Tag Archives: deductible

What does “Deductible Waived” on Co-Pays Mean (And Is It a Good Thing)?

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When you see what your health plan’s co-pays are, it’s easy to tell how much you’d pay for a doctor’s visit, lab test, or x-ray. But what does it mean when the “Deductible is Waived” for the co-pay? And will this cost you more or less in the end?

Normally, you are responsible for paying your full deductible before your insurance pays anything towards your health care. However, some plans will waive the deductible for certain services, usually office visits or emergency care if you’re admitted to a hospital.

Let’s say your co-pay for a doctor’s visit is $25 and your deductible is $1,500. If the doctor charges $200 for a visit, you would normally pay the $200 yourself and it would be applied to your deductible. If the co-pay is waived, you’ll just pay $25.

 

Sounds like a good deal right?

Maybe, maybe not. Waived co-pays can be a great deal if you are pretty healthy and do not expect to meet your deductible. They’ll allow you to skip over paying the full charge and only be responsible for the co-pay. They can also save you a lot of money if you are ever admitted to a hospital from the emergency department.

But if you would meet your deductible anyway, this feature doesn’t really save you money in the end. It might actually drag out how long it would take you to meet your deductible, just shifting the out-of-pocket cost to other services. Or even worse, some plans will not apply that $25 co-pay you just paid to your deductible, so you won’t get credit for the money you just spent.

 

And keep in mind that many preventive care benefits are 100% covered anyway, regardless of whether you met your deductible.

So your best bet? Enjoy the waiver benefit if you have it. But be wary of paying a higher premium for the feature if you use a lot of health services–it might not be worth the cost. And always check on exactly what costs are applied to your deductible if you expect to meet it!

 

How to Start a New Health Plan Off on the Right Foot

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Welcome to a new year, with new health benefits. You just chose a new health plan and now it’s in full effect. But most people don’t have a full understanding of how their benefits work. This means that many of them end up losing money in their spending accounts, paying more for care, or getting claims denied.

Follow these tips to make sure you start off 2013 right.

Plan for your Deductible
Guess what–deductibles have gone through the roof over the years, so that often means more cash out of your pocket. If you are one of the 65% of people who have a high deductible health plan, it’s especially important for you to plan your spending. High deductible health plans (HDHPs) come paired with Health Savings Accounts (HSAs), or accounts where you can save money just for medical expenses free from taxes. To be best prepared, you should plan to save at least the amount of your deductible in your HSA as soon as possible.

Network It
Most health plans have some restrictions on what providers you can see or they cover much more on visits to in-network providers. Find out the type of plan you have and whether you have a provider network. HMO plans are the most restrictive–don’t even think about going to a non-network provider unless you want to pay the full cost. PPOs have some more flexibility, but services in-network will be less expensive. POS plans give you more freedom, but often involve more paperwork for out-of-network visits. And finally, FFS plans allow you go to any provider you want, but few companies offer this option anymore.

Get Spent
Did you sign up for an FSA or HRA? Don’t forget about the money in your account. These funds disappear if you do not spend it by the end of the year. Do some planning now by finding what eligible expenses you expect this year so that when they come up, you’ll know to pay with your FSA or HRA, insteading of other funds. If you have an HSA, the same “Use it or lose it” rule does not apply. Your savings will roll into the next year.

Practice Prevention
All health plans must cover a list of dozens of preventive care services, all free of cost. Get your money’s worth by checking out the list and asking your physician what they recommend. Even if you have a high deductible plan and you have not met your deductible, you can still get these services completely covered, as long as you don’t have a pre-existing condition that already required one of these tests or screenings. Learn more about preventive care here.

Have a Non-Emergency Plan

What do you do on the weekend or in the middle of the night when you’re not sure if a medical condition is serious enough for the ER or can wait for a doctor’s appointment?  Most health plans have a variety of options for these uncertain situations such as nurse advice lines or extended-hours urgent care. Know your options so that if you’re caught in the situation, you can choose to avoid an expensive ER visit. Of course, always go to the ER if you are having a life-threatening emergency.


5 Mistakes To Avoid During Open Enrollment

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 This post originally appeared on the Mint.com blog. 

The last few months of the year usually mean time to think about choosing new health benefits. Some people think about Open Enrollment as an opportunity—it’s your chance to switch plans! But for most, it’s a looming headache: time to stress about choosing the right benefits.

