It’s time for health care consumers with health savings accounts (HSA) — which are tied to high deductible health care plans — to undertake a little financial planning so they can budget their health care dollars wisely and stay in good health.
HSAs are tax-free saving accounts designed to help people pay for future health care expenses. Enrollment in high-deductible HSA plans is estimated between 20 million and 22 million policyholders and their dependents, according to numbers published in 2016 by the Employee Benefit Research institute.
Have you met your deductible for the year?
One of the most important pieces of information that will guide how you meter out your HSA dollars this late in the year and over the next year is whether you’ve met your individual or family deductible, said Jolene Calla, vice president of health care, finance and insurance for The Hospital and Health System Association of Pennsylvania.
With high-deductible HSA health plans, the financial benefits of insurance coverage kick in full force once your deductible is met. Until then, you are picking up the tab for health care services other than preventative services, like routine checkups or vaccinations. (These are provided to you at no cost as part of your coverage.)
Once the deductible is met, you can take maximum advantage of your coverage since your insurance company starts paying for most of your health care. Typically, after meeting their deductibles, patients pay 20 percent and the insurance company pays 80 percent, Calla said.
“Some of the things you could focus on are elective procedures like eye exams, dental exams or other medical procedures that you have control over the scheduling,” Calla said. “It may be hard to get an appointment before the end of the year, but ask to be put on a cancellation list if you have that flexibility.”
No? Start planning for next year
For those who have not met their deductible near the end of the calendar year, it’s time to focus on planning for next year, Calla said.
The balance in an HSA, unlike a Flexible Spending Account (FSA), rolls over to the next year, so you could plan to save for a surgery or other expense, like a child’s braces.
Some elective medical care that could be delayed might include a knee, hip, or carpal tunnel surgery that allow you and your doctor to decide the best time for surgery.
“These are procedures you definitely need to have taken care of, but if you were diagnosed with one of these today, it might not be necessary to squeeze it in before the end of the year,” Calla explained.
Calla recommends making appointments early in the year for your other health care needs. Chipping away at the deductible early will allow insurance benefits to cover a lion’s share of a surgery later in the year, for instance.
“This allows you to better manage your deductible and puts you in a time frame that allows you to get the most out of your benefits,” Calla said.
Keep in mind that it’s also important to schedule your preventive care needs, like immunizations and disease screenings, but since the advent of the Affordable Care Act, patients receiving these services generally aren’t charged and they don’t count toward a deductible.
Importantly, the deductible status is never reason to wait for urgent or emergency medical care, Calla reminded.
“We’re not talking about if you have chest pain, you have to be a wise spender,” she said. “These truly must be non-life-threatening and elective items your doctor doesn’t want you to address in the next two weeks.”