The sequence of events goes something like this: You go to the doctor, pay the $10 or $20 co-pay on your way out, and shove the carbon copy receipt into the bottom of your purse or pocket. Later, you get an envelope with a piece of paper in it that says, "This is not a bill." It mentions that a bill is coming, but this isn't it, so you ignore it. Ditto for the second non-bill that says -- seemingly-- the exact same thing. Then a bill shows up that says that you don't have to pay it yet because the insurance company might pay some or all of it. Next, the "explanation of benefits" bill that says "this actually is a bill" arrives, and you ignore it, too, because, well, maybe they're kidding. Once the sixth or seventh envelope arrives, you figure it might be time to pay the bill (or send a "This is not a payment" payment just to be cheeky).
Repeat this cycle for every lab test, radiologist report, dermatological exam, and nurse practitioner appointment, and it's no wonder you have no idea what you're shelling out to keep your brood healthy.
I'll tell you what you spend on medical care: A lot. Health-care expenses are one of the largest line items on most family budgets. (Our resident retirement expert calls it the "fourth leg of retirement." In fact, it's often the very thing that can bankrupt your perfectly planned golden years.) According to research by consulting firm Milliman Inc., in 2005, the average family of four covered by an employer-sponsored PPO plan is expected to spend $12,214 on health-care costs, more than $2,000 of which will be spent on out-of-pocket expenses. That's a 9.1% increase over last year in what you're paying for medications, inpatient and outpatient care, visits to the doctor, and other medical miscellany.
What that $2,000 certainly does not include is the cost of your precious time dealing with the paperwork your appointments generate. The paper trail can be so labyrinthine that some people simply wait for an envelope from a collection agency before cutting a check.
Oh, my aching file cabinet
You wouldn't be blamed for considering that bill-management option (though do so at your credit score's peril). With more than 50 million Americans between the ages of 18 and 64 dealing with a chronic health problem (not including unremitting paper cuts), we're facing a serious forestry shortage if the trend continues.
Intuit (Nasdaq: INTU ) , the maker of the ubiquitous Quicken money management system, has tackled the tree crisis with a piece of software that cuts down on family health-care chaos. It was developed by a former Intuit software engineer who faced mountains of paperwork when his son was born with a serious medical condition. In less than one year, his family's bills amounted to more than $1 million. To deal with it, he developed his own medical expense management software program.
Years later, it became Quicken Medical Expense Manager. (The $49.99 package is available at Quickenmedical.com.) It helps log the medical and billing history for each member of the household (including pets) with details such as the amount billed, the provider write-off, co-payments, contact information, and even doctor's orders. It even has premade dispute letters to deal with billing errors that you might not have caught if you were ignoring the 14 envelopes arriving daily in the mail.
Medical record-keeping is an increasingly important part of family finances, particularly with more consumer-directed health plans putting the burden on patients to keep track of costs. (If you've ever lost money at the end of the year because you failed to spend the funds in your flex spending account, you recognize the sting of poor personal accounting.) The program helps you track expenses such as over-the-counter supply costs, drug co-payments, and even mileage, providing a running total that you can transfer into your tax software. (Guess who's getting four pairs of glasses at the end of this year!)
Intuit's medical software is probably most useful for those who are enrolled in paperwork-heavy PPOs (which more than half of insured individuals are). If you are enrolled in an HMO plan, the paperwork is pretty contained, unless you go out of network for a lot of your care.
Yeah, it's a lot more fun to track your portfolio than it is to track your medical expenses. But whatever you can do to free up time for the fun stuff is worth a few minutes at the computer after each of your doctor's appointments.
More filing Foolishness
As long as you're at it, how about tackling the rest of that financial paperwork?
- The calendar says it's summer, but you might as well complete your spring financial cleaning project.
- Here are some handy rules of thumb on which documents to trash and which ones to file for posterity.
- Having trouble picking a program? Here's more on the Quicken vs. Microsoft's (Nasdaq: MSFT ) Money debate.
Dayana Yochim doesn't own shares in any of the companies mentioned in this article.