You probably think that using your health insurance when you go to the doctor is the cheapest way to pay. After all, don’t insurers spend a lot of time negotiating the best rates with hospitals and healthcare providers? But in many cases, paying cash on medical services is actually more affordable.
Doctors usually charge patients who don’t go through insurance lower rates because it reduces their administrative and billing costs. One patient, for example, saved 30% on a visit to the dermatologist just by pre-paying in cash. If you want to start saving money too, here’s everything you need to know about paying cash on medical services.
Things to Consider Before Paying Cash on Medical Services
Cash Doesn’t Count Toward Your Deductible
Most insurance companies don’t allow cash payments to count toward your deductible. Although you can submit the bill to your insurer and ask if they’ll consider adding it to your deductible, it’s unlikely they’ll say yes.
This may not be a big deal to you depending on your health situation. If you don’t think you’ll meet your deductible during the current year, it may still make sense to pay in cash. But on the other hand, if you have health problems, it could be better to pay the higher rate through your insurance so the money you spend counts toward your deductible.
Even if you’re young and healthy, remember that it’s possible for unexpected medical problems to pop up. So if you start paying cash instead of going through your insurance, make sure you have enough money in your emergency fund to meet your out-of-pocket maximum. That way you won’t go into debt if you need an expensive procedure you didn’t anticipate.
Another thing you should do before paying cash on medical services is compare prices. You shouldn’t assume that you’ll come out ahead by paying in cash. Depending on your insurance plan, provider, and the type of services you’re getting, it may be cheaper to go through your insurance.
Websites like Healthcare Bluebook and ClearHealthCosts publish insurance-negotiated rates and cash prices offered by providers in your area so you can figure out the best way to pay. If you don’t see your provider or insurer listed there, call them directly to get price information.
Talk to Your Pharmacist
A recent study showed that it’s cheaper to pay cash for prescriptions about 23% of the time. Copays for medications can be higher than the actual out-of-pocket cost, so sometimes it’s better to use cash than insurance.
You can find out if you’re overpaying for your prescriptions by asking your local pharmacist if there’s a better price available. You can also use apps like GoodRx and Blink Health to see if there are discounts that would make your medication cheaper.
Paying cash doesn’t make sense for everyone since the money you spend doesn’t usually count toward your deductible. But it can be a good way to save on medical services if you don’t think you’re going to meet your deductible this year.
Do you pay cash for medical services? Why or why not? Let us know in the comments section below.
If you enjoy reading our blog posts and would like to try your hand at blogging, we have good news for you; you can do exactly that on Saving Advice. Just click here to get started.
Check out these helpful tools to help you save more. For investing advice, visit The Motley Fool.