It's not exactly "breaking news" -- United States citizens spend more on health care than residents of ANY other country. And sadly, this trend isn't showing any signs of slowing, with health care costs rapidly approaching 20% of our overall national spending.
Would you hand over one out of every five dollars in your pocket for anything else? Probably not, but that's exactly what U.S. citizens are doing right now -- and what they'll likely continue to do for the next decade or more.
Health care spending in America to consume 1 in 5 U.S. dollars - Aimee Picchi, CBS News
In this brief, but eye-opening piece from CBS News, we learn that the steady growth of U.S. health spending is projecting to be nearly 20% of all spending by 2027. And it seems like it's because the health care we're paying for is working! Baby boomers are living longer, requiring more medical treatment as they continue to age.
Because of this, the same forecasts predict Medicare spending will be the biggest chunk of this projected growth, rising 7.6% each year until 2027.
We might not be economics experts, but we do know that the 5.5% average growth of health care spending year-over-year exceeds the overall growth in national spending by nearly a full percentage point, widening a gap that many experts still can't get their heads around. The next article tries to decipher it for us...
How Americans spend much more on health care than they realize - Philip Moeller, PBS
This short piece from PBS wastes no time getting to the point -- U.S. households spent $980 billion on health care in 2017, which works out to more than $3,200 per person, according to the Centers for Medicare and Medicaid Services' annual report on health spending.
As it turns out, consumers are only directly paying for a third of that total. Don't get too excited, though, since we're indirectly covering the remainder through federal and state taxes, premiums and other fees. And even though it seems like employers are footing most of the bill for worker health care benefits, when good insurance comes at the expense of higher paychecks, it's still coming out of employee pockets at the end of the day.
Thankfully, the article and report clearly detail where your dollars are going, so you have a better idea of what those paycheck deductions really mean as national health care spending continues to grow. Transparency is key -- we may not ever get used to handing over 20% of our own money just to handle health costs, but we certainly deserve to know why.
FSA Friday is a weekly roundup of the latest topics, tips and headlines to keep you updated on all things flex spending. It appears every Friday, exclusively on the exclusively on the FSAstore.com Learning Center. And for the latest info about your health and financial wellness, be sure to follow us on Facebook, Instagram and Twitter.
If you're like most people, you love scoring a deal. Happy hours, cash-back apps, and end-of-season sales are your "go-to" ways to save money. You wouldn't think twice about shopping around for a new car or a hotel stay. Why shouldn't your health get the same level of attention?
According to a recent Health Affairs study, most people don't comparison shop for services. Folks believe comparing costs is important, but only 3% actually do it. Knowledge is one big deterrent — 75% of people don't know where to get the info they need. And some are scared to ruffle any feathers with their current provider.
We get it — healthcare deals aren't lurking in your inbox like Nordstrom's latest flash sale. But there are major price differences between providers. Accepting the first offer may mean paying more than you need to. If you are ready to make a change, we have you covered. Here are some ways to save by comparison shopping for health care.
Stop overpaying for prescriptions
It's expensive to manage a chronic condition — especially with a high-deductible health plan (HDHP). Even with a health savings account (HSA), monthly prescriptions can be a tough pill to swallow. Luckily, you have more choices than the nearest drugstore.
WeRx or GoodRx are a couple of good comparison websites. By plugging in your prescription, you can compare prices at big box stores. If a pharmacy buys directly from a drug company, there may be extra savings they can pass along to you. You can also use these websites to see if mail order options are cheaper.
Compare prices for common procedures
When your doctor suggests a routine procedure — like an ultrasound or MRI — be sure to carefully jot down all the specifics. Don't leave the office without asking for the procedure's CPT code.
Nonprofit websites like FAIR Health manage the country's largest database of health insurance claims. They allow you to plug in a CPT code and to see the average local cost. You may be shocked to see the wide range of prices in your city for the exact same service.
For example, I plugged in my Nashville ZIP code and "sleep study" to see how much it costs for a diagnostic test. FAIR Health's estimates range from $2,845 (in-network) to $6,617 (out-of-network). That's a massive difference.
You can use the estimate to negotiate directly with the provider you choose. It may also come in handy if your insurance company pays less than you expected. FAIR Health offers step-by-step instructions on how to navigate both of these scenarios.
Never accept the first offer
There is nothing fun about wrestling with medical bills. But the truth is, some headaches are avoidable. Would you drop hundreds of dollars on home repairs without getting multiple estimates? Probably not.
You owe it to yourself to follow the same rules for health care. By uncovering affordable options, you may be less likely to delay a costly — but necessary — procedure. These proactive moves could keep you healthier for years to come.
Whether you budget week-to-week, or plan to use your FSA for bigger things, our weekly Real Money column will help you maximize your flex spending dollars. Look for it every Tuesday, exclusively on the FSAstore.com Learning Center. And for the latest info about your health and financial wellness, be sure to follow us on Facebook, Instagram and Twitter.
Figuring out a budget for health care can be tricky. After all, how do you know exactly what health care expenses you might have? Health care costs can vary greatly, but with an FSA you have a few added benefits.
5 Ways to Maximize Your FSA Savings
- The money you contribute is pre-tax. If you shop at FSAstore.com, you can save up to 40% by using your FSA (even more savings)!
- You should look at your health care costs every year. How much you need to contribute to an FSA can vary depending on the out-of-pocket medical expenses you have. Bonus: You can cover deductibles, co-pays and coinsurance with an FSA.
- Calculate your yearly health spending and potential savings with an FSA with our FSA Calculator.
- Ask your FSA administrator aboutmid-yearchanges to your contribution. You might be able to change your FSA contribution amount mid-year, if you have a "qualifying" event.Examples ofa mid-year change that is considereda "qualifying event" are having a baby, getting married, or changing jobs that affects your FSA eligibility status.Check with yourFSA administrator to see if your plan allows for these typesof changes.
- Shop for FSA eligible products at FSAstore.com. We have a large selection of many types of products to choose from with your FSA. You might even be surprised at which products are available for FSA coverage.
Healthcare costs are increasing. Sixty-one percent of American workers claim their healthcare costs increased for this past year's health insurance coverage, according to a nonpartisan Employee Benefit Research Institute (EBRI) report.
A Flexible Spending Account (FSA) offers two perks in one – it lets employees put aside pre-tax income toward out-of-pocket health expenses. You can expect to save up to 40% on money put in an FSA. Co-pays and over-the-counter medical products are just a few examples of FSA-eligible expenses.
You can contribute up to $2,500 to an FSA, and if your spouse has their own FSA, then you could each contribute $2,500 for a combined $5,000 for the household.
You can learn more about a FSAs or shop for FSA-eligible products directly at FSAstore.com.
Though increasing healthcare costs are a concern, workers reported the escalating costs attribute to “other financial difficulties," the EBRI added.
EBRI reported the following effects:
- 32% said they lowered contributions to retirement plans
- 57% said they lowered contributions to other savings.
- 22% said they had “difficult paying for basic necessities such as food, heat and housing.
- 38% say had “difficulty paying other bills."
- 27% said they “used up all or most of their savings."
- 33% said they “increased credit card debt."
- 16% said they “borrowed money."
Have questions about a Flexible Spending Account? Let us know in the comments, or you can go to our FSA Learning Center.