Even if you have a great health insurance plan, you may be faced with large unexpected medical bills that can significantly impact your finances and may lead to medical debt. High deductible plans, the rising cost of care, and high-cost treatments for conditions ranging from cancer to COVID-19 can put almost anyone at risk for medical bills that put strain on their budget. In fact, about a third of adults in the U.S. are carrying some medical debt, with 28 percent of those with debt owing $10,000 or more, according to one report.
The stress caused by large medical bills can also negatively affect your health and increase your risk for a range of physical and mental health issues, including heart disease, depression, anxiety, diabetes, and migraines.
The key to avoiding unexpected large medical bills whenever possible is to learn as much as you can about how your health insurance works and the costs of care. If your employer offers them, you should also explore the benefits of a medical flexible spending account or a health reimbursement arrangement account if you have a high deductible plan.
These tips can help you avoid falling prey to the five most common mistakes that can lead to large medical bills.
1. You’re not clear about what your health plan does and does not cover. Not fully understanding your health insurance plan can lead to higher than expected bills. For example, although the Affordable Care Act requires that health plans provide coverage for many preventive care services at no cost to the patient, that care still has to be delivered by a provider in your plan’s network to be covered at no cost to you. The use of newer technology for covered preventive and screening services, such as 3-D mammography, can also mean higher out-of-pocket costs with some plans.
To avoid this mistake, carefully review what your health plan covers. Find out what types of care require a copay or that you meet your deductible before the plan pays for care. Check whether preauthorization or a referral are needed for certain services or specialist visits. Before receiving care, talk with your healthcare provider and get the billing code for the care you need. Then check with your insurer to find out if the services are covered and what you may owe out of pocket.
2. You use out-of-network providers. Even if you’re careful to check that the primary care physician or specialist you see is part of your health plan’s network, there are still situations where part of your care may be out-of-network. Before getting blood or imaging tests, check to make sure the lab or facility is part of your insurance network. If you’re referred to a specialist, don’t assume that because the referring doctor is in your network that the specialist is too, even if their offices are in the same healthcare facility.
Of course, there are times when you may prefer to go outside your network even though costs will be higher. For example, if you’re diagnosed with a rare or complex condition, you may prefer to seek care from doctors with more experience and expertise treating your condition.
3. You don’t compare care costs. The cost of care can vary significantly from provider to provider. In fact, one study found that an uncomplicated appendectomy performed at one hospital in California cost $1,529 while the same surgery cost $182,955 at another nearby hospital. Research what different providers in your area charge for the service you need using a price comparison tool like FAIR Health or Healthcare Bluebook.
4. You don’t check your bills for errors. By some estimates, about 80 percent of medical bills contain errors that increase what you owe. Common errors include upcoding (using the billing code for a more expensive service), charges for canceled or refused care, duplicate charges, and incorrect balance billing for covered, in-network care.
To protect yourself, review every bill in detail. If you find a mistake, work with the provider to get it corrected. For complicated or large bills, consider working with a medical billing advocate. For a fee, an advocate will review your bills for errors, work to get them corrected, help set up a payment plan, and, in some cases, negotiate a lower balance due.
5. You spend more than you need to on medications. Medications, including cancer biologics and immunotherapies and hepatitis C treatments, can cost thousands of dollars. If your doctor prescribes an especially costly medication, find out if your health plan includes a specialty pharmacy benefit.
These pharmacies can lower your costs by ensuring you receive medications like infusions in the most appropriate, cost-effective, and safe setting (doctor’s office versus hospital, for example). They also help ensure that the prescribed medications are the most appropriate choice, not simply the newest, and frequently more expensive, drug on the market.
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