adults who considered themselves in fair or poor mental health rated their insurers negatively when it came to availability of mental health practitioners.
Ask For Cost Estimates Before Getting Medical Care
Before getting medical procedures, treatments, or medications, ask for a cost estimate. The No Surprises Act that went into effect on January 1, 2022 mandates that, whether or not you have insurance, medical facilities and providers must give you a “Good Faith Estimate” that is reliable and accurate. And they must give you these when you schedule a service or when you request cost information. The estimate must also include charges from “co-providers” when their services will occur with the main service. Then, if the provider charges more than $400 over the Good Faith Estimate, you can challenge the bill.
As of January 2021, hospitals were supposed to disclose their negotiated prices for all items and services. Unfortunately, as of July 2023, only about 36% were compliant with the rule. Even if their prices are not posted, however, you can ask hospitals for their prices because they are required to provide estimates upon request. On July 1, 2022, a federal rule went into effect requiring health plans to disclose the negotiated prices they pay physicians and facilities for each item and service they provide. You can read more about the Transparency in Coverage rule and the requirements rolled out through 2024 here.
Unfortunately, results of a secret shopper study published in JAMA in September 2023 found that for various procedures, hospital pricing posted online was often different than hospital pricing communicated to callers over the telephone. As such, you may want to reconfirm in writing with a hospital your understanding of the procedure’s price before you move forward.
With cost estimates, you may learn it is less expensive to go to one doctor or facility than to another and help prevent high medical bills.
Ask If Medical Care Is Necessary And If It Requires a Prior Authorization
It’s a good idea to ask your doctor if certain medical care is necessary. Also, find out if your health insurer considers this care to be medically necessary. Why? Because if it doesn’t, your cost could be very high. And if it doesn’t, you can ask your doctor if there is an alternate procedure or test that is less expensive and considered medically necessary by your insurance company. Finally, check with your insurance company to see if the treatment or procedure requires a prior authorization. If this authorization is required and you get the medical care without it, your insurer may deny your claim.
Ensure Each Blood Test is Covered By Your Health Insurance Plan
Sometimes physicians order blood tests that aren’t covered by health insurance because they are considered not medically necessary. And these blood tests can cost hundreds and even thousands of dollars. As such, prior to getting your blood drawn, ask your insurance company if each test is considered medically necessary and thus covered under your plan. If a test is not covered, then ask your provider if there is an alternative blood test that he or she can prescribe.
Confirm Your Medical Care Has a Billing Code
Confirm with your doctor that the recommended procedure, treatment or service has a specific medical code so it will be billed correctly. If there isn’t a code, your insurer might deny your claim. And if there isn’t a specific code, ask your physician if there is a code that he or she can use that covers parts of this treatment. Different codes describe different things. For example, International Classification of Diseases-10-Procedure Codes (ICD-10-PCS) describe inpatient treatments and services. Current Procedural Terminology (CPT) codes from the American Medical Association together with Healthcare Common Procedure Coding System (HCPCS Level 1) from the Centers for Medicare and Medicaid Systems (CMS) codes describe outpatient medical procedures and services. And HCPCS (Level 11) codes are used for medications, supplies and equipment.
Shop Around for Facilities and Providers That Have the Most Competitive Prices
- Emergency Rooms and Urgent Care Centers: Be proactive and check local hospital ER and urgent care centers before you need them. If you understand costs ahead of time, have enough time, and are not taking an ambulance, then you can go to a facility with the most competitive prices.
- Medical Imaging: It is often the case that procedures such as MRIs are less expensive at private imaging centers than they are at hospitals. In fact, one analysis from a Blue Cross Blue Shield subsidiary in September 2023 found that colonoscopies can cost up to sixty percent more when they are done in a hospital outpatient department (HOPD) versus at an ambulatory surgery center (facility that performs outpatient procedures).
