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Work your high-deductible health plan

You're trading lower premiums for potentially huge out-of-pocket costs when you opt for a high-deductible plan. Here are 10 ways to work it to your best advantage.

By MSN Money Partner Sep 23, 2013 5:26PM

This post comes from Karen Datko at partner site Money Talks News. 

MSN Money PartnerAs 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.

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% 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%) of covered workers were enrolled in a plan with a deductible of a $1,000 or more compared to 10% in 2006, and 14% were enrolled in a plan with a deductible of $2,000 or more compared to 3% 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% 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. Money Talks News founder Stacy Johnson 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% 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.

Surgeon with paperwork (© Creatas Images/JupiterImages Corporation)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?

More on Money Talks News:

Sep 24, 2013 3:21PM
One thing to mention when comparing the High deductible plans vs other plans are the premiums you pay.  There are pros to the high deductible plans too.  I had options through my employer for traditional insurance with copays and no deductibles and the high deductible plan.  I ran the numbers every which way (healthy, catastrophe and everything in between).  I determined that the high deductible plan as right for me and my son.  I was paying $300/month for regular insurance before and it went to about $30/month with the high ded plan.  I put what I was saving per month into a HSA account which you can roll over year after year (unlike the FSA).  It covered annual exams which is all we usually use.  I still got a discount on my prescriptions as opposed to having no insurance.  Even seeing my specialist once a year at $150/visit was still less than paying $300/month.  I saved thousands.  The next year I was able to drop down how much I set aside monthly for the HSA because the balance was growing.  Even if we got really sick, there is still a max you pay.  Sure, I would have to cover the deductible but what I was saving in premiums made up for it.  Everyone's situation is unique but you should run the numbers both ways and see what works best for you.  High deductible plans are not really all that bad.
Sep 24, 2013 5:36PM

"But I find myself very conscious of every health care dollar I spend"  That is the main purpose of these plans.  Sure, the employer gets savings from the higher deductibles.  The bigger long-term savings is getting the medical consumer involved and cognizant of the costs of healthcare.  Many employers link these plans with the HSA and contribute money to the HSA.


I love my high-deductible plan & HSA. 

Oct 3, 2013 1:20AM
A doctor is not allowed to give a discount on a deductible.   A patient should want to pay the doctor  at the time of service everything that is owed just like he pays his car repair bill.   It is dishonorable to try to get a payment plan.  Would you do that when you pay your grocery bill,  your gas bill or your taxes?    Your doctor is taking care of the most Important part of your life:   your health.  You should be very grateful that he/she spent enormous time studying medicine to make you healthier!!!!! 
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