10 ways to beat the rising cost of health care

Deductibles, co-pays, and drug prices keep going up, up, up. These 10 smart moves can lower your expenses - but not the quality of the care you get.

By Amanda Gengler, Money magazine writer

(Money Magazine) -- Talk about a recession double whammy. It's bad enough that you've been working harder with less prospect of getting a raise. Now it feels as if you can't even afford to get sick.

According to benefits consultant Hewitt, the average insured worker at a big company is likely to spend $3,826 on insurance premiums and out-of-pocket medical costs in 2009. That's up 9% from last year, a remarkable figure when you consider that inflation overall is pretty close to zero.

It seems that in good times and bad, you can count on health-care costs to defy economic gravity. And it doesn't get much better when you hit 65 and qualify for Medicare. By one estimate, a couple retiring this year will need a cool quarter-million in savings just for medical expenses.

So for better or worse, managing your own health care has become an essential part of financial planning. Washington is hotly debating how to fix our high-cost health-care system, but in the meantime there are some things you can do to lower your bills without compromising on care. Here are your best strategies for easing the pain.

1. Before you say "ahh," ask "how much?"

Most of us still aren't used to the idea of talking money with a doctor. But you won't be shocking his delicate sensibilities. "The uninsured frequently ask for a discount or a payment plan, but most insured consumers don't realize that they can negotiate," says Ruth Levin of Continuum Health Partners, a New York City hospital system.

Negotiating is especially important if you have a big deductible, are using an out-of-network doc, or face a steep co-pay or co-insurance. Your doctor may be willing to charge less if you can pay upfront because it saves a billing hassle. Doctors and hospitals not in your insurer's network may still be willing to charge you in-network rates. And if you can't immediately cover a big bill, hold off on swiping your credit card. Providers often work out payment plans over many months without charging interest, says Levin.

You can also shop around. If you need a test or an operation, ask your doctor to recommend more than one facility. Your insurer may be able to tell you which provider will charge less. A few major insurers, such as Cigna, have websites that let their customers compare costs on common procedures such as CT scans. Of course, you don't want to base your decision on price alone. Check out your insurer's website or hospitalcompare.hhs.gov to see how well hospitals rate on quality control and patient outcomes.

Finally, ask about alternatives, says Davis Liu, a family doctor and the author of "Stay Healthy, Live Longer, Spend Wisely." For example, your doctor may suggest an MRI to figure out why your back is hurting. But if you push back a bit, she may also tell you that you can first try back exercises for a few weeks and see if the pain goes away on its own. It very often does.

2. Don't just swallow high-priced prescriptions

Health plans have gotten picky about pills. About 77% of workers with a drug benefit face three or more price tiers - one cost for generics and higher charges for "preferred" and "nonpreferred" brands. If Prevacid isn't on your preferred list, it could easily cost you $300 a year more than a generic version of Prilosec.

Your doctor won't necessarily know your insurance rules. And although pharmacists may be able to switch you from a brand to the equivalent generic, they can't move you to a similar alternative drug without a new prescription. So you may need to do some research. Your insurer or your pharmacy benefit manager - that's the company listed on your prescription card - may have a website that lets you both price drugs and find alternatives with lower out-of-pocket costs. If your plan doesn't offer this, compare retail prices at drx.com. That's helpful if you usually pay a percentage of the cost.

You can also save by switching where you buy. Many prescription plans give you a big discount if you use their mail-order pharmacy. Some retail chains offer popular generics for just $4 for a 30-day supply.