- Blood Tests: Blood draws at hospitals and/or doctors offices are often more expensive than at local labs such as Quest or LabCorp. The same client above mentioned a simple blood test that cost nearly $1,000 at a hospital. She had another blood test with a $900 price tag because her insurance company deemed the specific test experimental/investigational. (She asked her insurer if it would not change her since she didn’t know the test was experimental. The insurer told her it would do this one time. So just by asking, she saved $900.) To get pricing, the lab may ask you to provide the CPT code for a specific test. Doctors or labs may have this information.
- Location of Care: Today, there are many options for care. You can visit a provider in person and often do a telehealth visit. Depending on the care you need, urgent care facilities may be a less expensive alternative to Emergency Rooms. Of course ERs often have greater capabilities than urgent care centers.
- Procedures: In addition to facilities, providers often charge different amounts for the same procedure. It is a good idea to compare prices and quality of care among different providers to prevent high medical bills. One article pointed out that high volume orthopedic surgeons have better outcomes and lower prices than surgeons who perform fewer procedures.
Ask About Added Charges
Many hospitals charge a “facility fee” in addition to the fee charged by the physician. Since almost 3 of every 4 doctors are employed by hospitals, health systems, and other corporations including health insurance companies and private equity firms, the number of facility fees charged has grown exponentially. Facility fees can be quite high – sometimes nearly as high as the cost to see your physician. Sometimes these fees are also for medical equipment or supplies. Some states are pushing back against facility fees. Asking ahead of time sets your expectation for the total cost.
Read Carefully and Sign Printed Instead of Online Contracts
Oftentimes providers and facilities have patients sign contracts on computers or iPads. The issue with doing this is that sometimes providers put multiple contracts into the same online contract. For example, one contract might give the facility permission to treat you. Another contract might say you will pay whatever the provider or facility charges you. Rather than signing contracts on computers, ask them to print out the contracts for you. Review them carefully. Only sign parts of a contract that make sense to you. For example, do you want to sign a document agreeing to pay whatever they charge for a service? The reality is that hospitals often upcharge care by double digit multiples. If you sign the contract, you are on the hook for payment.
With the contract printed out, you can cross sections off and write additions prior to signing it. Then, for your records, it is a good idea to take a copy or a photo of the actual document you signed.
And remember that the Emergency Medical Treatment & Labor Act (EMTALA) requires hospitals to care for patients in emergencies whether or not the patients can pay for the services.
Keep in Mind When Paying Medical Bills
- Wait for The Health Insurance Explanation of Benefit: If you have insurance, wait to pay bills until you understand what your insurance covers. In-network providers have negotiated rates with insurance companies. These providers should only charge you your portion of the negotiated rate. At times, providers send out bills quickly and their bills don’t reflect insurance coverage. And sometimes provider bills charge more than their negotiated rate. The only way to find out is to ask what your health insurer covers and what the provider is allowed to charge.
- Cash vs. Insurance Prices: Oftentimes there are different prices for patients with and without insurance. Always ask about the cash price. In fact, after looking at nearly 2,4oo hospitals, a study published in Health Affairs in April 2023 found that in 47 percent of cases, cash prices were less than the median commercial prices. And if there is no discount if you don’t have insurance, ask the provider if it will give you a discount. Very often providers are willing to do so.
- Review all Bills for Accuracy: Always review bills because it is not uncommon for bills (especially hospital bills) to have mistakes. Maybe the patient didn’t receive certain medications or treatments. If a bill seems high, ask for a more detailed bill to verify all the charges.
- Never Hesitate to Negotiate: If a bill it too high, you can often negotiate the cost down. Many providers are willing to write off parts of bills. In fact, oftentimes hospitals give discounts as incentives to get bills paid quicker. This study showed that 78% of patients who challenged a medical bill had the bill reduced or removed altogether.
- Ask About Financial Assistance Programs: Many facilities offer financial assistance programs. In fact, the Affordable Care Act requires tax exempt hospitals to have financial assistance policies..
