"The World's Best Consumer Tips"
A CFA Special Report

Part VI:  Your Medical Cost-Reduction Toolkit

Here's an entire page of the best tips we could find to help you save big on health care! , even if you're in great health now you'll want to skim through it.  You'll see some fine ideas showing how a little preventive self-care you can safeguard your health and save you money.

Get Health Care At Low Or No Cost

1.  Government programs include Medicare for the elderly and disabled and VA clinics for veterans.  The federal government also helps the states administer programs such as Medicaid for the poor, and the free Insure Kids Now (also called "SCHIP") program for many low-to-moderate income families.

2.   Most city and county governments offer low-cost physicals, immunizations and tests, oftentimes to people of all income levels.  Call some local health clinics and ask where the least expensive care is available. Online you can go to the government's Free and Low Cost Health Care page to find these health centers.

3.   Minute clinics are privately-operated clinics becoming available in more cities:  They can often cut costs up to 50% on immunizations and the treatment of minor conditions.

Question Each Medical Expense

1.   Unnecessary expenses.  Nine out of ten doctors say they practice "defensive medicine".  For example, some doctors may order unnecessary tests to avoid malpractice lawsuits.  Ask your doctor which parts of a treatment can be reduced, delayed or eliminated without significant risks.  Many hospital stays can be shortened:  oftentimes a family member can often provide sufficiently good care.  If you do stay in a hospital, check your medical bill.

2.   Doctor negotiations.  If a doctor recommends an expensive procedure, keep in mind that about 25% of second opinions recommend a less expensive option.  If the procedure is still deemed necessary, many doctors will negotiate lower prices if you communicate that you're having trouble making ends meet.

3.   Billing errors.  A 1993 study by the General Accounting Office found excessive charges in most hospital bills.  Insist on daily bills so you can discover these excesses early and prevent further charges.

Tax-Saving Ideas

Here are some ways to deduct medical and dental expenses, to lower your income tax and social security tax.

1.   About 30% - 40% of employers offer HSAs (Health Savings Accounts) to their employees.  An HSA can also be set up by any individual at most financial institutions.  It lets you deduct nearly all your medical and dental expenses on your federal income tax and on many state tax returns, so you'll save the same percentage of money as your tax bracket.  More savings comes from the fact that an HSA is always used with high-deductible health insurance, which of course costs less.  You could also save money by watching your health expenditures more closely instead of relying on insurance, but be careful not to scrimp at the expense of your health.

Your HSA will of course earn interest.  An HSA is somewhat similar to an IRA in that you can use it for retirement savings, but an HSA is better because it also lets you make withdrawals for medical expenses completely tax-free.  Like you can with an IRA, you can withdraw money for other purposes if you pay a 10% penalty and pay income tax on it.

If you're generally healthy and have few medical expenses, an HSA is probably a good idea for you.  If your health insurance is provided by your employer, switching to high-deductible insurance will save him a lot of money, so employers should be willing to contribute most of those savings to your HSA.

2.   A cafeteria plan allows an employee to choose from various benefits on a pre-tax basis.  You can opt to use this plan to pay for medical expenses, children’s day care expenses, or insurance that may cover health care, accidents, disability, vision, dental care and group term life needs.  However you must commit to the plan before the calendar year begins, and you can only alter your choice if there's a change in marital status, number of dependents, or spouse’s employment. Any money that is unused by the end of the year is kept by your employer.

3.   A FSA (Flexible Spending Arrangement) can be spent on expenses for health care, child care, summer day camps, or the care of an aging parent (but not health insurance).  It's available from many employers and cuts taxes in the same amount as an HSA.  A FSA doesn't require high-deductible insurance, but on the other hand you must use it up by the end of the year or lose what's left.  A FSA is great for those people who have high medical expenses.  It's underused by the public because it doesn't generate a big profit for benefit administration companies.

4.   If you start to incur high medical costs, remember that you can deduct medical bills exceeding 7.5% of your Adjusted Gross Income on your tax return.

