Many people discuss year-end tax planning with their accountants and investment planning with their financial advisors, but most people don’t think about year-end “health care planning.” If you have a high deductible health plan (HDHP), you should. There are ways you can save yourself – and your family – substantial health care dollars. Here’s how.
Do You Have a High Deductible Health Plan (HDHP)?
Are you paying a monthly premium for your health plan, and then also paying for health care services during the year up to a certain deductible amount, say $5,000 or $10,000?
If you are, you’re like many Americans. Whether your HDHP is through the Affordable Care Act (Obamacare) Exchange or your employer, at the end of the year your deductible may reset, which means come January 1, you will again be responsible for paying for health care services from dollar one.
We’ve put together some tips to help you manage and maximize your health care dollars to help you pay as little out-of-pocket as possible.
Note: Not all health plans are identical. The examples we offer are typical scenarios. It’s important for you to understand your health plan – see the section at the end of this post about questions you can ask your health insurer to help you know exactly what’s covered through your plan.
How Health Care Deductibles Work
If you are on a HDHP, you pay a lower premium monthly for your health plan, but you are also responsible for paying for health care services up to a “deductible” amount specified by your health plan. So, say your deductible is $5,000. You pay your monthly premium, but you also pay for any health care services out-of-pocket up to $5,000. Once you’ve paid this amount, any additional health care services are paid by your plan (plus any co-insurance you may have). The highest deductibles are in Catastrophic Health Plans and as well as the Bronze and Silver Exchange Plans.
In most cases, the deductible must be met during a 365-day “plan year,” dictated by the health insurer. This means that your $5,000 deductible is in play for one year. If you pay $5,000 out-of-pocket in the first month for health care services, any health care you receive for the next 11 months would be paid by your plan (less any coinsurance and co-pays). Once the year is up, your out-of-pocket paid amount resets to $0 deductible (you owe 100% again). Important: Plan years do not necessarily follow January 1-December 31 calendar years.
How to Know if You’ve Reached Your Deductible
Think about your health condition over the last 6-9 months. Have you been to your doctor a few times? Seen a specialist like an ear, nose, and throat (ENT) physician? Had some minor procedures? If this is the sum total of health care services you’ve experienced so far, you probably have not met your deductible.
However, if you’ve been an inpatient, had any major (or minor) surgeries, rely on multiple medications daily, or had a number of diagnostic tests like MRIs or CT scans, you may have met your deductible.
Here’s how to know. Look back at your Explanation of Benefits (EOB) paperwork you received from your insurance company for each encounter. With some health plans, you’ll also be able to pull this information down on their websites. This will tell you what the patient responsibility amount was/is – this is the portion that you are responsible for paying “out-of-pocket” that counts towards your deductible.
See an example here of an EOB here:
You can also check your bank records, noting if checks or debit/credit card transactions are tied to a hospital, surgery center, physician group, lab, etc. And always match them with your insurance company, who has records. (Note: It’s always a good idea to keep track of EOBs – errors are not uncommon, even insurance companies, as you may know.)
What to Do if You’ve Reached, or Are Close to Reaching, Your Deductible (Hint: Act Now!)
You are in an excellent position to maximize your health plan’s dollars. Before your deductible resets to $0 on your plan, now is the time to not only seek treatment for nagging or delayed health care issues, but also schedule an annual physical or preventative health measures. After all, your plan is now paying for the bulk of these services, not you.
If you are a former baseball player with chronic shoulder pain or a runner who feels hip discomfort, now is the time to get an MRI. If surgery is required, schedule it before your deductible resets. Now is also a great time to get the lab/blood work that may have been put off but recommended by your doctor. And refill your prescriptions in a 90-day supply, as well.
Depending on your age, preventative testing such as a colonoscopy or mammogram, or immunization for pneumonia or shingles might be in order. Even physical therapy that you’ve delayed may be a good idea to develop strength in that joint that’s aching.
You don’t need to get unnecessary tests, surgeries, etc. for no good reason. After all, depending on your plan, you may still be responsible for a co-pay or co-insurance. But if necessary, it’s a good idea to take advantage now while your health plan will pay the lion’s share of the costs!
What to Do if You’re Not Close to Reaching Your Deductible
If you are not close to reaching your deductible for the year, pushing health care procedures and tests until the next plan year may make sense. Always discuss your situation with your doctor and loved ones. If you do have a major health need, it may be wise in the new year to change your plan to a higher premium lower deductible plan.
If you are close to the end of your plan year and aren’t close to meeting your deductible, but need to have a minor procedure, waiting until the next plan year may be better idea to help you reach your deductible faster next year.
In the meantime, if you are ill or have any injuries or minor emergencies and haven’t met your deductible, there are alternative, affordable treatment options and facilities that could save you out-of-pocket expense. Rather than waiting weeks to see a doctor or specialist, or visiting an emergency room, you could receive treatment at a local retail clinic or urgent care center, or even schedule a telemedicine visit. You can use this website to find a retail clinic near you or a loved one.
Summary: Know Your Plan
If you are unsure about what type of health plan you have, here are some questions to ask your insurance and directions you can live by.
*What and how much is my deductible?
*When does my plan year begin and end?
*Where can I find complete information about my plan and participating physicians and providers?
*Keep all records of your Explanation of Benefits (EOB) documentation. This will help you track dollars spent towards your HDHP deductible. Question any charges with which you disagree.
*Plan your health year, as you would your tax year, whenever possible.
Learn more about this blog’s author, Steve Delozier, at http://emurgenthealth.com/.