Health care costs have become a top concern for many Americans. These expenses reflect factors such as an aging population, increased healthcare prices, and an increasing need for innovative medicines, procedures and technologies.
There are ways to cut costs without compromising quality, one being planning ahead. By understanding how much health care will cost this year, you can select a plan that meets your needs.
In-network vs. out-of-network
Hospitals, doctors, dentists, specialists and pharmacies that participate in an insurance network offer discounted medical services that help save you money on premiums, out-of-pocket expenses and deductibles. This arrangement helps ensure you can take full advantage of it!
Out-of-network health care providers do not have an agreement with your insurance company and thus you must cover the full price for services rendered – adding up to an unexpected sum for yourself.
High-deductible health plans (HDHPs)
High-deductible health plans (HDHPs) provide health insurance with higher deductibles than traditional plans, making them suitable for individuals who generally remain healthy without needing expensive procedures or treatments. HDHPs may be beneficial to people looking for insurance that won’t exceed their monthly budget, such as people looking for cheaper premiums on more simple plans.
A deductible is the annual payment you must make in advance before your insurance coverage kicks in, usually paying 100% of eligible expenses once this threshold has been reached.
Health savings accounts (HSAs)
Health savings accounts (HSAs) can help you save on both taxes and medical costs by providing more options than FSAs do.
An HSA is a tax-exempt account designed to work alongside high-deductible health plans. You make contributions pretax, then use those funds for qualified out-of-pocket expenses such as deductibles, copays and coinsurance payments.
Unused funds roll over each year and may accrue interest or investments like a 401(k). After age 65, any money left unutilized for non-healthcare expenses can be withdrawn without penalty.
Health maintenance organizations (HMOs)
Health maintenance organizations (HMOs) specialize in overall wellness and preventive healthcare for their members, offering primary care physicians as primary physicians while also connecting patients to specialists within their network as needed.
Healthcare co-ops also promote a more tailored approach, where members collaborate with their primary care provider and other members to craft an individual treatment plan tailored specifically to them.
HMOs tend to be less costly than other forms of insurance plans, yet can still be quite restrictive in what care they cover – for instance, out-of-network care will usually not be covered unless an exception has been granted by the plan itself.
Preferred provider organizations (PPOs)
Preferred Provider Organizations (PPOs) are managed care health plans that work directly with doctors and hospitals to provide healthcare services for group plan participants. PPOs tend to charge higher premiums than other insurance plans but offer greater provider choice and greater flexibility.
PPOs negotiate fees and schedules with healthcare professionals and facilities based on reasonable and customary charges, in order to reduce health care costs. These discounts aim to bring down health care costs.
Specialty plans
Specialty plans are a type of health insurance plan that cover medically necessary services such as physical therapy, acupuncture and chiropractic visits.
Costs associated with healthcare services depend on your healthcare provider, plan and copay/coinsurance rates; to learn what these costs are you can access your Summary of Coverage document.
Most health plans offer different drug tiers based on the formulary or drug list for their plan, with higher-tier medications incurring greater out-of-pocket expenses.