- Be Careful About Using Credit Cards: Some people advocate not paying medical bills with credit cards. One reason is that you might pay interest for several months depending on the size of the bill and how much you pay off each month. It is better to see if the provider or hospital has a low or no interest payment plan option. Also, starting in 2023, any unpaid medical bill of ≤ $500 doesn’t appear on a person’s credit report.
- Be Extra Careful About Getting a Medical Credit Card: Although some offer deferred interest with a 0% APR interest during an introductory timeframe, if you cannot pay off the debt 100% prior to the end of the this period, you’ll often owe all of the interest you would have incurred going back to the date of your first charge. Also, unlike debt from a doctor or healthcare facility, debt from medical credit cards isn’t considered medical debt because it is money owed to a bank. And this fact makes a difference because the leading 3 credit bureaus Equifax, Experian and TransUnion drop most medical debt from individual credit reports and credit scores.
If You Are on Traditional Medicare, Consider Purchasing Medigap Supplemental Insurance
Unlike Medicare Advantage health plans, traditional fee-for-service Medicare plans do not have annual limits on out-of-pocket expenses. But individuals with traditional Medicare can purchase supplemental insurance called Medigap. Medigap helps cover some health care costs including deductibles, copays and coinsurance. Keep in mind that if you want Medigap insurance, the ideal time to purchase it is when you are first eligible for Medicare. If you try to purchase Medigap after you’ve been on Medicare, you will likely need a health screening, could be charged more, and may be denied altogether.
Investigate If You Qualify for a Medicare Savings Program
You might qualify for a Medicare Savings Program if your income and resources are below a given level.
You Might Be Eligible For a Tax Deduction
Depending on how much you spend in a year and what is reimbursed, you might qualify for a tax deduction. For the 2022 tax year, you can deduct qualified, unreimbursed medical expenses that are over 7.5% of your adjusted gross income. For this reason, hold onto your medical bills so you understand how much you’ve spent on healthcare over the course of a year.
Flexible Spending Accounts (FSA)
If you have one, use you Flexible Spending Account (FSA) for pre-tax medical care and items.
Appeal Denied Health Insurance Claims
It can be very frustrating to receive a health insurance denial when you’ve been paying your insurance premiums month after month. You likely bought health insurance for peace of mind, yet in your time of need, your insurer denies your claim.
Health insurers, like other corporations, are focused on their bottom line. Their objective is to make money, and they’re often experts at denying or delaying claims. Fortunately for them, in 2021, policyholders of Affordable Care Act non-group qualified health plans (QHPs) appealed less than 0.2% of denied in-network claims. But you have nothing to lose and might get the medical care you need if you appeal your denial. In 2022, for example, 68% of policyholder Independent Medical Review appeals (AKA external appeals in California) through the Department of Managed Healthcare resulted in policyholders receiving the previously denied medical care.
The appeal path you take depends on if your health insurance is an ERISA or non-ERISA plan. You have more options with a non-ERISA plan. You typically begin with an internal appeal to your health insurance company. Then, if your insurer doesn’t reverse its denial, speak with an experienced health insurance denial attorney. The reason is that external IMR appeal decisions are difficult to overturn and a lawyer may counsel you to take a different route instead of filing an external IMR appeal.
Attorney Scott Glovsky helps ensure his clients are not taken advantage of by insurance companies. Scott will take on an act of bad faith on the part of an insurance company, forcing the company to fulfill its promises to you and other policyholders.
So if you receive a health insurance denial, we may be able to help. We have many resources on our website, including how to appeal a health insurance denial. And if your insurance company acted in bad faith, you may be eligible for more than your initial claim.
Contact The Law Offices of Scott Glovsky
Reach out to the Law Offices of Scott Glovsky. We’ve been fighting for the rights of insurance policyholders for over two decades. Having worked with insurance companies before starting this firm, Scott understands how to navigate the insurance company system and can help.