Medical expenses can balloon in size quickly. Rising premium costs and deductibles has meant that households have to either pay more out-of-pocket before reaching the annual deductible or skip insurance altogether as the tax penalty can be cheaper than the monthly premiums. One cost-saving tactic that has risen in popularity recently is the concept of self-pay patients. But, can it actually save you money the next time you visit the doctor?
Uninsured Self-Pay Patients
The only payment option for uninsured patients is self-pay. Uninsured medical costs are mixed as it varies from provider to provider. Some charge the uninsured more to offset losses incurred by Medicare and private insurance plans. Other providers offer steep discounts for the uninsured because they do not have to submit paperwork to the insurance companies which might require a “price floor” for certain procedures.
How Uninsured Self-Pay Patients Save Money
Even though one primary goal of the Affordable Care Act was to insure every American, there are still plenty of citizens without medical insurance. If you do not qualify for an “Obamacare” exemption, you have to pay a fee based on your annual income when you file your federal taxes.
One Obamacare alternative that can help uninsured patients is joining a health-sharing ministry. By joining a ministry created before 1999, you can get the benefits of “insurance” for a fraction of the cost of a monthly insurance premium.
The reason health-sharing ministry plans are so much cheaper is that the individual members are expected to negotiate the lowest rate and compare prices. For example, it can be cheaper to see an urgent care clinic for a simple procedure than driving to the hospital. Having more “skin in the game” for being responsible for the cost of treatment provides more incentive for the uninsured to compare prices on non-emergency medical care.
Insured Self-Pay Patients
An increasing number of insured patients are also beginning to pursue self-payment. This is because some doctors and clinics will offer lower rates for self-pay patients. Tax-exempt hospitals are prohibited by law from charging much more than Medicare rates for uninsured patients. By asking for the cash rate first, you might be able to get a lower rate.
For simple, one-time procedures like X-Rays, medical providers are also happy to give cash discounts you pay the bill before leaving or prepay for a “Stork package” like having a baby.
One downside to paying with cash is that the expenses cannot be applied to your annual deductible. If you expect steep medical expenses for the calendar year, it can be cheaper to use your insurance. Even though you will be paying more per procedure initially, the cost-savings will begin to save you money once you reach your annual deductible.
Here are a few other ways you can save money on medical expenses when you use medical insurance.
Vision and Dental Expenses
It can also be possible to save money as a self-pay patient for vision and dental expenses. One reason is if you rarely get an eye exam or dental cleaning, it is cheaper to pay for the individual exams instead of paying the monthly premium. You can also ask your dentist if there is a price difference for advanced dental procedures like cavities or root canals if you pay with cash instead of submitting the bill to insurance.
You might also choose to do self-pay if you do not like the list of vision or dental providers that accept your current insurance. This might not save you money, but, being satisfied with your health can be more rewarding.
How to Save Money as a Self-Pay Patient
There are a couple ways to save money as a self-pay patient.
1. Ask the Doctor and Front Desk to Self-Pay
By asking the front desk and doctor for a self-pay discount, it is possible to reduce your treatment costs by at least 40%. This is largely because doctors and the medical billing department use a Current Procedural Terminology (CPT) code based on 1 to 5 rating system. The higher the number the more complex and expensive the procedure. By stating upfront that you are a cash customer, they will be more likely to use a lower code which translates into a discount for you.
To save some additional money, ask your current medical providers if they offer self-pay discounts. This can save you money on the one-time new patient costs nearly every medical office charges to first-time visitors.
2. Ask for an Itemized Bill
For each visit, ask for an itemized bill. This is an easy way to compare the quoted price to the actual price of the procedure. Itemized bills also allow you to see if discounts and payments have been applied as well.
3. Ask for a Copy of your Medical Chart
You are legally allowed to get a copy of your medical chart. This can be a good way to compare the itemized bill to the services performed to find any potential “overcharges.” It also makes it easier to know why you might be receiving certain bills if you are uncertain what procedures were administered or do not remember much about the incident (i.e. emergency situations).
Reviewing your medical chart can be a good way to review your information for typos and other clerical errors. This can even save you money when you file an insurance claim, as the insurance provider might decline a claim due to reporting errors and make you responsible for paying the additional expenses.
4. Negotiate a Payment Plan
For expensive visits and procedures, particularly those that cost more than $1,000, ask the billing department for a payment plan. Some hospitals have designated funds to help financially distressed families and will pay a portion of the bill. Also, the payment plans mean you don’t have to make a lump-sum payment and potentially borrow money and go into debt.
5. Be Nice
Lastly, be nice. Medical billing is never fun and being courteous and professional can help you tremendously as you negotiate bill payments and potentially for future discounts in follow-up visits.
While becoming a self-pay patient doesn’t guarantee that you will save money every time you visit the doctor, it generally cannot hurt. For expensive surgeries and recurring conditions, it can be cheaper to use medical insurance because the insurance provider will pay most of the bill once you reach your out-of-pocket deductible. For one-time procedures, it can be cheaper to self-pay, even it you have a “good” insurance plan.