savings

How to Cut Costs on Health Care

For most families, employers still pay the bulk of the cost, but you can do a lot to lower your out-of-pocket expenses.

I’ve been offered a new job, and I want to see how the cost of the new employer’s health care stacks up. How much does the average family pay for health care? What can I do to save money on health costs?

The majority of families still get health insurance through their employers, and the average cost of health care for a family of four with employer coverage is $25,826, according to the 2016 Milliman Medical Index. That’s a 4.7% increase in the past year and triple the cost in 2001, when Milliman first conducted the study and average health care costs were $8,414.

Employers still cover the bulk of the cost, paying an average of $14,793 while the employee pays $11,033, which includes the employee’s share of the premiums and out-of-pocket costs. Employees pay a larger share than in the past; they paid 39% of the total health care costs on average when Milliman first did the study in 2001. This year, their share accounts for 43% of the total.

The average family’s costs include $6,717 for their share of the premiums and $4,316 in out-of-pocket costs. A large portion of those costs is for prescription drugs, the price of which increased by 9.1% in the past year and by 13.6% from 2014 to 2015. Specialty drugs alone account for about 35% of the total prescription drug costs and nearly 6% of total health care expenses.

You can take steps to save money on out-of-pocket costs even before you have a chance to switch plans during open enrollment in the fall. For prescription drugs, ask your doctor if you can switch to a generic version or at least to a “therapeutic equivalent,” which could cost a lot less under your health plan. Also find out whether your health plan has preferred pharmacies with lower costs.

See whether you can save money by getting your drugs by mail order or by buying generics with cash at stores with special deals, such as Target, Walmart and Costco, rather than through your insurance. You may also save by splitting your pills, following your plan’s procedures for getting coverage for specialty drugs, and getting help from special pharmacy benefit programs. See 10 Ways to Spend Less on Prescription Drugs for more cost-saving strategies. Also see 50 Ways to Save on Health Care for more ways to save on all kinds of health care expenses.

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