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Save 50% on Your Medical Bills

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Save 50% on Your Medical Bills

image via wikipedia

Get a quote from eHealthInsurance to see how much healthcare would cost.

This might sound too good to be true, but you can save 50-60% on your medical bills with minimal effort.

A few months ago, we received a $21.20 bill from the hospital for Bilirubin testing (jaundice test for baby RB40.) If I wasn’t so cheap frugal, I would have sent them a check without thinking about it. It’s only 20 bucks right?

Instead, I ignored the bill for a while and figured that they’ll bill insurance. No luck though, the bill came again last month. I called the hospital to see why they were billing us instead of the insurance and they said they didn’t have the insurance information.

Tip #1 – if you have insurance. Make sure every lab/doctor office/ nurse station has that information.

I gave them our insurance information and the lab proceeded to bill the insurance company. This year, I picked a Consumer Driven Health Plan (CDHP) and we just ran out of HRA (company contribution) money recently.  Fortunately, I still have some HSA money left. This is pre-tax money contributed to a Health Saving Account by the employee. Sorry about the alphabet soup, let’s get on with the post here. Long story short – we’re suppose to pay this $21.20 bill out of pocket.

All is not lost though, we received a $6.82 discount on the bill by going through insurance. This is due to the insurance’s arrangement with the provider.

At this point, my old non-frugal self would have been happy to pay $14.38 and send a check off. However, the new frugal retirebyforty called the hospital and asked for an incentive discount. As you know, our health care system is in a lot of trouble and the hospital has very high uncollected bill rate. They lost $34 billion on unpaid bills in 2007. They will gladly give you a 5 to 10% discount just by asking over the phone.

Tip #2 – ask for an incentive discount.

After the phone call, the bill received a further 10% discount to $12.94.

Lastly, I used the pre-tax money in the HSA to pay the bill. This is another 28% discount for me. It’s a bit tricky to calculate, but if I use post-tax money instead I would have paid an equivalent of ???. Suffice to say my algebra is a bit rusty and it’s a bit too late for me to bust out the text book. I’ll just take $12.94 * 28% discount = $9.32.

Tip #3 – use HSA or FSA to pay the bill if possible.

Closing: I paid an equivalent of $9.32 on a bill of $21.20 for a total of 56% discount! This works for bigger bills too as long as you have some money left in HSA or FSA.

What do you think? Do you ask for a discount from the hospital? From what I read, there is an even bigger incentive discount if you don’t have insurance and offer to pay the whole bill right away.

related post: Reducing Healthcare Cost by Providing Better Care.

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{ 30 comments… add one }

  • 20'sFinances September 7, 2011, 5:28 am

    It’s always amazing how much health care providers are willing to negotiate when insurance companies get involved. Great determination!

    • retirebyforty September 7, 2011, 1:04 pm

      I think most insurances get around 30% discount off the top. If you don’t have health insurance, you can try to negotiate this discount too. The hospital would rather collect some money rather than sending the bill to collection. (From what I read.)

  • youngandthrifty September 7, 2011, 8:00 am

    Or you could move up here! It’s free! 🙂

    Great negotiating example.

    • retirebyforty September 7, 2011, 1:05 pm

      Maybe if I can find a job in Vancouver. 😀

  • SB @ One Cent At A Time September 7, 2011, 10:19 am

    I always follow tip 1 and 3, I do have employer sponsored HSA. tip#2 is totally an eye opener. thanks for the tip

    • retirebyforty September 7, 2011, 1:05 pm

      Don’t forget to ask for incentive discount. They won’t tell you if you don’t ask.

  • Jeff @ Sustainable life blog September 7, 2011, 12:53 pm

    Great work RB40 – I havent had to deal much with the medical things, and usually I just see the doctor, but next time i’m in a hospital I’ll give this a try.

    • retirebyforty September 7, 2011, 1:06 pm

      You’ll deal with it more as you get older. 🙂
      New logo? I like it!

  • Nancy Wurtzel September 7, 2011, 1:04 pm

    You know, if you don’t ask, you don’t get! Good ideas in this post — thanks for sharing! I’m a new frugalista so love this type of thing!

  • Financial Success for Young Adults September 7, 2011, 3:00 pm

    Simply asking for a discount is one of the best ways to save money. I always make it a point to find out about deals and just ask.

  • Miss T @ Prairie EcoThrifter September 7, 2011, 4:36 pm

    I must say being in Canada I am fortunate to not have to worry about this. I do pay hefty income taxes to make up for it though. Glad you were able to work a deal for yourself.

  • Hunter @ Financially Consumed September 7, 2011, 5:36 pm

    It’s a simple concept, asking for a better price. It definitely pays to question every bill that comes your way.

