deductible

Posts Tagged: deductible

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5 Ways to Better Manage a High Deductible

So you’ve got a health plan with a (gulp) high deductible. That’s pretty common these days, so you’re not alone. In fact, a good chunk of the plans sold on the insurance exchanges are high deductible health plans (HDHPs).

High deductible plans are great because they cost less when it comes to the monthly premium. But you need to be prepared for when, or if, the bills start coming in.

Here are five things you can do now to make managing your deductible easier.

1)  Save save save

One of the worst things you can do if you have a HDHP is to go without savings sufficient to cover your deductible. This is why all HDHPs come paired with a Health Savings Account option. HSAs let you save money tax-free. If you’re going to save for medical expenses anyway, why not get a break on taxes too? If your health plan is through your employer, they may already be making contributions to your HSA. In addition, you might also consider putting in your  own monthly contribution, as most employers only contribute enough to fund the full deductible over the course of an entire year. If you want the savings to build up faster, you’ll need to kick in some funds yourself.

2) Know what’s excluded

Because of the Affordable Care Act, all health plans must provide preventive care free of cost. That means these services won’t count towards your deductible. It’s also common for plans to exclude certain co-pays or have a separate deductible for prescription drugs or for out-of-network providers. What you don’t want is to be in a situation where you thought you were fulfilling your deductible when you uhh, really weren’t.

3) Understand family deductibles

Do you have your spouse or children on your health plan? Each member of the family may have a separate deductible. To make things more confusing, there are no standard rules for how plans calculate these. Each individual member may just need to meet their deductible separately. Or it may be the case that one member of the family must meet the entire family deductible for coverage for everyone to start. Check with your health plan if you’re unsure.

4) Know the plan year

Most plans use the calendar year (January to January) for resetting deductibles. However some use a fiscal or academic year. Also keep in mind that the deductible year could be different from the rollover period for FSAs or HRAs for your plan.

5) Reevaluate if needed

HDHPs tend to work best for people who either don’t use a lot of health care or who, if they are sick, have a lot saved up. If you anticipate a lot of expenses year after year, you may find a lower deductible plan works better. Don’t be afraid to switch plans at your next opportunity if this feels like you–remember, you won’t lose any money left in your HSA if you choose to do this. HSA funds belong to you once they are in your account, regardless of if you change plans or employers.

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In with the New, Out with the Old: A Quick Comparison of 2013 & 2014’s Health Plan Costs

It’s time to say good-bye to 2013’s insurance and hello to 2014.

How did you fare in 2013? Some new research from eHealth looked at the average amount that Americans paid towards health insurance this last year. We tried to compare this to the plans available in the insurance exchanges for 2014.

According to eHealth, in 2013, the average individual premium was $197 for a basic plan, and $247 for a comprehensive plan.

And the average annual deductible for an individual was $3,319.

 

So can you expect to do better or worse in 2014?

There aren’t a lot of solid numbers on the 2014 plans being offered on the exchanges. But even if there were, there are a couple things to keep in mind: For one thing, the plans being sold on the exchanges are generally better than those that were sold up until now: they must meet some minimum standards by covering a set of basic Essential Health Benefits. In addition, many people will be eligible for a tax subsidy, which will help offset their premium (you can calculate your subsidy here).

Some research found that the average premium for a health exchange plan is $328. But that doesn’t really tell us much when it’s averaged across all plans, in all geographies, and for all ages.

For example, for a 27-year-old, that plan would be $163 for a basic Bronze plan or $240 for more comprehensive Silver plan.

And across all states, the average premium for a pretty comprehensive Silver plan ranges from $192 to $516.

When it comes to deductibles, the plans on the exchanges range from an average deductible of $4,300 (for a Bronze plan) to $2,500 (for a Silver plan). Or if you wanted to get the best of plans (Platinum) your deductible could be as low as $167.

 

Well, that’s a lot of numbers. So what’s the moral for 2014?

We’d probably sum it up to say that some people may end up with more costly insurance. But most of them will probably enjoy having better coverage or even getting a subsidy on their premium. And either way, you’re likely to be amongst the crowd that has a high-deductible plan – this seems like a trend that isn’t going away soon.

Let us know how your 2014 is shaping up – and how Simplee can help you manage your costs in the New Year!

 

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End of the Year Health Insurance Tips

What? It’s December already? It snuck up on us too. Here are a few things everyone should make sure to check out, check up on, or wrap up before the New Year starts.

New coverage

2014 marks the beginning of coverage via the health insurance exchanges. If you’re thinking about enrolling in a plan through the exchanges, December is the time. Even though the deadline to enroll has been extended to March 31, if you wait, your coverage won’t become effective until the month following when you enroll. For your coverage to begin in January, you’ll need to enroll and pay your first premium by December 15th.

Leftover annual benefits

Does your plan include benefits that expire at the end of the calendar year? This is common for preventive dental care and vision benefits. Make sure you’re not leaving anything out!

FSA or HRA balances

Do you have funds left in your FSA or HRA? You may lose any money that you have set aside but not yet spent. A new rule was just passed to allow employers or benefits administrators to roll over these funds, but it is only effective if your employer chooses to implement it (the rule is optional). Check if the rule applies to you, and if not, make sure you don’t have any unspent money left! HSAs are different – the funds in an HSA always roll over, year after year.

Post-deductible procedures

Have you met your deductible for 2013? Then the end of the year is a good time to schedule any elective procedures you might want to squeeze in before your deductible rolls over in January. You could save a lot in out-of-pocket costs by getting these services done while your plan is paying at its full benefit level (rather than early in the year when your deductible has not been met).

Onward to 2014!

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

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!

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

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.

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5 Mistakes To Avoid During Open Enrollment

 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.

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

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.

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

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!

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

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. 

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Why Should I Track My Medical Bills?

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!

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