In Part 3 of our November Edu-Blog series on health insurance, I’m going to share some ideas on how to both determine how you use your health insurance plan and how to get the most out of it by focusing on high deductibles, provider networks, and FSAs. I believe that these three topics are amongst the most difficult things about any healthcare plan. It is so easy to inadvertently spend more money than you need to, go out of plan accidentally, or not get the maximum benefit from your FSA account.
Before we get started I want to impress upon you the importance of keeping your plan documents. These documents are the ONLY trustworthy source of information on how your plan works.¹Also,make sure you have the plan's Summary of Benefits and Coverage which is a standardized form that all plans must provide explaining the details of coverage. It's easier to read than the official plan documents. If you don't have one, ask your plan administrator for it. It's your legal right to do so.¹
Let’s get started.
Economizing on your deductible¹
Here are some basics you should be aware of if you have a high deductible plan.
The insurance company will pay for certain services even before you have met the deductible.
- All insurance plans must pay in full for preventive health services no matter whether you have met the deductible or not.
Not all health providers charge the insurance company the same, so look up prices if you can.
- Many health plans now enable members to look up some prices online.
You can save on some drugs by NOT using your insurance.
- Several former prescription drugs can now be bought over-the-counter like drugs for heartburn, insomnia, joint pain, migraine headaches, seasonal allergies, and insomnia.
- You can get some generic drugs for as little as $4 at big box stores.
- Prescription savings cards like GoodRX can help you significantly save on your prescriptions and most of the time the cost is lower than your insurers.
Avoiding the out-of-network trap¹
Here are some tips to avoid unwelcome surprises:
Stay in-network if you can.
- Network providers have agreed to accept the negotiated health-plan price as payment in full, even if you haven’t met your annual deductible, you’ll still pay the in-network price.
- If you go out of network, your health plan will only pay what it considers a "reasonable" price for the service so you'll owe the difference.
- For most health needs, including major procedures, your health plan will offer a choice of highly-qualified practitioners so only consider going out of network if you are ill with an unusual condition or need a hard-to-find specialist.
Beware of going out of network accidentally.
This commonly happens in two situations.
- When you go to a network hospital's emergency room but the doctors who treat you are NOT in your plan's network.
- When you have a planned surgical procedure with an in-network surgeon, only to find out that some of the doctors who worked on your case, like the radiologist and anesthesiologist aren't in your network.
If this happens to you and the bill is too high, try to get it reduced. Start by asking the doctor to discount the fee. If that fails, complain to the hospital, your insurer, your employer, and your state insurance department or state health insurance consumer advocate.
In this case the squeaky will often get the grease.
Settle on a price ahead of time for going out of network on purpose.
- First, look in your Summary of Benefits and Coverage for how much of the cost you'll have to cover if you go out of your network.
- Next look up the “fair” price in your geographical area for your test, procedure, or operation on FairHealthConsumer.org or Healthcare Blue Book. Then use those results to negotiate a price agreement with the out-of-network provider, and get it in writing.
Using a Flexible Spending Account (FSA)¹
Let’s start by looking at what a flexible spending account (FSA) lets you do. With this type of account, you set aside money tax-free from your paycheck to pay for medical expenses not covered by insurance. They are available within employer health plans.
How FSAs work
- Once a year, you tell your employer how much money you want to set aside from your paycheck into your FSA, You can put in up to $2,500 per year.
- You can use the entire amount right away once the year has started, even though the money is being deducted from your paychecks throughout the year.
- FSAs also reduce your taxes because the money you put into them isn’t subject to income tax. The higher your tax bracket the greater the benefit.
- If you lose or quit your job, you lose any unspent FSA funds.
Use it or lose it
- FSA funds don’t rollover so you have to spend the total amount you set aside every year or lose it. I recommend being clear about what you expect you will need each year so you don't put aside more than you think you need. In this case, underestimating is better than overestimating.
- You lose unspent FSA funds if you lose or quit your job.
Keep careful records
- Make sure you understand which expenses are eligible.
- Keep all evidence of these expenses, including receipts from the drugstore and other providers and the "explanation of benefit" forms you receive from your insurance plan since you'll have to submit them to claim money from your FSA.
Healthcare is more confusing than ever. It can feel like you have to be an expert plan administrator, insurance agent, and doctor just to get the right care or the right diagnosis. I sincerely hope that the tips we’ve been providing this month provide some direction and peace of mind as you navigate open-enrollment season. Have a wonderful week!