Save Money By Being Savvy Health Care Shoppers
According to a survey of insured consumers released today by Plan for Your Health, the public education program from Aetna (NYSE: AET) and the Financial Planning Association (FPA), 45 percent of respondents were unaware that they can save money in the coming year by making smart decisions about their health benefits. In these tough economic times, millions of Americans are seeking new ways to reduce household spending, but not enough are taking simple steps like opening a Flexible Spending Account (FSA), using mail-order prescription drug services and tapping into discounts on services like gym memberships.
"For millions of Americans with tighter household budgets this year, fully understanding their options during Open Enrollment will help them make educated, potentially money-saving decisions," said Laurie Brubaker, head of Integrated Health and Productivity Solutions for Aetna. "During this once a year opportunity to make changes to their health benefits plan, consumers should take the time to review health care spending, and weigh all the available options. By spending some time focusing on health benefits and related expenses, people can make important decisions that can result in savings this year and into the future."
To help people identify opportunities to save money, Plan for Your Health developed the Be Smart About Your Benefits checklist, located at www.PlanforYourHealth.com , that details five things consumers should think about when evaluating their health benefits at Open Enrollment and throughout the year. By asking the following questions and carefully evaluating the answers, it is possible to make choices that could add up to thousands of dollars of savings:
-- Am I being FSA-savvy? Take some time to identify your upcoming expenses and determine a realistic FSA contribution. Since money in an FSA is exempt from federal, most state, and payroll taxes, you'll reduce your taxable income -- and be able to use those pre-tax dollars for health care expenses. For example, a pre-tax $2,000 FSA contribution not only gives you money to spend on qualified health care expenses, but would also result in a tax savings of more than $450 for an individual making $25,000 per year. You also might look into other savings vehicles such as Health Reimbursement Arrangements (HRAs) or Health Savings Accounts (HSAs) to see if they make sense for you and your family.
-- Does it pay to be healthy? It could! Some plans completely or partially cover annual physicals and preventive screenings, as well as offer discounts on gym memberships. Some employers even offer "wellness incentives" that can total hundreds of dollars a year for employees who exercise regularly, eat healthfully or participate in stop smoking programs, among other things. See if you can take advantage of any of these offerings -- it's a great way to save money and stay healthy, and they may be available from your employer or health plan at no charge.
-- Can my benefits help me save time? Yes! Some insurers offer coverage for online consultations, which are often more convenient than in-person visits for routine health needs. Talk to your doctor or your insurer to find out how to take advantage of online visits. By using them reasonably, you could save gas money and valuable time. Many health insurers also are offering personal health records online that help you track spending, understand what preventive care you might need, and even allow you to coordinate with your doctor's office.
-- Can pharmacy mail-order help me? It can if you take regular prescriptions and sign up for a health plan with discounts on mail-order services for routine prescriptions. With some plans, you could get a three-month supply of your drug but only pay for a two-month prescription. So, if your family spends $50 per month on prescriptions, you could save about $200 per year.
-- Should I go generic? The average brand-name prescription drug costs about $85 more than the average generic. If it's possible, switch from a brand-name to a generic and save more than $1,000 a year. "Many people think that medical expenses are beyond their control," said Tracey Baker, co-author of Navigating Your Health Benefits For Dummies, Certified Financial Planner professional and former chair of FPA's National Capital Area. "However, taking the time to make wise decisions -- both at Open Enrollment and in daily life -- can result in substantial savings."
According to the recent Plan for Your Health survey of 1,575 insured adults:
-- Only about a quarter (26 percent) of respondents indicated they are likely to make changes to their benefits during Open Enrollment.
-- 87 percent of respondents are more worried about their finances this year because of the struggling economy, but the majority (59 percent) plan to spend less than one hour, or no time at all, reviewing their health benefits options during Open Enrollment.
-- One third of respondents (33 percent) have ordered products like clothing and electronics online to save money, but only 19 percent have taken advantage of a mail-order pharmacy this year.
-- Almost all respondents (93 percent) have taken at least one step to save money on general expenses over the past year, including eating out less often (68 percent), clipping coupons (63 percent) and traveling less frequently (56 percent).