A Senior’s Guide to Helping Manage Healthcare Costs

About Nicole Pajer

Nicole Pajer is a Los Angeles-based freelance published in The New York Times, Woman's Day, AARP, Parade, Wired, Glamour, People and more.

a senior couple sitting on a couch looking at healthcare bills

A visit to the specialist, a lab bill from last month’s doctor’s visit, that urgent care bill you didn’t anticipate costing so much… Healthcare costs can add up. There can also be a lot of paperwork, things to figure out like which plan is right for you and decisions about things like choosing in-network versus out-of-network doctors.

While managing it all can be overwhelming, there are actions you can take to help keep your costs down. Here are seven steps to consider.

1. Understand what your health insurance covers

Whether you have Medicare, a Medicare Advantage plan, retiree coverage or private insurance, it’s important to take the time to understand your benefits. Each year, review your plan to see what services are covered, what you'll pay in deductibles, copays and coinsurance. Also make sure that your preferred doctors, specialists, hospitals and pharmacies are in your plan's network.

“One of the biggest errors people make is that they think about how much money they're spending on today's healthcare and don't think about the potential costs of tomorrow's long-term care,” says Evan H. Farr, a certified elder law attorney and retirement planner with Farr Law Firm, P.C. He notes that while Medicare helps cover most of what you'll need for the majority of acute medical situations, it won't cover ongoing custodial long-term care unless you fall under a very narrow set of exceptions. “This difference can cause quite a shock for many families who don't realize this distinction,” says Farr.

And while it can be tempting to automatically renew your coverage every year, make sure to consider all your options. “Both Medicare Advantage Plans and Medicare Part D Plans change their premiums, formularies, pharmacies in-network, physicians/providers who are part of their provider network, deductibles and co-payments annually,” says Farr.

And when you’re comparing plans, look at more than just the monthly premium. Consider your total annual costs, including deductibles, prescription drug coverage, provider networks, prior authorization requirements and your maximum out-of-pocket expenses. “An affordable Medicare Advantage Plan from last year could now become more expensive solely because your medication moved tiers or your doctor no longer participates within the plan's network,” adds Farr.

2. Take advantage of preventative care

Staying up to date on preventive care, like annual exams, can help you catch health issues earlier. This is important because catching something early not only allows you to treat it more effectively, but it can often be less expensive to treat conditions in their earlier stages. Health insurance plans like Medicare cover various preventative services, such as an annual wellness visit, screenings for conditions like diabetes and certain cancers, and vaccinations. It is helpful to confirm that a service is covered under your plan before scheduling. It’s also important to ask if this will be billed as a preventive service or a diagnostic test, as costs can differ if an abnormality is found or symptoms are being evaluated.

3. Ask about lower-cost medications

Before filling a prescription through your Medicare Part D plan, consider comparing its costs with the cash price through a coupon service like GoodRx or SingleCare. “For a lot of generics, the cash price beats what your plan would charge you,” says Sydney Balusek, a medical insurance expert and co-founder of Boomer Benefits.

Prescriptions purchased outside your Medicare Part D plan generally won't count toward your plan's deductible or annual out-of-pocket spending limit. But Balusek notes that for people who primarily take lower-cost generic medications, paying the lower cash price may still result in overall savings. “You're not likely to hit that cap anyway, so there's really no downside to paying less when you can,” she says.

You can also ask your doctor or pharmacist whether a generic or lower-cost therapeutic alternative is available. Options such as purchasing a 90-day supply or using your plan's preferred mail-order or network pharmacy can sometimes reduce prescription costs.

4. Look into financial assistance programs

Don't assume you won't qualify for financial assistance. “Many of the greatest ways to save money go unutilized because people assume they'll never qualify,” says Farr. Programs like Medicare Savings Programs can help eligible individuals pay Medicare premiums and other out-of-pocket costs. And services like Extra Help can lower prescription drug costs for those who qualify.

Farr also recommends exploring hospital financial assistance programs, state pharmaceutical assistance programs and veterans' benefits. “Instead of ruling yourself out of consideration for these programs due to assumed income or asset levels, you should apply,” he says.

5. Don’t ignore medical bills

If you receive a medical bill that's higher than expected, don't assume it's correct. "The largest error made is to believe all health-related invoices are accurate and all decisions regarding insurance are final," says Farr. Before paying a bill, compare it with your Medicare Summary Notice or Explanation of Benefits (EOB) to make sure the charges match.

If something doesn't look right, call the provider’s billing department, ask for an itemized bill and verify that your insurance was billed correctly. “If you don't understand why you received a charge, call the provider's billing department,” says Farr. “Also, ask if they can reduce the balance you owe, and if they offer any interest-free payment arrangements or financial assistance programs.” He also advises against putting medical debt on a high-interest credit card simply to make it disappear.

6. Stay organized

Medical bills, Explanation of Benefits (EOBs), insurance cards… These documents can pile up quickly, and if they aren't organized, it can be difficult to find what you need when you need it. Keeping them in one place can help you stay on top of insurance information, prepare for appointments and easily compare medical bills with your Explanation of Benefits (EOBs). Consider creating an electronic or physical filing system that includes:

Insurance cards
Explanation of Benefits statements
Medical bills
Prescription receipts
Healthcare contact information

7. Plan ahead for long-term care

Most of us focus on today's healthcare costs, but it's also important to think about the potential expense of long-term care. “One of the biggest errors people make is that they think about how much money they're spending on today's healthcare and don't think about the potential costs of tomorrow's long-term care,” says Farr.

If you or a loved one begins to need extra support, carefully consider the best solution. “A big piece of managing healthcare costs for seniors is being strategic about when and how you bring in paid care, instead of all-or-nothing,” says Shannon Feick, owner of Senior Helpers of Cincinnati. If it meets your needs, consider starting with part-time help at times during the day when it’s needed the most, which can keep expenses down. You can always add more care later if it's needed.

And if you or your spouse served in the military, ask whether you qualify for VA Aid and Attendance benefits, which may help cover the cost of in-home or long-term care. “For veterans and their spouses, one of the most overlooked resources is VA Aid and Attendance,” says Feick.

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