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HEALTH SAVINGS PROGRAMS: WHAT, WHY & HOW

Jul, 13 2016

With healthcare these days, all the arrows are going in the wrong direction. Deductibles, out-of-pocket costs, and medical prices are all going up, while coverage is going down. And there’s no end in sight. As a result, Americans are becoming better healthcare consumers and finding ways to save. One way is a Health Savings program – sometimes referred to as a Health Discount card or program. Most people don’t want “discounted” healthcare, so “savings program” is much more palatable. Discount, savings, discount, savings…go with whatever works for you!

What is a Health Savings program?

In short, a Health Savings or Health Discount program allows members to get lower pricing on common medical needs – dental, vision, prescriptions, lab work, diabetic supplies, alternative medicine, chiropractic care, etc. As a member, you’re paying for access to a network of providers who have agreed to give members discounts on services, procedures and products. Discounts are only given because the member is paying to be part of the program.

These plans are another form of marketing for the provider. Every day, dentists, optometrists and vision centers pay for advertising to get you in the their door. Instead of paying for more marketing, savings plan providers agree to be part of the network and give the discount because of the huge member-base and consistent customer traffic being sent their way. So, they pass along savings to you rather than paying more advertising dollars.

Dental and Vision savings plans have been around for decades, but were typically only available to those who worked at mega-sized organizations. With the cost of health care skyrocketing, they’re becoming more popular and available to the general population. 

This isn’t an insurance program, so Health Discount programs…

  • are usually inexpensive (under $15/month for a family) to join
  • don’t have health restrictions or paperwork
  • allow the discount to be used as many times as needed.

Why do Health Savings programs work?

In the old days, we didn’t know the price of healthcare stuff and frankly, we didn’t really care because “insurance was paying for it.” We spend hours researching prices on cars, electronics, clothing, food, etc., but the cost of blood pressure meds for a month. Who knows? And we certainly aren't aware we can shop for discounts on things like eye exams, root canals or amoxicillin. 

Gone are the days when employers pay for full prescription, dental and vision insurance for our whole family. There are widening gaps in our insurance plans. Many procedures are no longer covered and we’re paying out of pocket for much more. According to the National Association of Dental Plans, at year-end 2014, there were approximately 205 million Americans or 64% of the population with dental benefits. Less Americans have vision insurance.

Sometimes procedures or products are only partially covered by insurance, sometimes not at all. Health Discount programs offer another way to save on medical care no matter whether you have great insurance coverage or no insurance at all.

How do health savings programs work?

One note of caution:  not all health discount programs are created equal! There are some that give weak discounts and at very few locations, so beware.

The depth of discount is based on how big the member-base is because this determines how much additional business is being driven to a provider which drives the level of discount a provider will offer. In other words, more members equal more savings. Different providers and different procedures/products will carry different levels of discounts. “Dentist A” may have a retail charge of $200 for a filling, while “Dentist B” might charge $150. Yet, they both might have the same discount plan price of $100. One dentist gives a 50% discount, the other 33%.  

The discount will often be stated as a range, such as “20-60% savings”. As you’re considering a savings plan, it’s important to know the average discount. If a savings plan claims “5-50% savings” but the average is 15%, that’s much less valuable than an average of 35%. Many networks may not want to give you this number, but it’s necessary to consider when making a decision. The better discount plans are able to negotiate average discounts of 30% or better. 

Note! You don’t get to “double-dip” on discounts (I know...bummer!). For example, if you have dental insurance, you would use that for your normal visits (cleanings, cavities, etc.). Then, you would use the savings program for the things not covered (i.e. braces, cosmetic treatments, during a “waiting period,” or maybe when your dental work goes over the maximum amount allowed in the year). Some insurance plans pay a portion of your fees, so a savings plan can help bring down the total cost allowing you both to pay less.

If you’re lucky enough to have full medical, prescription, dental and vision insurance coverage through an employer, you may not need a discount plan. However, that doesn’t describe most Americans. Insurance doesn’t cover cosmetic dentistry or braces, and some expensive procedures are only partially covered by insurance. And, there might be times your insurance is “used up” causing you to pay out of pocket for the remainder of the cost. A discount can come in handy in all these situations. If you don’t have insurance, a discount network could pay for itself many times over with the savings you’ll get.

You should be able to find a solid savings plan for under $15 a month for your family. You’ll find some for more than this, but look around. You’ll most likely get a better deal with multiple networks bundled together (like freshbenies), but find the set of services your family will actually use so you don’t pay for something you won’t use. At a price like this, you can see how the benefit will most likely outweigh the cost. If you save $45 every time your family has a standard teeth cleaning, $20 on your monthly prescription, and $100 on glasses/contacts, that adds up over a year!

Now, it’s your turn! Do you use a savings plan? Tell us if/how it helped save money. Are you considering a savings plan, but still have questions? Comment below or send me a note to heidi@freshbenies.com

Heidi

Heidi has a passion for helping busy families control their healthcare dime, time and peace of mind! She writes articles to do just that, while keeping it fun and simple for her readers! She also speaks on healthcare issues and is the owner of www.freshbenies.com.

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Tanya Boyd
Tanya Boyd
President of Tanya Boyd & Associates

I didn’t want to go to urgent care or the ER. Using Doctors Online in my freshbenies membership, I went online to ask a doctor. The doctor responded and said to check my blood pressure. He followed up with the next day to make sure my numbers were OK. By then, the feeling was starting to go away. He told me if it persists to contact my doctor. It was great that I didn’t have to go somewhere and wait forever, and it was free.” - Kelli from Texas

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Shannon
Shannon from TX
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It was Sunday night at 10pm and my husband was feeling very sick. He was considering going to an emergency room since he had a very busy work week ahead.

Using the freshbenies Telehealth service, we registered him online for a visit and within 15 minutes he received a call from a doctor. The doctor informed him he had the flu and called in a prescription to a local 24 hour pharmacy.

We avoided paying for an emergency room visit and my husband was back at work by Wednesday!