After a car accident left Michelle Katz, a Washington, D.C., nursing student, with persistent back pain and numbness in 1998, she consulted a neurosurgeon, who told her she'd need an operation to repair her slipped disk. Katz, then 26, didn't have health insurance, so she did the only thing she could think of: She negotiated.
Katz offered to pay her surgeon and anesthesiologist a portion up front in exchange for a hefty discount and arranged a payment plan for the rest. When she got her hospital bill, she haggled with the billing department to drop some charges. All told, she ended up paying just half of the original $28,000 estimate.
"Before this, I didn't think you could negotiate with your doctor," says Katz, 35, now a corporate health care consultant and author of Healthcare for Less, which was inspired by her own experience. "But all you have to do is ask."
And ask you should — repeatedly. In 2007, a family of four covered by a typical preferred provider organization insurance plan (PPO) is expected to receive an average of $14,500 in medical services. If you fit that profile, about $5,100 of that will be your responsibility — in the form of premiums, co-pays, and deductibles. That's an increase of more than 8 percent over last year, following five straight years in which costs jumped more than 9 percent annually.
With a little research and some hard bargaining, though, you can cut that figure by half or more. Here are 10 ways to get started, along with the savings you can expect.
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Need an expensive test that's going to cost you a hefty out-of-pocket sum? It might be worthwhile to compare prices among different labs and clinics; fees can vary widely.
To compare prices, you need to know the CPT (Current Procedural Terminology) code, a universally accepted number that corresponds to an MRI, a specific lab analysis, or any other billable service.
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The American Medical Association's Web site, ama-assn.org, has an easy-to-use CPT search engine. Once you have the code, you can get price quotes from several providers. You may be surprised at how well you'll do.
"For a CT scan, the price could range between $500 and $1,500 at two different facilities," says Devon Herrick, PhD, a senior fellow at the National Center for Policy Analysis in Dallas.
*Save 20 to 66 percent
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For patients with insurance, the hospital co-pay or deductible can represent a very large amount of money. Some insurance companies will deduct this amount from the hospital's contracted rate. The unpaid portion is then your responsibility.
Here's a fact many hospitals won't openly admit: They're often willing to waive or reduce an account balance if a patient can demonstrate that the co-pay or deductible is a hardship. But you have to ask.