Most companies are staffed with a benefits manager who can give you more information about your company's health plans.

Shop Around for Health Insurance

1.   Online insurance-search sites could help you save up to 40% by showing you the lowest-cost offers.  They carry most of the different kinds of health insurance plans that people want.

2.   High-deductible insurance can save 20-50% over five years for relatively healthy people.  This type of insurance kicks in only for high medical expenses.

3.   You can also save money by getting health insurance with reduced benefits for items you may not need such as mental health care, vision care, hearing care, substance abuse recovery, maternity care, and dental work.  Some plans strictly limit medications, prescription drugs and/or hospitalization:  check the fine print to see if their limits are fair.

4.   Employer or group insurance could save 10-20%, for example from the AAA, AARP, alumni and various trade associations. 

5.   Two other insurance savers are a Preferred Provider Organization (PPO) which reduces your choice of doctors, or a Health Management Organization (HMO) which reduces doctor choice and also reduces costs in two more ways.  First, HMOs place more emphasis on preventive care to reduce the chance you'll get sick.  Second, they reduce benefits that management believes is excessive (such as overly long hospital stays).  The downside:  HMOs may place limits on what doctors feel is appropriate care, and you may experience bureaucratic snafus.

6.   Shopping around could save you a lot of money by (1) helping you implement the tips just mentioned, and (2) comparing low-priced offers from health insurance companies.  Many people are pleasantly surprised by the affordability of several health insurance plans.  Of the sites recommended by the Coalition for Affordable Health Care (CAHC), eHealthInsurance seems to be quickest and broadest.  You can compare all these types of plans, get free quotes, and apply online.

With these tips, you can cut your medical costs to the bone without sacrificing your health!

Very Personal Health Tips

Some of the best things you can do to help your health are very, very personal in nature:

  Release your emotions:  both laughing and crying have been shown to be healing, and even life-changing.
  Your own deeply felt personal affirmations will always be far more motivational than anyone else's advice.  They can only come from deep inside yourself.
  Build up a good support system:  seek friends, advisors and doctors who you really like and trust.
  Conversely, avoid toxic people when possible... and "kill them with kindness" when it isn't.
  Do what you love:  take note of what inspires you and fulfills your soul... then live it every moment!  If you must work, you can stay inspired by consciously working towards what fulfills you.  That way, even if you would like to be somewhere else or be doing something else, you can still enjoy the moment.

Best wishes for your health and happiness...
...from the editors at the CFA

These last six tipsheets have been quite an intensive "crash course" in consumer wisdom.  We hope we've been of help in your quest for greater health, safety and freedom.  You'll be happy to hear that it gets a lot easier from here on out.  First we'll take a break with a review of "The World's 12 Biggest Consumer Goofs." This will help keep you safe from the worst traps faced by consumers.  Then in Part VII of this Special Report we'll talk about some easy ways you can keep growing as a happier, healthier and wiser consumer -- including how to keep getting great consumer-friendly tips.

To-Do List:
1. Consider a tax-saving HSA or FSA
2. Dump any addictive habits
3. Shop around to save on health plans
4. Take steps to ensure excellent dental hygiene

At SmartConsumerTips.com you'll find daily funny "tips", and anyone can get the blockbuster Special Report "The World's Best Consumer Tips".  It's fast, free and fun!
7 Tips To Save On Drugs
1. Compare prices. PharmacyChecker.com compares prices from many sources, including inexpensive Canadian suppliers.  Comparing local prices from different drugstores, Wal-Mart and Target can also help you save.
2. Generic drugs. Generic versions of brand names are just as effective, and much cheaper.
3. Other brands. Alternative brands are cheaper yet often quite effective (but they may be chemically different, so please consult with your doctor first.)
4. Buying in bulk. You can often save 30% to 50% by buying enough to last a few months.
5. Splitting pills. You could swallow a half-pill or three-quarters pill instead of a whole pill, you're light enough (but ask your doctor first about possible under-medication risks.)
6. Assistance programs. Both states and drug makers offer prescriptions at a reduced cost to citizens with low-to-moderate income.  You can visit NeedyMeds.com to search for these programs.
7. Medicare. For the elderly, Medicare Part D pays for a part of your costs.

