You can't put a price on good health. You've heard the maxim, but in the era of high deductibles, caveat-riddled coverage, hidden fees and a healthcare system in flux, it's taken on a new meaning. Even if you have coverage, how do you budget for your health needs beyond the standard co-pays and insurance premiums? It's a question anyone who's ever received an unexpected medical bill has grappled with. According to a recent poll by Kaiser Family Foundation, 67% of over 1,100 people surveyed worried more about surprise medical bills than covering the cost of rent, food, electricity or insurance premiums.
In the same poll, 39% of insured adults under 65 claimed to have been hit with higher-than-expected medical bills in the past year—with some facing unexpected charges upwards of $2,000.
The truth is, health insurance doesn't guarantee you protection from medical-related debt. That doesn't mean you should pass on the care you need, but you don't have to be blindsided by the costs either. Arming yourself with information, doing your research and being your own advocate can make all the difference—for your health and your bank account. Here's what you need to know.
Avoid "in-network" loopholes
Just because a hospital or clinic is in your insurer's network, that doesn't guarantee the doctor treating you offers the same coverage. This is particularly common with surgical procedures that require multiple professionals. According to the Wall Street Journal, anesthesiologists, radiologists and pathologists are "the most likely to not accept many health plans." Meanwhile, specialists brought in for consultations and even MRI or blood-work could appear as an out-of-network charge on your medical bill.
To avoid added costs, contact the hospital in advance to request that all specialists and lab tests are in accordance with your network plan, and barring that, try to negotiate a rate beforehand. If you're still overcharged, you can contact a billing negotiator, (Consumer Affairs has a list of the best rated), which takes a cut from your reduced rate, or a nonprofit like Patient Advocate Foundation.
You can also advocate for yourself, as Forbes' Kelly Long did after a surgical procedure with an anesthesiologist that wasn't on her plan.
"In my case, I finally called the billing office of the anesthesiologist and asked if they would be willing to accept the amount my insurance was willing to accept," writes Long. "The billing associate consulted her manager and then offered me a 20% discount."
Ask about Facility Fees
Hospitals can charge for the use of their facility and equipment, which can be unavoidable in emergency situations. But if it's not a dire situation, or if your doctor works out of another location besides the hospital, it's possible to avoid the fee. Call ahead, ask about facility fees and whether there's a way to avoid them with a visit to another office.
Check for Billing Mistakes
Ever spotted a mistaken charge on a restaurant check? Medical facilities make mistakes too.
Calculate each item on the bill, and make sure there aren't erroneous procedures you didn't actually have. Here's the big one: Even if the procedure's name checks out on the bill, the CPT (current procedural terminology) code for a procedure could be wrong. You can find a list of codes at the American Medical Association's website. If your insurance company denied coverage for a procedure that you know is in your plan, make sure the code listed matches the procedure you had. If it doesn't, alert both your plan and the medical facility of the mistake.
If you're setting up an appointment for preventative care, check with your healthcare provider about what's covered, specifically the numeric codes for each procedure. Then, when booking the appointment, give those codes to the administrator to avoid mistakes later.
Other mistakes to look out for: double charges of the same procedure, misspelled names and inaccurate dates. Any one of these blips could lead your insurance to initially veto coverage.
Research your options—all of them
In an emergency, researching cost effectiveness should be the last thing on your mind. But if you've done your homework in advance, you'll save yourself a financial headache later. Check with your local fire department about the ambulance services in your area and confirm with your insurance provider that they're in your network. While you're at it, check in about your options for same-day care.
Providers, like Aetna, hospitals like NCH, and online platforms like Doctors On-Demand offer virtual care services, staffed by physicians on call to answer your immediate concerns and help you decide next steps. Most cost as little as a co-pay or offer a flat rate starting around $40.
If you need an immediate in-person visit and can't get an appointment with your primary care physician, you've still got options. Chain pharmacies like CVS offer walk-in clinics ($99-$129) for quickie problems such as sore throats or other minor issues, while urgent care facilities, which can start at $150 without coverage, offer wider services.
If your issue might be life-threatening (chest pains, shortness of breath, vomiting and other red alerts) it's time for a trip to the ER, which usually means a higher co-pay and resulting bill. But in times of crisis, money should be the last thing on your mind. But when you're feeling better, or better yet, before you get sick, you can arm yourself with even more information on ER fees and what to expect over at Vox, where they've launched a project aimed at exposing the hidden costs of Emergency Room visits. You can even help their cause by sharing your own bill.
When you take out a loan for a car, charge something to your credit card, or get a personal line of credit, there is going to be an interest rate that applies to your loan.
A lot of different factors go into what you will be charged, including your own personal credit score. But even those with flawless credit still see a minimum charge that they can't get around. That all goes back to the Federal Funds Rate.
One thing consumers rarely realize is that all of our banks are lending money to each other every night. Banks are legally required to maintain a certain percentage of their deposits in non-interest-bearing accounts at the Federal Reserve to ensure they have enough money to cover any withdrawals that may unexpectedly come up. However, deposits can fluctuate and it's very common for some banks to exceed the requirement on certain days while some fall short. In cases like this, banks actually lend each other money to ensure they meet the minimum balance. It's a bit hard to imagine these multibillion-dollar financial institutions needing to borrow money to tide them over for a bit, but it happens every single night at the Federal Reserve. It's also a nice deal for those with balances above the reserve balance requirement to earn a bit of money with cash that would normally just be sitting there.
The Federal Reserve
The exact interest rate the banks will charge each other is a matter of negotiation between them, but the Federal Open Market Committee (FOMC) (the arm of the Federal Reserve that sets monetary policy) meets eight times a year to set a target rate. They evaluate a multitude of economic indicators including unemployment, inflation, and consumer confidence to decide the best rate to keep the country in business. The weighted average of all interest rates across these interbank loans is the effective federal funds rate.
This rate has a huge impact on the economy overall as well as your personal finances. The federal funds rate is essentially the cheapest money available to a bank and that feeds into all of the other loans they make. Banks will add a slight upcharge to the rate set by the Fed to determine what is the lowest interest that they will announce for their most creditworthy customers, also known as the prime rate. If you have a variable interest rate loan (very common with credit cards and some student loans), it's likely that the interest rate you pay is a set percentage on top of that prime rate that your lender is paying. That's why in times of low interest rates (it was set at 0% during the Great Recession), a lot of borrowers should go for fixed interest rate loans that won't increase. However, if the federal funds rate was relatively high (it went up to 20% in the early 1980's), a variable interest rate loan may be a better decision as you would be charged less interest should the rate drop without the need to refinance.
The federal funds rate also has a major impact on your investment portfolio. The stock market reacts very strongly to any changes in interest rates from the Federal Reserve, as a lower rate makes it cheaper for companies to borrow and reinvest while a higher rate may restrict capital and slow short-term growth. If you have a significant portion of your investments in equities, a small change in the federal funds rate can have a large impact on your net worth.
Whether you're leaving a job involuntarily, departing for something new, or just want to prepare for the unknown, it is smart to understand all your options regarding your 401k.
Frugal gifting often gets a bad reputation. However, this shopping method does not make you cheap — it makes you practical. Frugal gifts often avoid waste and overspending and can be just as meaningful (if not more so) as any other present.
With the National Retail Federation predicting each consumer this holiday season to spend upwards of $1,000 on holiday gifts amidst an economic recession —this year might be the perfect time to reconsider your spending budget. We've formulated the ultimate list of frugal gift-giving ideas to get you started.