10 Tips to Make the Most of Your High-Deductible Health Plan

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As employers cut their costs for providing health insurance to their workers, they’re offering more high-deductible health plans. The premiums are lower, but you’ll pay $1,000 or more out-of-pocket before the insurance coverage kicks in — sometimes a lot more.

Not only are these plans gaining ground in the workplace, high-deductible health plans will be one of the options available to those who buy insurance on their own when the state online marketplaces open for business on Oct. 1 under the Affordable Care Act.

How do you get the best use of this kind of coverage? Money Talks News founder Stacy Johnson has some important information in the video below. Check it out, then read on for more information.

If you don’t have one now, a high-deductible health plan may be in your future. Crain’s New York Business says a survey found that 80 percent of large U.S. employers intend to make at least one high-deductible plan available in 2014. In some workplaces, it’s the only type of plan available.

The Kaiser Family Foundation says: “In 2012, about a third (34 percent) of covered workers were enrolled in a plan with a deductible of a $1,000 or more compared to 10 percent in 2006, and 14 percent were enrolled in a plan with a deductible of $2,000 or more compared to 3 percent in 2006.”

I have one of those plans, with a deductible of $5,000. I can tell you that it’s almost like not having insurance. Yes, it’s great to know that once I pay $5,000 out-of-pocket for my health care, the insurance will be there if I have a serious illness. But I find myself very conscious of every health care dollar I spend.

A new study comparing health care spending by men and women on high-deductible plans found that men are more likely than women to put off going to the emergency room, even for potentially serious conditions, The New York Times reported. Other studies have shown that high-deductible plans discourage lower-income people from seeking care.

Often the people who choose these plans are attracted by the lower premiums and hoping they won’t get seriously ill, which could force them to spend thousands before the insurance kicks in.

Your plan may be changing

If you’ve purchased a bare-bones plan with a very high deductible, that plan likely won’t be available next year if it doesn’t meet the new standards of the Affordable Care Act, commonly known as Obamacare.

The Washington Post explained: “In addition to providing 10 so-called essential health benefits and covering many preventive-care services at no cost, plans must pay at least 60 percent of allowed medical expenses and cap annual out-of-pocket spending at $6,350 for individuals and $12,700 for families.” Obviously a plan with a $10,000 deductible for an individual won’t pass the test.

Also, says The Wall Street Journal:

Under the Affordable Care Act, new and nongrandfathered health plans for some small employers will be subject to an annual maximum deductible of $2,000 per individual, and $4,000 per family, though some insurers may seek waivers to allow for higher deductibles if they argue that their plans are otherwise unaffordable.

What can you do if your individual plan disappears or your employer’s plan doesn’t meet the new standards? Buy your coverage through your state’s online marketplace. Plans available there meet the new standards, and buying through the marketplace may make you eligible for subsidies in the form of a federal tax credit to reduce your premiums.

Whether your high-deductible health plan is changing or remains the same in 2014, there are ways to make the most of it:

1. Claim your freebies

Under the Affordable Care Act, certain preventive procedures are free to you, even with a high-deductible policy. Make sure the doctor’s office or hospital accurately codes the tests you have so that the insurance company knows it’s one of the free tests and covers the cost. You can find the list of free procedures and screenings here. There’s a separate list for women and for children.

Before you have a test or screening, check to make sure which costs are covered. Stacy found out the hard way that some of his annual physical was at no cost to him but that much of it was.

Also make sure your insurance company follows the rules. For instance, the government told insurers that polyp removal during a routine free colonoscopy should also be free of charge to patients, after it learned that some patients were being billed. Also, says Kaiser Health News:

Another gray area emerges when people are at higher risk for colon cancer because of family history or their own history of polyps. In these cases, patients are often advised to get a colonoscopy more often than every 10 years, the recommended frequency for people at average risk. In February, the federal government clarified that high-risk patients could qualify for more frequent screening without cost sharing.

2. Ask for a discount

Tell your doctor’s office or the hospital that you have a high-deductible plan and ask if there’s a discount for paying cash. (My dentist provides a discount but the doctors and hospital where I live do not.) You may even find that a doctor will give you a considerable discount if she knows you have to cover the entire cost out-of-pocket.

If you can’t afford to pay, ask the doctor or hospital for a low- or no-interest installment plan. Some still offer them.

Needless to say, you should ask whether a less expensive, alternative treatment is available.

3. Save on medications

Ask your doctor if a generic exists for the drug she wants to prescribe. If so, don’t stop there. Consumer Reports found a 447 percent difference in the price when it surveyed stores for the cost of generic versions of five widely prescribed medications. Costco was the cheapest, CR said.

