1
Understand and Analyze Coverage and Spending
Options
The best place to begin the search
carried by the insurance company.
for health insurance is to select
coverage catered to needs of
the individual or family. Before
buying insurance, every individual
or family should realistically
assess their current health and
potential future medical needs.
For example, in the case of a
very healthy individual/family
with minimal health concerns,
a higher deductible plan with a
lower monthly premium price
might make good financial sense.
The risk this choice assumes is
a greater financial responsibility
in the case of a serious illness
or injury. However, if they stay
healthy and well, the lower
monthly costs would save a great
deal of money.
On the other hand, for an
individual/family with serious
health concerns or risks, paying
a higher monthly premium with
a much lower deductible might
make good financial sense. In the
case of a serious illness or injury,
much more of the cost would be
Therefore, before purchasing
any plan, each individual/family
should carefully consider the
financial balance of monthly
premiums and cost sharing.
Once the plan has been selected,
discuss the possibilities of a
Health Savings Account (HSA).
This type of account is based on
pre-tax savings, potentially saving
hundreds in taxes. Applicants
should speak with their employer
or insurance representative about
this option.
As with plan selection, a serious
and realistic view of health
finances is vital. Estimating totals
for co-pays, prescriptions, glasses,
and other health costs, will help
each user optimize their FSA/
HSA.
5 Strategies
for
By carefully
choosing a plan that
fits the needs of the members,
consumers can save significantly
Optimizing
Your Health
and feel much more in control of
their health care spending.
Insurance Spending
1
Executive Summary
Health Insurance can be very expensive. However, there are
Understand
Analyze
Coverage
and included
Spending
a number and
of options
and services
that are typically
Options
in health insurance coverage that many people do not use.
Using the plan
wisely involves
a combination
of utilizing all
the services
available, taking
advantage of
discounts and
incentives, and
knowing where
money can be
saved.
Understanding benefits can leave consumers healthier and
happier about their investment in insurance coverage.
It is a common misconception that a health insurance plan is only
useful when one is sick. However, it is a health plan, and the best
way to optimize it is to utilize the products and services offered to
maintain health.
Using the plan wisely involves a combination of utilizing all the
services available, taking advantage of discounts and incentives,
and knowing where money can be saved.
In this paper, five strategies are presented to help consumers
take full advantage of their health insurance plans and save
money where possible. These strategies include selecting a plan
that gives each individual the coverage they need but not more
coverage than they will use. This includes services like preventive
care and wellness discounts, controlling medication costs, and
knowing where to get quality but cost-effective care in the event
of injury or illness.
Services differ across plans. Each consumer should be
sure to research their specific plan, to know what options
and incentives are available.
The 5 strategies for optimizing health insurance are...
1
1. Understand and Analyze
Coverage and Spending Options
The best place to begin the search
for health insurance is to select
coverage catered to needs of
the individual or family. Before
buying insurance, every individual
or family should realistically
assess their current health and
potential future medical needs.
much more of the cost would be
carried by the insurance company.
For example, in the case of a
very healthy individual/family
with minimal health concerns,
a higher deductible plan with a
lower monthly premium price
might make good financial sense.
The risk this choice assumes is
a greater financial responsibility
in the case of a serious illness
or injury. However, if they stay
healthy and well, the lower
monthly costs would save a great
deal of money.
Once the plan has been selected,
discuss the possibilities of a
Health Savings Account (HSA).
This type of account is based on
pre-tax savings, potentially saving
hundreds in taxes. Applicants
should speak with their employer
or insurance representative about
this option.
On the other hand, for an
individual/family with serious
health concerns or risks, paying
a higher monthly premium with
a much lower deductible might
make good financial sense. In the
case of a serious illness or injury,
Therefore, before purchasing
any plan, each individual/family
should carefully consider the
financial balance of monthly
premiums and cost sharing.
As with plan selection, a serious
and realistic view of health
finances is vital. Estimating totals
for co-pays, prescriptions, glasses,
and other health costs, will help
each user optimize their FSA/
HSA.
By carefully choosing a plan that
fits the needs of the members,
consumers can save significantly
and feel much more in control of
their health care spending.
2
2. Utilize Preventive Care
As the name suggests, preventive
care aims to prevent illness.
Insurance companies are eager to
help you stay well.
There are typically extensive
preventive care services offered
under each plan. Often, these
services are 100% covered.
One of the best ways to control
your costs is also to stay healthy,
so take full advantage of these
screenings and services. These
services help maintain health,
prevent disease and identify health
concerns early so they are much
more treatable. Plus, using the
preventive services offered will not
raise your rates – some companies
even offer incentives for taking
advantage of preventive services.
Examples of covered preventive
care include (for children):
Well child visits, childhood
immunizations, screenings for
common diseases and health risks
such as oral health and vision. For
adults, the annual physical, female
gynecological exams, screenings
for STDs, obesity, and certain types
of cancer like breast and colon
cancers. The costs of these services
are often covered, but are also
dependent on the age and risks of
the patient. Each person should
speak with their doctor and health
insurance company for details.
The Primary Care Provider
(PCP) or Pediatrician can best
recommend the timing of
screenings and immunizations.
They can also monitor any
concerns or familial health issues
that need consistent review.
The rules regarding Preventive
Care can be confusing, especially as
coverage might change depending
on the age of the patient or any
children. Each health insurance
company will best answer what
is provided free of charge for
each plan, and what services
might involve cost-sharing. For
example, often an annual physical
is 100% covered, while the costs
of extensive blood work could be
shared between the patient and the
insurance company.
