negotiation 101

You’ve heard this plenty, so I’ll only say it once:  Medical costs in retirement can be sky high.  I’ve heard estimates that Medicare beneficiaries can spend anywhere from $2,000 to $5,000 a year on out-of-pocket expenses, and Fidelity Investments estimated last year that a 65-year-old couple would need $230,000 to cover medical care throughout retirement.

That’s a lot of money, so it helps to save where you can.  One area that I think isn’t covered enough is the doctor’s office – and, in particular, your ability to negotiate there. If you don’t have health insurance, your policy doesn’t cover office visits or a treatment you required, or you just haven’t met your deductible yet, you should always discuss payment options with your doctor. Many will be more than willing to work with you. A few tactics you can use to trim your bill:

Offer to pay cash. Often, insurance companies can take three to six months to process payments and get the money in the doctor’s hands. Avoiding that lengthy process may be worth ten or twenty percent off, in the doctor’s mind, so if you can pay cash upfront you might get a deal.

Pay the bill promptly, and in full. Some hospitals will give you 10% off if you pay the entire bill within 30 days.

Insurance companies negotiate lower rates with doctor’s office. That means if you’re going into an office without coverage, you may pay more in total than someone who is covered. If you offer to pay the rates charged to people who are covered by insurance, the doctor may take it.

Ask for a payment plan. If you can’t pay the total amount upfront, but you can chunk it down into three or four months worth of payments, ask if the doctor could work out a plan with you. You may not get a steep discount, but you won’t blow your entire month’s budget on one visit either.

Know whom to talk to. Whom you approach about a discount depends on the office or hospital, but the best place to start is with your doctor. If it’s a small office, he or she may work with you directly. If it’s a hospital, your doctor will at least know where to send you. Understand:

Sometimes the billing department makes a commission based on how much they’re able to collect, which means they’ll be less likely to issue a discount upfront.

Establish a relationship. You’ll be more likely to get a deal from a doctor who’s seen you a few times and knows that you’re a good and reliable patient.

If all else fails, ask for samples. Even with insurance, prescriptions can sometimes run $50 or more, but doctors often have closets dedicated to sample medications. If you’re being prescribed a short-lived medication, you just might be able to get enough to avoid the pharmacy altogether.