It could be that there are just so many more options today than ever before. Several years ago, most employers just gave you a choice between a low-cost HMO and a more expensive PPO. Now the options have multiplied into an extended family of acronyms. To make things worse, employers and health insurance companies are pushing more costs onto consumers, so it’s even more important to make sure you’re getting your money’s worth.

As you approach your Open Enrollment period, here are 5 common mistakes, and how to avoid them.

1)   Doing nothing

Almost 9 out of 10 of us just keep the same benefits we had last year. That’s not necessarily a problem, especially if you’ve done your research and your needs haven’t changed. Just make sure nothing substantial has changed about the plan either. Sometimes premiums increase or  benefits get cut, and over time, the plan that was once a good deal may not be the best one for you anymore.

2)   Shopping only by the premium

It’s easy to focus on how much health insurance will cost you each month because it’s a clear, predictable expense. But don’t overlook what you’re paying for or you may find yourself facing big costs later on, such as high deductibles or co-insurance.

3)   Over-insuring

It’s possible to have more insurance than you need. While good-for-you from a health perspective, this might not be that great from a financial perspective.

This doesn’t necessarily mean choosing the cheapest plan if you are a healthy individual—because we are all at risk for those unexpected medical events. But it might mean choosing a plan that has a more limited network, like an HMO if you are not seeing any specialists. Or choosing a high-deductible plan if most of your visits are routine preventive care.

4)   Under-insuring 

Of course, you don’t want to go too far in the other direction choosing too minimal of a plan either. If you choose a high deductible plan, you should be able to pay the deductible at any time if needed. In an ideal world, you’d have lots of time to save up cash to cover your deductible in an HSA linked to the plan. But if you enroll in a high deductible plan, and suddenly have some medical bills before you’ve accumulated enough in your HSA, you could be in trouble.

5)   Ignoring the savings accounts

FSAs (Flexible spending accounts) and HRAs (Health reimbursement accounts) pretty much mean free money on the table. But there are estimates that as few as 20% of people set up an FSA when it’s offered.

If you’re turned off by the idea of keeping receipts and faxing photocopies, give these savings accounts another chance. Now, most issue debit-like cards and many merchants are set up to automatically recognize FSA or HRA eligible expenses—so you can spend easily. You should still keep receipts as proof, and you might still need them for certain expenses. But the tax savings are well worth the work.

 

 

How to Choose the Cheapest Health Plan that Still Meets your Needs

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This post appeared earlier on Mint.com. 

Maybe it’s Open Enrollment time or maybe you’re starting a new job that offers health benefits.  What’s the key behind all the terms – HMO, PPO, HDHP—and what can they tell you about how much that plan will really cost you?

The two most common terms, HMO and PPO, have to do with physician choice. And a HDHP is about the deductibles. As a general rule? HMOs will offer greater savings than PPOs, but at the cost of less choice and control. And HDHPs can save you even more money if you are healthy and don’t get frequent medical care.

So which plan fits you?

People with an HMO

  • Pay lower monthly premiums
  • Have to go through a primary care physician for everything
  • Have to get a referral for specialty care

People with a PPO

  • Pay higher monthly premiums
  • Can generally go directly to specialists
  • Will usually pay more for specialty care when they do get it

People with a HDHP (High deductible health plan)

  • Pay lower monthly premiums
  • Have a high deductible—you’ll be responsible for at least $1,200 out-of-pocket before your plan pays anything
  • Can open an HSA (health savings account) to save money specifically for health care costs with big tax advantages
  • Are usually younger and healthier

Some things are consistent across HMOs and PPOs – both have to cover preventive care at no cost to you (and that’s even if it’s an HDHP, and you haven’t met the deductible yet!), emergency care at out-of-network hospitals at the same level of coverage as in-network hospitals, and both have the same annual and lifetime out-of-pocket maximums.

Prescription coverage will vary by the plan.

If you’re overwhelmed about choosing the best plan for you, try focusing on two things: Physician choice and how often you need health care. Are willing to pay more to get easier access to specialty care when you want it? And are you willing to chance having to pay a higher deductible to have lower monthly premiums?

For many people, simplifying it to these two preferences will help lead you to the right plan.

Tricks to time your health care to get the most out of your plan

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Just about every health plan has features that are tied to the calendar year: deductibles, annual benefit limits, and FSAs (Flexible Spending Accounts). And through just a bit of planning, you can save a lot of money on health care.

It’s all about timing. Try these tricks for getting the most out of your benefits.

Go on a deductible-spree:

Once you’ve met your deductible, it’s a good time to get any major, expensive services as well as other routine or elective care. That’s when your plan will pay out its full benefits. If you meet your deductible mid-year, try to plan any other health care services for that year. Waiting until the following year means you will have to pay the deductible all over again.

