Healthcare Costs Expected To Rise To Match Inflation — 6 Ways To Compensate
The cost of medical and healthcare in the United States has been one of the few semi-bright spots during a year of soaring inflation, as healthcare prices have risen at much lower rates than overall inflation. That might not last much longer, though.
Healthcare prices will likely increase more quickly and lead to higher insurance premiums and more costly services for both consumers and employers in 2023, according to a new report from the Advisory Board, a healthcare research site. It cited a Kaiser Family Foundation (KFF) analysis of Bureau of Labor Statistics data, which found that healthcare costs increased by 4.8% in July from the previous year.
While that was much lower than the overall inflation rate of 8.5%, healthcare price increases have shown signs of accelerating and are expected to continue doing so in the coming months.
“The relatively high rate of inflation seen in the rest of the economy may eventually translate to higher prices for medical care,” the KFF analysis said. “This may lead to steeper premium increases in the coming years.”
The lower inflation rate for healthcare vs. other consumer price categories is a departure from the norm. Over the last two decades, healthcare costs — including medical services, insurance, medication and medical equipment — have risen at a much faster clip than other consumer prices. One reason this year is different is because the healthcare/medical industry has not been impacted nearly as much by supply chain disruptions as general consumer goods.
Even so, the consumer price index for July 2022 showed that healthcare costs increased in several different areas, including nursing homes and adult day services (4.5%), inpatient hospital services (3.9%), outpatient hospital services (3.5%), prescription drugs (2.8%) and physicians’ services (0.8%). In addition, the producer price index showed that year-over-year costs for health services in July increased 4.1% for private insurers and 3.4% for Medicaid.
With healthcare prices projected to rise at a faster pace in the coming months, there are some steps you can take to reduce the impact of inflation. Here are some money-saving hacks that can lower your healthcare costs:
- Use generic drugs whenever possible. For example, if your doctor prescribes you a brand name drug, ask whether it would be okay to use a less expensive generic substitute.
- Use in-network providers: Your health insurer likely has deals with certain providers that will give you the best prices. Going outside of your network almost always means you’ll pay much higher prices — about 300% on average, according to an analysis by America’s Health Insurance Plans.
- Request 90-day prescriptions: You’ll likely pay less for a 90-day supply of medicine than you would for a 30-day supply, and you’ll only have to pay your copay once instead of three times.
- Shop around for care providers: Start by checking Healthcare Bluebook to get a sense of what a fair price for certain procedures are in your area, and then call around to a few providers and ask for a quote based on your health insurance. Different providers charge different prices, so you could end up saving a considerable amount of money.
- Shop around for drugs: Similarly, drugstores and pharmacies often charge different prices for drugs. Retailers such as Walgreens and Costco have prescription savings clubs that offer discounts on generic prescriptions and often match competitor prices.
- Negotiate your bills: If you are paying out of pocket for a procedure, contact the hospital’s billing department upfront to see whether there’s any wiggle room in the price. If you’ve already had a procedure but can’t afford to pay the bill, try negotiating it to bring down the cost.
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