How to Budget for Medical Copays
Have you ever skipped filling a prescription after a trip to the doctor because of the cost? According to a study done by the Centers for Disease Control and Prevention (CDC), 8 percent of adults in the U.S. avoid taking their prescribed medications to save money.
With the typical copay for a primary care physician ranging from $15 to $25 and a visit to a specialist ranging from $30 to $50, the costs of routine doctor visits and filling necessary prescriptions add up.
Throw in trips to an urgent care at $75 to $100 each or emergency room visits at $200 to $300 a pop, and it’s enough to make you consider suffering through whatever’s ailing you.
But not taking medications or skipping a trip to the doctor or ER is not a good money-saving strategy. In fact, that tactic can cost you more in the long run and can have serious implications. A better approach is to plan for the expenses.
How Much Do You Spend on Copays?
Many factors affect your actual spending on doctor visits and medications such as the terms of your specific insurance plan, family size, where you live, your health status, the frequency of doctor visits and filling prescriptions, and even your income level.
But, on average, health care costs account for almost 8 percent of the average American household's total spending or 6.2 percent of the household's pretax income, according to the U.S. Bureau of Labor Statistics.
Of the total annual health care spending, which includes insurance, 18 percent is spent on "medical services"—encompassing doctor and dentist copays; 8 percent goes towards prescription drugs; and 3 percent is spent on "supplies"—including eyeglasses, contacts, and medical equipment.
Here is what the average spending looks like at various income levels:
|Pre-tax Annual Income||Total Annual Health Care Spending||Medical Services|
(Copays, lab tests, x-rays, etc.)
(eyeglasses, hearing aids, etc.)
Tips to Prepare for Copays
Outside of your annual physical or other routine visits, it’s difficult to predict precisely when you’ll have to shell out money for your next medical or prescription copay. But there are strategies you can employ to help you be prepared for the expense—whenever it comes.
Take Advantage of an FSA
Setting aside a portion of your pre-tax income for medical expenses in a Flexible Spending Account (FSA) through your employer, if available, is a great way to save money and stretch your health care budget. Just be sure not to overestimate how much you’ll use, or else you’ll lose money at the end of the year.
Establish a Copay Fund
If you do not have access to an FSA or you anticipate your spending will exceed the contribution limits, decide to set aside money in your budget each month for doctor and dentist visits and prescriptions, regardless of whether or not you anticipate an expense that month.
For an accurate idea of your actual spending, look back on the past 12 months of your Explanation of Benefits Statements, and calculate how much to set aside each month. Essentially, you’re establishing savings ahead of time so that you have the funds available when needed. You may want to consider keeping the fund in a separate account with its own debit card to make sure the money isn’t spent elsewhere.
Reduce Your Spending on Medications
Again, skipping out on filling prescriptions isn’t the best savings strategy. Instead, actively seek ways to spend less on your meditations. For example, filling them through your insurance company’s mail-order program may be cheaper than going through your local pharmacy.
Likewise, ask your pharmacist to compare the costs of filling your prescriptions with and without insurance.
In some cases, it may be cheaper to pay out-of-pocket because established copays for prescriptions can sometimes be higher than the actual cost of the medication.
Prioritize Your Health
While the cost of visiting the doctor and filling prescriptions is high and presents a valid struggle, keeping yourself and your family healthy should be a priority.
Plan ahead as much as possible so that handling the costs of your copays is merely an expense and not a budget buster.