3
3. Take Full Advantage of Wellness Benefits
Not only do health insurance
companies offer Preventive
care benefits, but often wellness
benefits are also included, as well.
social media sites, and online
resources such as communities
and classes, to keep current with
ways to enhance wellness.
To get the most out of a health
insurance plan, know what
services and discounts to
promote wellness are included
in the selected plan.
Depending on the coverage,
health insurance plans may also
offer promotional items such as
pedometers to encourage healthy
behavior.
Wellness benefits typically include
assistance with smoking cessation
and weight loss, such as access to
support coaches and discounts on
gym memberships. In addition,
wellness resources like digital
support communities, wellness
coaches to help guide a plan, and
discounts to holistic services and
stores. Sometimes even incentives
for achieving or maintaining
excellent health are available.
Not only should members take full
advantage of the wellness options
offered through their plan.
By doing so, they further reduce
their spending by maintaining
their health.
A significant aspect of wellness
is staying well informed. This
includes strategies to stay healthy
and up-to-date on health concerns
such as the flu season. Use the
health plan’s mobile websites,
4
4. Taking Action when Injury or Illness Occurs
One of the biggest expenses in
health care is Emergency Room
visits. Of course, in the case of a
life or limb threatening emergency,
call 911 or visit the Emergency
Room immediately. However, for
more minor acute care, Urgent
Care facilities are an excellent
alternative to the ER. They
can provide treatment for minor
injuries or common illnesses like
strep throat or the flu.
Urgent Care clinics often have
longer hours and more extensive
treatment options than a doctor’s
office. Their copays are almost
always lower, and their wait is
typically much shorter than the
Emergency Room. In other words,
Urgent Care is a great option for
conditions that are not emergent
but do need immediate attention.
Urgent Care also provides a range
of general care. Their services
include immunizations, physicals
and treatment of chronic conditions
like asthma. These clinics are
not a substitute for a physician’s
office when treating a long-term
condition, but they offer these
services when needed.
Do not avoid the Emergency Room
when needed, however. Delaying
treatment of a serious illness or
injury could result in greater injury,
more complicated treatment, and
a longer recovery time. These all
increase the costs of care.
Prepare before trauma occurs.
Understand when Urgent Care
might be a good alternative to the
Emergency Room. Know where
the closest in-network Emergency
Room and Urgent Care facilities
are. Staying in-network saves
money since insurance companies
negotiate reduced rates with their
networked doctors.
Go to the Emergency Room immediatly if:
•
•
•
•
•
•
Life or limb is in danger
Chest pain
Chest pressure
Difficulty breathing
Coughing/vomiting blood
Uncontrollable bleeding
• Severe trauma (badly
• Changes in vision
broken bones, serious cuts) • Weakness
• Severe head trauma
• Sudden changes in mental
• Loss of consciousness
abilities, especially
• Sudden and/or severe pain
marked confusion
• Sudden dizziness
5
5. Review Medications
and Drug Treatments Options
Of course, even after taking full
advantage of preventive and
wellness benefits, sometimes
illness and injury still happen.
To optimize the health care
investment needed to get well,
every patient should know their
treatment options.
Prescription medication can
be a significant cost, but
generic medications can be a
significant cost-saver. They
can cost up to 85% less than the
brand name.
According to the National
Association of Chain Drug
Stores, in 2008 the average
cost of a brand-name drug was
$137.90. The average cost for
a generic was $35.22. In fact,
the only significant difference
between brand-name and generic
medications is the cost.
The Food and Drug
Administration (FDA) oversees
the development of both types of
drugs. Generic drugs must meet
the same FDA requirements as
their brand-name counterparts.
A brand-name medication is a
drug that is the first of its kind.
The FDA tests and approves these
drugs after extensive research and
development. The company that
develops the new drug applies
for a patent and gives it a name.
As long as patent continues, the
chemical formula is not shared,
and generics are not available.
Once the patent expires, the
chemical formula becomes
public knowledge and generics
are developed. Sometimes, the
company that owns the namebrand drug will also develop a
generic version.
A generic drug uses the same
chemical formula for active
ingredients as its counterpart
brand-name drug. According to
the Center for Drug Evaluation
and Research, a generic drug is “a
drug product that is comparable
to brand/reference listed drug
product in dosage form, strength,
5
route of administration, quality
and performance characteristics,
and intended use.” The FDA
mandates these consistencies,
ensuring that generic drugs have
the same quality and performance
as the brand-name drug.
Testing shows only a 2-3%
variation between brand-name
and generic drug batches. This is
due to differences in the inactive
ingredients. In fact, there is often
a similar 2-3% percent variation
between different batches of the
same brand-name drugs.
Thus, there is no meaningful
distinction between two types
of drugs in terms of the quality
and effectiveness of how they
treat a condition. This has been
independently and scientifically
proven. For example, Kesselheim
(2008) demonstrated the clinical
equivalence of generic and brandname cardiovascular drugs.
Providers are also often unaware
of the final cost of medication
to their patients. If a physician
prescribes a brand-name
medication, the patient can ask if
there is a generic alternative, as
well as what the pros and cons of
taking it might be.
Further, each patient should
speak with their pharmacist.
Generic alternatives can often be
requested at the pharmacy.
Generic medications are a safe,
effective and less expensive way to
get patients the care they need.
Conclusion
In general, health care can be very expensive. Choosing
coverage with financial wisdom, understanding the
benefits that come with coverage, and knowing how to get
the most efficient and cost-effective coverage in the event
of illness or injury will all ensure getting maximum benefit
for the investment. RMHP.org