Watch benefit limits:

If you are getting repeating services – such as physical therapy, counseling, or chiropractic visits, don’t lose track of how many you’ve received. Many plans have an annual limit so stay within this number and know when the benefits roll over.

Get Free Dental Benefits:

Dental plans that offer free check-ups and cleanings usually use one of two methods to calculate your benefits: the calendar year or every 6 or 12 months. Find out what the rules are for your plan, and then pay attention—you know your dentist likes to send out reminder postcards and that Simplee will email you about unused benefits. Don’t ignore these!

Also keep in mind that some dental plans cover procedures up to a dollar maximum for the year. If you are close to reaching the max near the end of the year, but still need a root canal, you might want to wait until the next year for better coverage.

Spend down your FSA: Flexible Spending Accounts are use-it-or-lose it at the end of the year. Most turn over at the calendar year, but some plans use a fiscal or academic year. Make sure you know the date your plan renews, and spend down your account in time. If you find yourself with a large balance near the end of the year, you can always stock up on staples such as bandages or contact solution.

Do you have more tricks that you’ve used to squeeze the most out of your plan? Share with us!

 

What Is A Deductible? Four Things To Know About Your Plan

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So you have health insurance! Congratulations. But it doesn’t end here. Being insured doesn’t necessarily mean you are totally covered. Many people get surprised with bills for unexpected amounts or services they thought the plan would pay for. You know the premium you are paying each month. Do you know what it pays for?

Here are four things every person should understand about their health plan to keep from getting surprised.

1) The deductible: The deductible is usually the first thing to matter because it comes in to play the first time you use your health plan. It is the amount that you must pay out of your own pocket before your health plan begins to help you. High deductible plans mean you’ll have to pay more yourself before your plan kicks in.

First, you should know how much your deductible is because if you even need medical care, you will need to have that money set aside, ready to use. 

Second, you should be aware of different deductibles, if your plan has any. For example, you may have a separate deductible for in-network doctors than for out-of-network doctors. Or if you have fee-for-service or “Original” Medicare, there is one deductible for inpatient, hospital stays and another for outpatient care such as doctor visit or lab tests.

Your Simplee dashboard will tell you what your current deductible is and how far you are towards meeting it.  You can also click on the “Plans” tab to see details of what is covered and how.

2) Your provider network: HMO and PPO plans have physician networks and you will save a lot of money by staying in network. For HMOs, you always need a referral from your primary care physician to see a specialist. Otherwise, any care you get will not be covered. Private fee for service (PFFS) plans do not have provider networks; you can see anyone you want.

If you will be seeing a new physician (or if you have not been to see yours in a while), always double check that he or she belongs to your plan’s network. Even if they are listed, physicians can come and go, and the list may not be up to date. And don’t assume that doctors in the same office all take the same insurance. Sometimes doctors across the hall from one another may accept completely different insurance plans, even if they are in the same practice.

3) Prior authorization: Many plans require that services such as diagnostic imaging (MRIs, CT scans), surgeries or hospital stays be authorized before you receive them. Even procedures that seem essential to you or your doctor may still require approval. Your doctor’s office should be able to check by calling your health plan, and then request the authorization if needed. If they do not, call the plan yourself before getting the test or procedure done.

4) Out-of-pocket limit: The out-of-pocket limit (or out-of-pocket maximum) is the total amount the health plan can require you to pay on your own. It is usually an annual amount that starts again every January or when the plan renews. After you reach the limit, the plan covers everything, so a low out-of-pocket is a good thing. In fact, it’s good to avoid plans that do not have an out-of-pocket limit. Typically, deductibles, co-pays, and coinsurance are counted towards the limit (but premiums are not).

If you are ever in doubt, call your plan. If there is one thing to understand, it is that every health plan is different. Calling insurance companies is rarely fun, but neither is getting caught by the fine print. 

Why Should I Track My Medical Bills?

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Let’s say you decide to rent an apartment. You don’t know all the details in the lease and the landlord calls you on a regular basis to say there’s another expense…Would you please send a check (for some amount that sounds random)? Something just doesn’t feel right here…

Yet many of us are like that with our health care. It’s understandable—who can really decipher all the documents and sort through all the mail?

But it’s important to understand the basics of your health plan and to track your bills for several reasons. A little time could save you money later on. Here’s why.

