Healthcare costs can vary widely. That’s why researching and estimating your healthcare costs can help lower the odds of having unexpectedly high medical bills.
If you have health insurance, or you are covered by Medicare, you may assume there’s no reason to be overly concerned with estimating how much a procedure or treatment will cost in advance. But that could be an expensive and budget-busting mistake.
There are several reasons why you should estimate your healthcare costs based on facts and not guess what you’ll pay for various medical appointments and therapies.
First, you’ll avoid what are known as “surprise bills (balance billing)” — which may show you owe financially shocking amounts. In addition, you’ll also be able to get a better handle on what your healthcare costs will likely be over time.
Start by getting to know your health insurance plan better
To accurately understand what expenses you can incur, take time to check out your insurer’s information online or call your insurance provider with any questions.
In answer to growing concern for price transparency in healthcare, many insurance providers, hospitals, and other medical care facilities have cost estimates available online or even as mobile apps. While the healthcare costs listed aren’t a guarantee, and your individual health situation could affect the final cost, these estimates can be key to help you make informed financial decisions about healthcare based on a realistic appraisal of your medical costs.
For Medicare coverage. the Centers for Medicaid and Medicare Services (CMS) provides an online tool that displays cost differences for a variety of surgical procedures (minus physician and other fees). If you have a Medicare Advantage plan, make sure you talk to your plan provider about specific costs and what is covered to help you estimate healthcare costs.
Good news for your budget as you estimate your healthcare costs: Most health insurance plans are now required to cover a set of preventive healthcare services — such as flu shots and screening tests for certain chronic health problems — at no cost to you. Find out what these benefits are and use them.
Understand your health plan’s network when estimating healthcare costs
An important reason you should estimate your healthcare costs is to avoid costly surprises. Make sure you understand and have verified what doctors, labs, hospitals, and other providers belong to your health plan’s network by checking with your provider.
In-network providers have a contractual agreement to accept the payment rate (“negotiated rate”) for their services agreed upon by an insurer, and that rate is almost always substantially lower than healthcare providers outside of the network. Some plans may pay part of out-of-network fees, but other plans, including HMOs (Health Maintenance Organizations), only pay if you are treated by in-network providers.
Here’s where it can get tricky and why it’s important to do your own research when estimating healthcare costs: Check with your health insurance provider if you are having a medical procedure, such as a knee replacement or any other surgery, to verify all the doctors involved are in your network.
This is crucial because, even if you know the medical facility and surgeon are definitely in-network, that doesn’t mean others — such as the anesthesiologist or the radiologist providing the images for the surgery — are in-network. And after your surgery, you could receive what is known as a “surprise” bill (called balance billing) with fees you have to pay if out-of-network doctors were involved in your care.
Although it may not be a common problem, in some situations — an emergency, for example — there may not be an in-network doctor or specialist available, and you could find yourself saddled with an unexpected bill. That’s another reason why you should estimate healthcare costs and include the possibility, however remote it may seem right now, an unexpected medical bill might be in your future — and putting aside some extra funds, just in case, might be a good idea.
Some states are working on protections from these “surprise” bills, and the movement toward price transparency in healthcare may help prevent these unexpected bills eventually, too.
If you decide to go out of network for some reason, estimate your healthcare costs by using online cost estimate tools, often found on hospital, medical center, and insurance provider websites, to look up the cost of charges for the procedure in your area so you can compare prices.
February 14, 2020