In at least one big city, a major carrier is providing 100% coverage to public employees for MRIs, CT Scans and other imaging services only when free-standing, non-hospital based facilities are used. What do you know? Independent TPAs have been helping self-funded health plans do things like this for years.
Too many people have long considered rising health care costs to be a condition we simply must live with. Fact is there are alternatives, most of which can only be implemented when the plan’s best interests are first and foremost.
Detailed Reporting Needed
In contrast to a fully insured plan or self-funding with a carrier-owned ASO, using an independent TPA enables the plan to make informed decisions based on detailed reporting – reporting that the plan owns.
There is no secret to controlling plan costs. It requires discipline and the tools to monitor individual parts of the plan, such as prescription drugs, imaging, chronic disease management and more. Analyzing expenditures such as these can yield huge savings over the course of a year, but only when your administrator is free of carrier or provider affiliations. Having checks and balances in place can make all the difference.
The U.S. healthcare system is changing as many consumers are trying to be proactive, make financially smart and healthy choices and find more ways to get a better handle on costs. Taking charge of your health and saving money on medical expenses can truly begin with knowing how to talk to your doctors and medical providers. Here are tips to maximize communication:
- Write down the top problems you are experiencing to help your doctor focus on what to treat first.
- Bring a list of all current prescription medications as well as over-the-counter medications, vitamins or supplements and include dosage and how often you take them.
- Keep a handy record of recent test results, lab reports, surgeries and other relevant health information.
Costs should also be a part of every conversation and patients should be not be afraid to bring up the subject. While doctors are typically not afraid to discuss costs, they simply may not know exact costs or projected out-of-pocket expenses.
Another area of concern is the rising cost of prescription medications. If your doctor does not bring up a generic alternative, then you should. Here are ways to save on prescriptions:
- Skip chain drugstores and consider shopping at a warehouse store for lower prices.
- Go local to your neighborhood pharmacist and ask them to beat a competitor’s price.
- Know that some chain and big-box stores offer common generics at low prices for people who pay out-of-pocket and not with their insurance.
- Ask your pharmacist if any discounts, programs, cards or coupons could make your price lower.
- For long-term drugs, consider buying a three-month supply so you pay one co-pay rather than three.
Remember that walk-in clinics are suitable for common procedures like flu shots, sports physicals and minor injuries and they are always more cost efficient than emergency rooms. Staying healthy is still the optimal way to save money on healthcare, so take time for your own health. Know your blood pressure, pulse, cholesterol and family medical history and always make efforts to control weight.
While President Donald Trump has talked about several remedies for healthcare, one he mentions often is expanding the use of Health Savings Accounts (HSAs) – consumer directed accounts that are typically paired with high deductible health plans (HDHPs). Like flexible spending accounts (FSAs), they offer a convenient way to pay for out-of-pocket costs like doctor visit co-pays and other qualified medical expenses.
No Use It or Lose It Rule
One big advantage HSAs offer is that account balances are not subject to the Use It or Lose It rule that applies to FSAs – surplus funds can roll over from year to year. The IRS maximum annual contribution in 2017 is $3,400 for individuals and $6,750 for those with family coverage under a HDHP. Individuals age 55 and older can contribute an extra $1,000. HSAs can be used to pay for qualified medical expenses, while surplus funds can grow and be used in the future. Employer contributions, where available, can go a long way in meeting future qualified medical expenses. According to the 2016 Devenir HSA Market Survey, nearly a third of all funds contributed to HSAs in 2015 came from employers, with the average employer contribution being approximately $850.
A Triple Tax Advantage
A HDHP with an HSA can make it easy to set aside pre-tax dollars through payroll deductions. Individuals can also fund an HSA with after-tax dollars, which can be taken as a tax deduction on their personal tax return. Finally, all contributions accumulate tax free and can be withdrawn tax free to pay for future qualified medical expenses, including in retirement. No federal tax is due on funds contributed to a Health Savings Account, and many states follow the federal tax law.
Looking ahead, we know that healthcare costs will continue to rise and the need to engage employees will grow. Regardless of actions taken by the new administration, we believe HSAs are a great way to help employees save for future medical expenses and better understand the importance of cost and quality in the process.
While all treatment costs have risen consistently in the past 2 decades, the pharmaceutical sector has put up some amazing numbers. In 2011 alone, Americans spent an average of $985 per person, approximately twice the amount spent in other developed countries for the same benefit. In 2015, aggregate prescription drug sales in the U.S. totaled $374 billion – $190 billion more than other industrialized countries would have spent for a similar population.