Why You Should Estimate Your Healthcare Costs

Healthcare costs can vary widely. That’s why researching and estimating your healthcare costs can help lower the odds of having unexpectedly high medical bills.

If you have health insurance or Medicare, you may assume there’s no reason to be overly concerned with estimating how much a procedure or treatment will cost in advance. But that could be an expensive and budget-busting mistake.

There are several reasons why you should estimate your healthcare costs based on facts and not guess what you’ll pay for various medical appointments and therapies.

First, you’ll avoid what are known as “surprise bills” (balance billing)” — which may show you owe financially shocking amounts. In addition, you’ll also be able to get a better handle on what your healthcare costs will likely be over time.

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Get to know your health insurance plan better

Make sure you understand your financial obligations for healthcare fees that go beyond your premium and even beyond your deductibles and co-payments.

To accurately understand what expenses you can incur, check out your insurer’s information online or call your insurance provider with any questions.

In answer the growing call for price transparency in healthcare, many insurance providers, hospitals, and other medical care facilities have cost estimates available online and mobile apps. While the healthcare costs listed aren’t a guarantee, and your individual health situation could affect the final cost, the estimates can help you make informed financial decisions about healthcare based on a realistic appraisal of your medical costs.

For Medicare coverage, the Centers for Medicaid and Medicare Services provides an online tool that displays cost differences for a variety of surgical procedures (minus physician and other fees). If you have a Medicare Advantage plan, make sure you talk to your plan provider about specific costs and what is covered to help you estimate healthcare costs.

Most health insurance plans are now required to cover a set of preventive healthcare services — such as flu shots and screening tests for certain chronic health problems — at no cost to you. Find out what these benefits are and use them.

Understand your health plan’s network

Estimating your healthcare costs can help you avoid costly surprises. Check with your provider to understand and verify which doctors, labs, hospitals, and other providers belong to your health plan’s network.

In-network providers have negotiated a contractual agreement with an insurer to accept the payment rate (“negotiated rate”) for their services, and that rate is almost always substantially lower than healthcare providers outside of the network. Some plans may pay part of out-of-network fees, but other plans, including HMOs (Health Maintenance Organizations), only pay if you are treated by in-network providers.

Here’s where it can get tricky and why it’s important to do research when you estimate healthcare costs: Check with your health insurance provider if you are having a medical procedure, such as a knee replacement or any other surgery, to verify all of the doctors involved are in your network.

That is crucial because, even if you know the medical facility and surgeon are definitely in-network, that doesn’t mean others — such as the anesthesiologist or the radiologist providing the images for the surgery — are in-network. After your surgery, you could receive what is known as a “surprise” bill (balance billing) with fees you have to pay if out-of-network doctors were involved in your care.

Although it may not be a common problem, in some situations — an emergency, for example —an in-network doctor or specialist may not be available, and you could find yourself saddled with an unexpected bill. That’s another reason why you should estimate healthcare costs and include the possibility, however remote it may seem right now, an unexpected medical bill might be in your future. Putting aside some extra funds, just in case, might be a good idea.

Some states are working on protections against “surprise” bills, and the movement toward price transparency in healthcare may help prevent these unexpected bills eventually.

If you decide to go out of network for some reason, estimate your healthcare costs and compare prices with online cost estimate tools, often found on hospital, medical center, and insurance provider websites, to look up the cost of charges for the procedure in your area.

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