Billing mistakes happen 

Anywhere from 30 to 40% of all medical bills contain errors of some type, according to health finance expert Stephen Parente at the University of Minnesota. Some claim the figure is even higher. These errors can include things like upcoding (attaching a more expensive billing code to the service you received so that you are charged for a more), charging more than once for the same service, or breaking a service down into separate parts and charging for each of those (like the gloves and tools used during a surgery). There are many tips for spotting these errors, but the place to start is tracking and reviewing each bill as it comes.  Check your claims detail in Simplee to see your provider charges explained in simple language.

Multiple bills

Medical bills are hardly straight-forward, so you can end up paying more than need to. It’s common to receive multiple pieces of mail related to a single medical service. The first is often an Explanation of Benefits (EoB). You know, the letter that looks like a bill but says on the top “This is not a bill.” An EoB is just a notification from your health plan that they received a bill from your doctor and explains what they plan to pay. Following an EoB, you can expect a bill from your doctor or provider. Sometimes, multiple bills are sent for the same item, so it can be confusing to determine whether you’ve paid one or not. A good way to track these is by the date of service. You may even want to keep track of the date of your medical appointments so that you can easily match these up.  And of course, you can also track things in the Simplee dashboard, which combines information from your provider and your insurance company in one place.

Tax breaks

 If your annual medical expenses exceed 7.5% of your adjusted gross income, you can deduct them from your taxes. This includes pretty much anything that is medically necessary, such as: insurance premiums (though only a portion), co-pays and coinsurance, prescription drugs, home care, acupuncture, mental health, dental treatment, glasses, and medical supplies.

Late fees

This is an obvious one. Late payments come with a late fee, so don’t put yourself there if you don’t need to. If you are unable to pay a bill right away, contact the hospital or provider. Many offer payment plans or will negotiate a discount.

Understand your spending

Finally, it’s good to know when you meet your plan’s deductible or out-of-pocket maximum. This information can help you see when you can expect your plan to pay, when you’re free from your coinsurance (whew!), how much you are spending, and how well your health plan is working for you.  Here is another area where Simplee is a big help– your deductible is tracked automatically, and you’ll get an email when it is met.

Tracking medical bills isn’t fun, but Simplee makes it a lot easier.  If you’ve been avoiding tracking your expenses, now is the time to jump in!

Picking a Health Plan: HMO vs PPO and Beyond

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Choosing a health plan for you or your family may seem daunting: HMOs, PPOs, high deductible plans, different premium tiers, etc. Like everything else we buy, we want to find the best. However, this mindset may set you up for disappointment, frustration, or even worse, choosing the wrong plan for your situation. Why? Because with health insurance, there is usually no “one best plan.” Rather, there are different plan options, and people with different needs and preferences. So your goal should be to find the best plan for you.

Before you choose a health insurance plan, think through your own preferences and focus on one question:

What is most important to YOU in your health plan?

1)    I want to stay with the same doctor.

If this is your biggest priority, you should call your doctor and ask which insurance plans they take. Be sure to ask about the specific type of plan, not just the insurance company’s name, because some doctors may for example, belong to an insurer’s PPO network, but not their HMO network. Most plans will give you a printed provider network or make one available online. However, these lists can change frequently, so it is best to check with your doctor for the most accurate information.

2)    I want to be able to see any specialist I want. 

These plans have become more and more rare, since most insurers have created provider networks, or lists of doctors who will be covered.  Plans that have no physician networks are called Private Fee for Service (PFFS or just FFS). You do not need a primary care physician or a referral to see a specialist. However, these plans are rarely offered outside of Medicare today.

The next closest choice is a PPO. These plans offer better coverage when you see a physician within their network (usually around 80%) and less coverage when you see an out-of-network physician (usually around 50%). So you can still go to any doctor, but just expect to pay more out of network.

HMOs are the most strict about what they will cover. They will only cover services from providers in their network and require a referral from your primary care physician for you to see a specialist.

3)    I don't like having to get a referral to see a specialist.

If this is important to you, a PPO will work better than an HMO. You do not need referrals, and if you stay with the plan’s provider network, you’ll be able to get the best coverage.  The main drawback is that HMOs are generally much more affordable insurance than PPOs—lower premiums, co-pays, and coinsurance.

4)    I am willing to pay more on the front end to avoid high costs on the back end.

Insurance is about risk—we pay a little bit in each month, so that it will repay us a bigger sum we need it. Some people prefer the security of knowing that anything that happens will be fully covered and are willing to pay a high premium for this. PPOs generally work better for this type.

5)    I would rather pay low premiums now, even if it means I would have to pay more if I get sick.