Also, see this post about 10 ways to save on prescription drugs.

4. Compare prices of medical providers

We’ve previously reported that hospital prices across the country vary wildly for the same procedure. While cost shouldn’t be the sole basis for selecting a health care provider, it should be part of your process. The New York Times has a tool that lets you see how prices at your local hospitals compare with the national average. The federal government makes data available too. Other websites can also help you find the best prices for the procedures you need.

When you call around to compare prices, make sure you identify your insurance company so you’re quoted the rate charged to it and not the so-called “chargemaster” rate normally used for people who don’t have insurance. It’s likely much higher than the rate your insurance company has negotiated with the provider.

5. Stay in your network

Even though you’re paying out-of-pocket, you’ll pay the lower in-network rate if you stick with the health providers in your insurance plan’s network, the Los Angeles Times says.

6. Open a health savings account

With qualifying high-deductible plans, the IRS allows you to create a health savings account — a savings or investment account where you can deposit pretax earnings to spend on health care. Whatever money and interest earned that you don’t spend remains in the account year after year, while you can continue to fund it. Many employers kick in some money too.

This year, high-deductible plans that qualify for an HSA have a minimum deductible of $1,250 for individual coverage and $2,500 for a family. An individual can set aside $3,250 in an HSA this year, and a family can save up to $6,450. Increase the number by $1,000 if you’re 55 or older.

Once you hit 65, you can withdraw the money for nonmedical expenses, but you’ll pay income taxes on it. (Kiplinger has a detailed explanation of how HSAs work.)

7. Have a super-solid emergency fund

It’s asking for trouble to buy a high-deductible plan without having money equal to the deductible in a savings account or HSA. That healthy emergency fund will keep you from racking up interest on the unpaid balance you owe to the local hospital or clinic or prevent you from putting your bill on a high-interest credit card.

8. Keep good records

Keep a copy of all of your medical receipts, just in case the insurance company makes a error. Maintain a running tally of the total if you’re getting anywhere close to reaching the deductible.

9. Do some research

It’s unwise to not go to the doctor when you have a problem. But you don’t need to see a professional for a simple case of the sniffles. The New York Times says many insurance providers have online information and nurse advice lines that can help you understand symptoms. If they indicate a serious problem, don’t delay. That could cost you substantially more.

10. Work the system

NPR told the story of a man who met the $4,500 deductible of his plan when his appendix had to come out. After that, the insurance covered the cost of a non-emergency procedure he’d put off. In some cases, you may still owe a co-payment or coinsurance after you reach the deductible, but you’ll still pay for less.

Are you among the growing number of Americans with a high-deductible health plan? Were you surprised about how much you had to pay out-of-pocket? Have you delayed medical care because of that? Let us know on our Facebook page.

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  • Debra Beasley

    I’ve had a high deductible plan for years. It’s with my former employer though – and is not HSA qualified. I wish I could have an HSA because they are the only qualified account that gives you a free ride on taxes – both when you put the money in and when you take it out (as long as you use it eventually for qualifying medical expenses). I wish every young person in America would start one because they can save a lot of tax free dollars that can grow to a powerful bundle by the time they get older and start having children or medical issues of their own.

    I do get a discounted rate on medical bills because I am in a large network. The doctors have already discounted their fees significantly to be in the network and aren’t likely to accept less from anyone except uninsured people, who are paying completely out of pocket. Since we do have high deductible, both my husband and I have both tried to find out the cost of services in advance but have been unsuccessful. Isn’t this one of the reasons for the health care legislation? To create “transparency” in health care costs? It is impossible to find out (or negotiate) the price of any medical services in advance….at least not if you have insurance. Maybe if I were uninsured they would tell me??

    I have also had coding issues with getting my “free” preventive services on my high deductible plan. Even when I tell my Doctor that I only want the services that are covered, I still get billed extra by the labs. It takes multiple calls to the doctor and the labs, each year, to get the “free” services that I am entitled to. And, I usually do wind up paying a few dollars for something that was ordered, that didn’t meet the “preventive” services, allowed by my insurance. I tell my clients that they are entitled to free preventive procedures, but they have to be prepared to make multiple phone calls and fight for every penny.

    • soung luy

      Yes, I agree with everything you had said because it happened to me too. I live in California but I had BCBSNC who puts an in-network doctor on their website but found out the hard way from the doctor’s billing company that he was an out-of-network provider of BCBSNC. I also had coding issues to get free preventive services, and spent countless hours on the phone with the healthcare provider, the labs, and BCBSNC. I hope something positive would come out of Obamacare. We need more transparency in this system. Now this year, our deductible doubled. I am scared to see a doctor because of it.