Out-Of-Pocket Medical Costs On the Upswing In 2012


(Image by Laura Smith, Flickr)

Consumer medical spending isn’t going down in 2012 — it’s rising, and above the rate of inflation. One study examines the out-of-pocket burden of medical spending, and it’s not a pretty picture.

Palo Alto, Calif.-based Simplee, a medical bills consumer consultancy, is out with a new report that shows out-of-pocket medical costs have risen 3.3% from the first quarter of 2011 to the first quarter of 2012.

That’s well above the average U.S. inflation rate of 2.65%, as measured by InflationData.com.

At an annual amount of $962, the average amount of cash U.S. families pay to cover those out-of-pocket costs isn’t chicken feed, either. The chart bellows shows such costs rising across the board (with the lone exception of dental care):

Total Consumer Out-Of-Pocket Health Care Costs

Spend Category Q1, 2011 Q1, 2012
Medical $636 $670
Pharmacy $117 $143
Vision $20 $28
Dental $121 $158
Total Out-of-Pocket $931 $962

Source: Simplee.com

To square off better against rising out-of-pocket costs, more and more Americans are turning to a new tactic — account-based health insurance plans — which provide lower premium costs in exchange for higher deductibles.

According to a survey  by the consulting group Towers Watson, 59% of U.S. companies already offer account-based health plans, and 11% more say they will offer them in 2013. The firm says health-based accounts have nearly doubled in the last two years, from 15% in 2010 to 27% in 2011.

Putting the term “consumer” back in health plans should make Americans more cautious about their health care spending, and encourage them to shop around for better deals, just like they would for a new car or a new home.

“To be truly successful at containing costs, employers need to empower their employees to make smart health care consumption decisions with financial incentives and tools that provide information on pricing and quality,” says Helen Darling, CEO of the NBGH, in a statement. “Employers can also reduce their claim costs and boost the productivity of their employees by using incentives to promote health improvement and behavior change.”

To further cut costs, health care consumers can shop around for the best and most affordable medical service. Try negotiating with specialists, like imaging and lab specialists, and medical equipment providers. Chances are there is more than one in your area, and you can use that as leverage in negotiating the costs down.

Also, when you plan a medical procedure, aim for a middle-of-the-week appointment. Health care providers may charge more for Monday and Friday appointments, and pay as much as you can upfront. If you pay 100% upfront, you can earn a 5-10% discount on service costs.

With out-of-pocket health care costs continuing to rise, consumers have to learn how to get creative to keep costs down. Their household budgets may depend on how well they do on that front.


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Published May 1, 2012 Updated: December 27, 2012
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