In contrast to those in #4 above, some people would rather pay less each month, and gamble that they won’t need to use their health plan. For this crowd, a plan with lower premiums and either a high deductible or high co-insurance would be more appropriate. HMOs or high deductible plans (whether they are PPOs or HMOs) generally work better for this type.

So really, the plan you pick is really driven by your personal preference.  Get clear on what is most important to you, and let these values guide your comparison of HMO vs PPO or high-deductible vs low-deductible. Most of the time, this is far more reliable than looking for the plan that is rated the best or that your trusted co-worker chose. Let go finding the best plan of all, just the find the best plan for your own needs.

The 10 minute lesson on navigating health care

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You already know that figuring out your health care coverage is one of those things you “should do… when you get the chance.”

If you don’t know where to start, take ten minutes now to get oriented.  After that, it’s easy. Once you know the lay of the land, getting that statement in the mail or comparing a new plan doesn’t have to raise your blood pressure.

1)    It’s all you.

We don’t mean to say that you’re on your own and no one will help you. We mean that the way we get health care is scattered: our insurance plan is always changing, we have multiple physicians, we get tests from all sorts of labs and clinics. Do you have it all organized in one place?  Because if you don’t, no one else will either!  Which means that you must be the one to bring it all together. You’ll be glad you did it.

  • Request a copy of your medical records from all your providers. You have a right to obtain these records.
  • Start a PHR (personal health record) to manage all your health information (or a family members’) in one centralized place.
  • Check your bills. Make sure you are getting billed for the correct services and keep track of each with a tool like Simplee. You may also receive one or more EoBs (Explanation of Benefits). These letters are not bills—EoBs are notices to let you know that a service has been billed to your insurance and how much will likely be covered.

2)    Know your vocabulary.

If you want to navigate the system, you need to know the terms.

  • Premium: The fixed amount you pay to your insurance company (or employer) every month.
  • Deductible: An amount you must reach in out-of-pocket costs before your insurance starts paying. The higher the deductible, the more you’ll have to pay yourself before your insurance helps you.
  • Co-pay:  A fixed amount you may have to pay for certain services each time you receive them.
  • Co-insurance: A percentage of the total cost you may have to pay for certain services.
  • Out-of-pocket maximum: The most your health insurance plan can require you to pay on deductibles, co-pays, or coinsurance in a year.  It does not include premiums. The out-of-pocket max is a protection for you, so the lower the better.
  • Claim: A request for your insurance plan to pay for health services. Usually, your provider will send the claim to your insurance company, the company will pay, and you will be billed for the remainder.
  • Negotiated Discount: The discount in reimbursement a provider agrees to accept from an insurance plan for each service they provide. Each insurance plan will have a different rate from another plan because of this discount.
  • Explanation of Benefits (EoB): A notice from your insurance company that a claim has been made for health services you received. An EoB is for your information only. It tells you that your insurance has been billed and how much you might expect to pay. A bill will usually soon follow an EoB.
  • In-Network Provider: A health provider (physician, hospital, therapist, home health agency) that has agreed to contract with a certain health plan. HMOs and PPOs use networks to keep health costs lower by only covering services from these providers.

Looking for more? Find a full health care glossary here.

3)    A cost is not just a cost.

Unlike most consumer goods you purchase, hospitals and physicians generally don’t have a set “sticker price” they charge for a health service. Instead, they negotiate different prices with each insurance plan they contract with. So you and your neighbor could get the exact same surgery done at the same place, and the hospital might put a different sticker on it, depending on what insurance you each have.

It’s difficult to know your costs beforehand, but there are a lot of things you can do to keep your costs low:

  • Stay in your network. Most health plans, such as HMOs and PPOs, will only cover services with providers who are in their network. Or, they may offer better coverage in the network, such as 80% in-network and 50% out-of-network. Check to make sure every doctor you see is in-network by calling their office. Also be aware of hidden out-of-network costs when you visit a hospital.
  • Be smart about your deductible. Know how much it is and when you have met it. If you meet your deductible towards the end of the year and still plan to get a lot of health services, try to schedule them within the year so that you do not need to meet the deductible again right away. And remember, there may be a separate deductible for in-network versus out-of-network providers or for prescription drugs. See here for more deductible tips.
  • Check if you need a pre-authorization. Some insurance plans require you to get authorization from them before a test or procedure. Your doctor’s office should be able to find out or you can call your health plan yourself.
  • Pay your bill on time. Just like any other bill, late fees add up.

Updated 9/29/2012