Have you noticed ridiculously high increases in the price of your health care? If you have private health insurance, whether through your employer or a policy you bought directly, the answer is probably yes. A study by the Kaiser Family Foundation has found that the cost of health care in the US is much higher and has grown much more rapidly in the past two decades for people with private insurance than for those on Medicare or Medicaid. Even if your insurance starts to cover much of the cost each year at some point, the deductibles that have to be paid first are skyrocketing and can be crushing. And health-care costs are significantly outpacing the inflation rate—meaning that many Americans who have been able to pay for medical care in the past are, simply put, on a collision course with not being able to afford the care they need.
This trend will be catastrophic for many if it continues, but if you’re privately insured, some of the results of the Kaiser study could help you budget and manage your medical costs in ways that minimize financial harm…or help you understand what you stand to save when it’s time to enroll in Medicare. Study findings that could help you…
Inpatient hospital care costs have soared the most. The increase in health-care costs has been particularly steep for patients with private insurance who require inpatient hospital care. Those costs spiked a full 13% between 2014 and the first quarter of 2018, according to the study, compared with an increase of just 3% for inpatient care received by patients on Medicaid and Medicare. For perspective, overall inflation totaled about 6% during the same period—more than half of the increased cost of inpatient care for the privately insured. As measured in 2015, hospital inpatient prices were 68% higher for private patients than for Medicare patients.
Price increases have been especially sharp for some procedures. The average cost under private insurance of an inpatient laparoscopic appendectomy jumped 136% from 2003 to 2016, reaching an average of more than $20,000, with some topping $35,000.
What to do: Keep this in mind when deciding when to switch from private insurance to Medicare.
Prices of procedures vary widely by market. Where you receive care has a huge impact on what you can expect to pay. For example, the average price of a full knee replacement in the New York City area was $50,000 in 2016. Around Louisville, Kentucky, the same procedure would run you $23,000—less than half. The national average was $34,063. And the average price increase between 2003 and 2016 was a lofty 74%, compared with the overall inflation rate of 28%.
What to do: If you are relocating, be sure to ask about and factor in the cost of medical care in your area. And for some people, it might even make sense to move because you want to be in an area with lower medical costs—the difference to your overall finances can be that significant.
Even office visits skyrocketed in price. The average price of a common office visit rose 69% from 2003 to 2016, from $60 to $101 (and in some parts of the country, office visits topped $150).
What to do: When choosing doctors, especially those you expect to see frequently for follow-up care, ask about charges for simple office visits, and make that information one of the factors you consider. This is something that very few people do but that could save you a lot of money.
And remember: Mistakes in medical billing are rampant. So always examine your medical bills carefully to spot costly mistakes.