The CFA recommends Consumer Reports Best Buy Drugs for those interested in more information.  You'll also find a price comparison service there, but it excludes Canadian suppliers.


Joke: The Millionaire Art Lover

An artist asked the art gallery's owner if anyone had shown interest in his paintings.

"I've got good news and bad news," said the owner. "The good news is that some guy inquired if your art would appreciate in value after you died. When I told him it would, he bought all 15 of your paintings."

"That's great, but what's the bad news?"

"That guy was your doctor!"

It's easy to forward this
joke to your friends:
  Click to email

How To Save on Dental Bills
1. Good dental habits. Everyone should brush at least twice per day and floss once.  Brushing after every meal is easiest:  you can brush much more lightly because you're not allowing plaque to build up.
2. Use a good toothbrush. A quality electric toothbrush such as the Oral-B could reduce cavities about 10%.
3. Regular checkups. Prevent minor problems from becoming major ones.  Skipping checkups would probably increase your dental expenses by 30% or more.
4. Cheaper treatment options. If your dentist recommends a porcelain filling, a much cheaper (if less permanent) solution could be a metal filling.  And if you mention that you're on a limited budget, one study shows that you can get a price break from most dentists.
5. Eat less sugar. If not that, at least swish water in your mouth afterwards, and/or brush your teeth soon after dessert.
6. Employer-paid dental insurance About half of employers pay for dental expenses, reimbursing you for 30% to 70% of the cost.
7. Personal insurance or cards. Dental insurance and discount cards can protect against high expenses, but you don't need them if you'll just resolve to take good care of your teeth and gums.
8. Remind yourself. You can combat forgetfulness by keeping your toothbrushes and dental floss placed near your eating utensils, or by keeping a recent expensive dental receipt in your pile of bills to pay.
9. Motivate your kids. You can help your kids remember by letting them choose their favorite flavor (i.e. Mint or Watermelon), and rewarding them for good dental checkups.

Thought for the Day:  "A good laugh and a long sleep are the best cures in the doctor's book."

~ Irish Proverb


The High Cost of Addictive Habits
1. Smoking. A smoking habit costs $1,000 to $2,000 each year in cigarettes alone. Non-smokers save about 30% on health care and insurance, 50% on life insurance.  Smokers are often first in line to be fired and less likely to be hired (mostly because they cost their employers more in health costs).  QuitNet.com is a great site to help you quit.
2. Substance abuse & Alcoholism. Alcoholism and/or addictions can be just as costly.  Between 25% and 40% of all patients in general hospital beds are being treated for alcohol-related problems.  Heavy drinkers pay 10% to 40% more for health care.  Light "social drinking" is okay for most people:  health experts suggest having no more than two drinks per day.  The ACA helps heavy drinkers get their life back.
3. Junk food & overeating. Overeating and junk food is an expensive and growing problem:  obese individuals pay about 25% more than average for health care.  The average American could save about 25% on food by eliminating junk food or at least cutting it to a minimum.  ConsumerSearch compares the effectiveness of weight-loss programs.

1. Health saving accounts: 5 Tips, Gerri Willis, CNN/Money.
2. Health Care Deductions Guide, Publication 969, Internal Revenue Service
3. 7 ways to avoid "going naked" on health insurance, Paul Bannister, Bankrate.com article.
4. Tips for Health Insurance Cost Cutting, National Association for the Self-Employed article.
5. Google Answers:  Save Money On Prescription Drugs, Google Answers article.
6. Cigarette Smoking, American Cancer Society article.
7. Health Care Costs of Alcohol, The Marin Institute article
8. Obesity Costs Rival Smoking, Jennifer Warner, WebMD Medical News
9. Take the bite out of dental costs, Carla Fried, MONEY Magazine.
10. Getting the Services You Need, Consumers' Checkbook dental article.

Poll:  The "Guys, You

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Here's my idea:

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