personal-finance

How to save big bucks on health expenses

Dec. 5, 2011 at 10:15 AM ET

It's that time of year. No, not the holidays. It's open-enrollment season, the time of year when most workers update their health insurance plans.

A recent study by The Kaiser Family Foundation found that annual premiums for employer-sponsored health insurance plans jumped by 9 percent from 2010 to 2011 to $4,129 for families and $921 for individuals.

Here are some tips to help you keep costs down:

Earn a tax break 

If you are considering any big-ticket, out-of-pocket elective operations or medical procedures (such as LASIK surgery), you may want to do it before the end of the year in order to qualify for the medical tax deduction. Basically, if your out-of-pocket health and medical and dental related expenses (including insurance premiums) add up to more than 7.5 percent of your adjusted gross income, you may qualify for a tax deduction in the amount you spent above that 7.5 percent.

Visit an in-store retail clinic

Pharmacies and grocery stores – from CVS to Target to Walmart – are increasingly offering clinics to treat customers with minor ailments such as earaches and sinus infections. Many also offer flu shots, some common vaccinations and allergy care. The savings can be significant. A walk-in appointment at retail clinic runs anywhere from $25 to $100 for treating minor ailments, or about 25 percent less than in a doctor's office, according to HealthPartners. (Note: only 40 percent accept insurance, so you may have to pay full price rather than just a co-pay.)  And, a new study by RAND estimates that 17 percent of all ER visits could be handled at retail clinics …saving consumers more than $4 billion a year.   

Consider opening a Health Savings Account, or HSA

If you have a high-deductible health plan (which means you pay more out-of-pocket for medical expenses in exchange for a lower monthly premium) you may be eligible to open a health savings account (HSA) to pay medical expenses. Contributions to an HSA are tax-deductible. The maximum HSA contribution this year is $3,050 for an individual and $6,150 for families. 

Check into local universities

Dentistry schools and colleges of optometry need to let their students work on patients and will often provide services you'd get a private medical office for a fraction of the price. Care is provided by pre-doctoral students or residents under the close supervision of faculty members. I used to go to the State University of New York (SUNY) school of optometry for eye exams when I was in my early 20s and money was tight. 

Keep an eye out for mistakes

You may remember just getting one X-ray, but your bill mysteriously has five line items. As many as eight out of 10 hospital bills contain errors, increasing the tab by 25 percent on average, according to the Medical Billing Advocates of America. To avoid getting overcharged, track every test and medication you get, and verify it with your medical file, which you can request from the hospital's billing department. If you see an error, send a certified letter requesting a corrected bill, and a copy of all related paperwork to your health insurance company.  

Here are more money-saving tips for health expenses.

For more from Farnoosh Torabi, visit Financially Fit.

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