Amber Eyerly, 32, says she's never been much good at saving money. But with only minimal raises, at best, expected for 2009 at the Los Angeles public relations firm where she works, Eyerly carefully studied her health insurance benefits package this year to see where she could trim costs.
She made one cut for 2009 by signing up for a medical flexible spending account, which takes money, pre-tax, from each paycheck to spend on healthcare costs and reduces her taxable income. And when she read that, unlike trips to a specialist, visits to her primary care doctor don't require her to first pay down a health insurance deductible, Eyerly arranged to have her dermatology records for a minor skin condition sent to her primary care physician, who now writes prescriptions for any dermatology medicines the young executive needs.
Eyerly's personal health cost review is being repeated across the country, as the economic downturn worsens and jobs -- and the benefits that often come with them -- get slashed. "Millions of consumers are weighing their medical costs and trying to see what expenses they can jettison to save some money," says Cathy Tripp, a senior consultant in the Minneapolis office of benefits consulting firm Watson Wyatt. A Watson survey of 2,500 U.S. employees released this month found that 17% of those surveyed had avoided a recommended doctor's visit this year to save costs (the question was not asked in the firm's 2007 survey). And 17% did not fill a prescription or skipped doses of prescribed medicine, an increase from 13% in 2007.
But healthcare leaders worry that short-term savings could lead to serious illness, and even deaths. "We're seeing that consumers are willing to take risks by not doing what they perceive to be small things, such as putting off going to the doctor and deciding not to pay for medicines," says Dana Goldman, head of health economics at research firm Rand Corp. in Santa Monica. "That puts the individual at risk, but the potential harm doesn't stop with them," Goldman says. "It also becomes a problem for society if, for example, infections spread because some people don't fill a needed antibiotic prescription, or if an increase in hospitalizations for chronic illnesses places a deeper financial burden on a hospital or city."
Says J. James Rohack, president-elect of the American Medical Assn.: "Consumers need to take steps to stay healthy, such as getting exercise and losing weight, if necessary, and finding help through private and public channels to help pay for healthcare costs."
FLEXIBLE SPENDING ACCOUNTS
Save by reducing taxable income
Surprisingly, these accounts, offered by many companies, even small ones, are often not used by consumers -- so if you didn't sign up for 2009, consider it next time around. Employees of companies that offer the accounts can have set amounts (minimums and maximums are set by each company) taken from their paychecks pretax and put into these accounts to be used for health expenses as major as brain surgery or minor as contact lens solution. (Each company can decide what it will allow in its specific plan; you can get a good idea of allowed expenses under the federal government's flexible spending program at www.fsafeds.com/fsafeds/eligibleexpenses.asp. According to Laurie Brubaker, a benefits expert with Aetna, which administers some of these accounts for businesses, setting aside $2,000 from a salary of $25,000 will create a tax savings of $450. Use Aetna's calculator to match your allocation with your salary at www.aetnafsa.com/fsa/index.php.
Spend it or lose it
Many people often don't open an account because any money left at the end of the year is forfeited. Cathy Tripp, a senior consultant in the Minneapolis office of benefits consulting firm Watson Wyatt, suggests making a list of medical needs for the year, including prescription sunglasses and new contact lenses or a visit to the doctor to check on an allergy, and making those appointments before the benefit year ends. And remember: The money is deducted over the course of 12 months, but the full amount you choose to set aside is available to you from the first day of your benefit year.
Review what you take with a doctor
Shopping for lower prices isn't necessarily the first step you need to take if you want to lower your prescription drug bill, says Michael Cohen, president of the Institute for Safe Medication Practices in Horsham, Penn. First, review the drugs you take (a good practice once each year regardless, doctors say), to determine whether you still need the drug or that dose and whether you could safely substitute a less expensive option for the drug.
A visit with your doctor to review the drugs is your best bet. If you're concerned about the cost of the visit, you can ask if the doctor will go over your list by phone. (And see below for strategies to reduce the cost of an office visit.) A local pharmacist can also review your drug list and make suggestions to your physician for changes, but never stop taking a drug unless the doctor has specifically given you the OK.
Ask your pharmacist if your particular medicines can be split or if you can use two lower doses to make up the dose you need. Review the costs, including any co-pays. Those options can sometimes save money over the cost of buying the exact dose prescribed. Then . . .
Sure, the corner drugstore may be convenient, but it may also be expensive. According to the National Center for Policy Analysis in Washington, D.C., comparing prices among local pharmacies can save consumers almost 10% on brand-name drugs and up to 81% on generic drugs. You can check comparison prices in your area at www.destinationrx.com, but also call the local pharmacy to confirm. And some pharmacies may match competitors' prices. Costco's prices for brand-name drugs often rank among the lowest, and the warehouse store doesn't require a membership fee for people buying only prescription medicines.
Don't assume Internet prices are cheapest. Local pharmacy prices for a 30-day supply of the cholesterol drug Lipitor (80-milligram dose) hovered around $83 recently. The same drug cost $119.99 at drugstore.com.
Go for the generic