  • krantcents September 7, 2011, 5:44 pm

    Hospitals are notorious for these things. Asking for the discount is a standard in every case. I ask for discounts on everything from subscriptions to cable or rethink its value.

  • Invest It Wisely September 7, 2011, 8:23 pm

    I live in Canada and unfortunately I don’t think the government will listen to me if I ask for a discount on my taxes…. 😛

    We do have an important role for private insurance, too, and the same tips probably still apply there as well!

    P.S. Don’t the skywalks look kind of funny on that building? Or is it just me…

    • retirebyforty September 7, 2011, 9:53 pm

      Haha, I would like a discount on my taxes too. 🙂
      The skywalks are kind of weird on that building. It’s a pretty short building and probably doesn’t need two skywalks. It does rains about 9 months out of the year here though so the covered walk way is nice.

  • Kellen September 8, 2011, 3:56 am

    Whaaat? There’s an incentive discount?? Thanks for sharing, ’cause no one in my family knows this…

    My insurance doesn’t cover prescriptions, but I still get my prescription for 25% less since I gave the pharmacy my insurance card. And then I pay for it out of my HSA, so I get the tax “discount” too. Too bad CVS probably doesn’t give incentive discounts, haha.

    • retirebyforty September 8, 2011, 9:01 am

      Yes! Don’t just send off a check. Call them and see if they’ll give a discount. 🙂
      It took me a long time to figure this out too. In my 20s, I didn’t go to the doctor office much and just send a check when I get a bill.

  • Denise @ The Single Saver September 8, 2011, 5:57 am

    These are excellent tips. I didn’t even think about an incentive discount. It is always worth a shot to ask for these types of discounts.

  • MoneyforCollegePro September 8, 2011, 11:05 am

    I honestly have been fortunate enough to not have to deal with the hospitals very often. However, I have never even thought of negotiating with them. I typically fight with my insurance company instead. But this makes perfect sense, and is something I plan to start doing right away! Well, hopefully I dont end up in the hospital soon, but as soon as I need to…

  • Lindy Mint September 8, 2011, 12:41 pm

    Hmm. Incentive discount, I’ll have to remember that one. I most likely would have paid the $21 bill, because that sounds like a lot of phone calls to make. 🙂 I’m going to avoid the hospital like the plague since our ER insurance copay just jumped up to $300.

    • retirebyforty September 9, 2011, 12:07 am

      I had another bill that was $155 around the same period and it worked there too.
      I’ll try my best to avoid the ER too. 🙂

  • Jesse @ BP September 11, 2011, 9:31 am

    we’ve experienced the same type of deal. The medical industry is cash poor and more often than you think, they don’t get paid on time or at all. Getting cash now is a big plus for them and they will take a discounted amount in most cases.

    • retirebyforty September 12, 2011, 9:57 am

      That’s how it seems to me. They’d rather give a discount and receive some payment than sending the bill to collection. I wonder how much they get back from collection, probably less than 30%.

  • Little House September 11, 2011, 11:09 am

    Way to go on cutting that bill down! I’m so impressed.

  • BarbaraLH September 11, 2011, 1:41 pm

    Recently I did a similar transaction except it was for much more money. I am over 60 yo, self-employed, and buy my insurance via a small business consortium. I pay just under $3000 for a policy with a $5600 deductible. I had to have a series of specialized blood tests and the lab charged me $640! I have not gotten (and hopefully won’t get)close to my deductible this year. My discounted insurance company rate brought the bill down to $373. I called and asked the lab for a discount for my out-of-pocket expenses — since I am not just paying a small copay — and they deducted an additional 10% if I paid in full. This brought the bill down to $335. I paid using a rewards point credit card (which also means 2% off, a payback of $6.70)– I pay the credit card balance in full every month.
    Certainly not cheap…but so much better — by approx. $310 — than the original charge.

    • retirebyforty September 12, 2011, 10:00 am

      Thanks for sharing your experience. Can you use FSA or HSA with your plan? That will bring the cost down even further. I did the same with a $200 bill and it worked just as well.

      • BarbaraLH September 12, 2011, 10:31 am

        Yes, I can use my HSA. I forgot to mention that!

  • Jerry September 11, 2011, 2:26 pm

    These are great tips for lowering your payments even if you have health insurance. If everyone did this it would lead to a lot more money in our wallets.

  • Barb Friedberg September 11, 2011, 9:05 pm

    Way to go!! Good job negotiating. And, good advice.

  • Eric September 12, 2011, 10:24 am

    I had a recent hospital visit and I was blown away by how they took payment and insurance information. They wheeled a cart into my room while I was sick with an IV in my arm on pain killers. They took my credit card on the spot, filled in my insurance info, and had me sign all from the bed.

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