January is a great time to reset: diet, exercise, work-life balance, finances. For those of us who are covered by a high-deductible health plan (HDHP) it’s also the time of the year when deductibles reset. Your annual deductible is the amount of money you need to pay for care before your health plan begins to cover a portion of the costs.
According to the Kaiser Family Foundation’s 2021 Employer Health Benefits Survey, the average deductible ranges from $4,368 to $4,425 for an individual and $4,572 to $5,217 for a family, depending on whether the plan offers access to a health reimbursement arrangement (HRA) or a health savings account (HSA).
Once the deductible has been reached, the plan typically covers a large portion of the cost. You’ll pay the remainder – called coinsurance – directly to your provider. This means that if you are still in the deductible phase of the plan, you’ll be sent a bill for full amount of your care. When you are in the coinsurance phase, you’ll pay a predetermined percentage. In 2021, coinsurance for office visits averaged about 20%. If you reach your plan’s annual maximum for out-of-pocket expenses, you’ll pay nothing for in-network care for the rest of the year. Your plan will pay the full cost. For in-network care, the annual maximum can’t exceed $7,050 for one person or $14,100 for a family.
If you go out of network, you’ll pay more for your care, which also may be subject to separate deductible and out-of-pocket maximums. Before visiting new providers, check your insurer’s website or call the number on the back of your membership card to verify they are in-network.
Lower premiums (the amount you pay for your insurance coverage) are usually the trade-off for the higher deductibles in HDHPs. Even during the deductible stage, however, you can take steps to minimize your costs while maximizing your health. Here’s how.
Don’t Skip Preventive Screenings and Care – They’re Available at No Cost to You
HDHPs, along with many other plans, are required by law to cover a long list of care without any cost to the patient. Some types of care, such as annual flu shots, are available to everyone. Other preventative care, however, is available at no cost only to people of a certain age or with specific risk factors or depends on factors such as gender or medical history.
For example, women don’t pay out of pocket for their annual well-woman’s exams, and parents aren’t charged for well-baby and well-child visits. Check with your doctor to make sure you’re taking advantage of all the no-cost care that’s appropriate for you.
In addition to providing care at no cost to you, these services and screenings play an even more valuable role: the opportunity to spot issues and illnesses early on, when they’re easier to treat and to manage. Beyond saving you money, this can be a lifesaver.
Know – and Use – Free Resources
Check your insurer’s website or call the number on the back of your insurance card to discover what types of care are available to you at no cost. For example, some plans don’t charge a copay for certain virtual visits.
While you’re on the phone, ask whether you have access to a health information line staffed by clinicians who can help you can help you choose the right care in the right setting at the right time. They can provide a variety of services, such as reviewing home treatment options, following up after a medical appointment, or locating an in-network urgent care center.
In addition, your plan might offer access to health coaches, who can work with you one on one to address issues such as dietary concerns or your mental health.
Get the Care You Need – Without Paying for What You Don’t Need
Virtual care, primary care office visits, specialist office visits, urgent care, emergency rooms … the list of venues for finding care continues to grow. All are not created equal, however, in cost or in level of care.
- Virtual care can be ideal for minor medical conditions such as colds and flu, rashes, sore throats, headaches, stomach aches, fever, allergies, acne, and urinary tract infections (UTIs). As a bonus, you won’t have to worry about catching something from other patients in the waiting room. Depending on your plan, virtual care can cost the same or less than a visit with your primary care provider, and appointments are typically available in an hour or less.
- Convenience care clinics, located in retail stores and pharmacies, are also ideal for minor medical concerns or to receive vaccines. These clinics are staffed by nurse practitioners and physician assistants. The cost is typically the same or lower than your primary care provider’s office, and appointments are not needed.
- Health care providers’ offices are the best places to go for routine or preventive care, such as general health issues, check-ups, and screenings, and to keep track of medications. You’ll probably need an appointment, which may not be available quickly.
- Urgent care centers are for conditions that aren’t life threatening, such as fever and flu symptoms, minor respiratory symptoms, headaches, lower back pain, joint pain, UTIs, and minor cuts, sprains, bruises, and rashes. These centers are staffed by doctors and nurses and don’t require appointments – although a quick call or visit to the center’s website might secure an appointment and let you avoid what may have otherwise be a lengthy wait. The cost is lower than visiting an emergency room.
- Emergency rooms are designed to treat critical injuries and illnesses such as sudden numbness or weakness, uncontrolled bleeding, seizure or loss of consciousness, shortness of breath, chest pain, head injury or major trauma, blurry or loss of vision, severe cuts or burns, and overdoses. In addition to in-hospital ERs, freestanding emergency rooms are becoming more common in many areas. These ERs may look like urgent care centers, confusing some patients. Beware, because when you receive care at any ER – including those that are freestanding – you’ll be billed at a much higher cost than at other health care facilities.
Whenever possible, check with your health insurer about coverage details before visiting any provider, and always seek the best care to treat your condition at the lowest possible cost. For example, Cigna’s online cost estimator tools are personalized to reflect member’s true out-of-pocket costs, including plan discounts and deductible status.
Compare Costs Before Filling a Prescription
Prescription drug costs can vary among retail stores and through home delivery. Your health plan’s website and mobile apps may include a pricing feature that allows you to enter the names of your drugs. In return, you’ll see a comprehensive list of pharmacies and the amount each charges per prescription, along with information on generic and brand alternatives that might be less expensive. You all will see potential savings available via home delivery pharmacies for prescriptions that you take on a long-term basis.
Use Before-Tax Dollars to Pay Your Medical Bills
Many plan sponsors offer health savings accounts to members who are covered by HDHPs. Both employers and members may contribute to the account, up to the federal limit. For 2022, the limit is $7,300.
Contributions can be made with pre-tax dollars, which reduces taxable income, and any after-tax contributions are tax deductible. In addition, HSA funds earn interest tax free, and taxes are not paid on the money when it is used to pay for eligible healthcare expenses. Families at a 30% tax rate would save more than $2,000 in 2022 taxes if they contributed the maximum allowed.
As the fund’s owner, you decide how and when to use the money – to pay for eligible health care expenses or save for future needs. What you don’t use in the plan year earns interest, and you take the account with you when you leave the plan, change jobs, or retire.
You also might be eligible to add incentive money from your employer to your HSA by completing health screenings and participating in healthy activities. These programs vary, so ask your human resources department for details.
This Year, Resolve to Take Full Advantage of These Tips
Medical costs rose by an estimated 7% in 2021, after a 6% rise in 2020 and 5.7% increases in 2019 and 2018. (The overall U.S. inflation rate increased by 6.8% from November 2020 to November 2021.) As with other examples of inflation, the consumer pays the price. By planning where you receive health care services and by taking full advantage of those offered at no cost, you can help get your costs – and your budget – in line.
Understanding Health Insurance
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