It’s not hard today to strike up a conversation about navigating the health insurance maze and juggling your medical dollars. It’s a large part of what we talk about here every day at Healthy Me PA. Given that today’s medical and insurance systems put much more decision-making into consumers’ hands, it’s important to be empowered health care consumers. At Healthy Me PA, we work with you to understand the tools you have and the decisions you have the opportunity to make.
While you certainly can’t plan for a true medical emergency, you can be knowledgeable about what your health insurance plan covers and how you pay for it. We have found that many people are confused over insurance terms such as deductibles, premiums, and copays, and aren’t certain about the amounts they may have to pay for care.
A payment glossary
The premium is the amount you pay monthly or annually to have health insurance. It’s like your car insurance premium. If you don’t pay it, you don’t have coverage. The deductible, on the other hand, is the annual fixed amount that you must pay for covered health care services you use before your insurance plan starts to pay.
For example, if your deductible is $1,000, you must pay the full amount for all of your covered medical services during a year until that spending hits $1,000. After that, your insurance company starts paying for a part of your health care. Many policies require you to continue to pay something toward the health care services you use—like a set copay for office visits or 20 percent of the bill—even after you meet your deductible.
It’s important to note that the Affordable Care Act requires most health plans to cover a list of preventive services, such as yearly physicals and cholesterol screening, at no cost to you, even if you haven’t met your deductible.
It’s wise to follow the progress of your deductible. If you are facing an expensive surgery or procedure, such as a knee replacement, and can plan for it, you may want to wait until you’re closer to meeting your deductible so your overall costs would be lower.
Managing your medical dollars
It’s alphabet soup when it comes to the three types of accounts that you might use to pay for medical care—health savings account (HSA), health reimbursement arrangement (HRA), and flexible spending account (FSA). Each has slightly different features and works with your health insurance coverage in different ways.
An HSA helps people enrolled in a high-deductible health plan save for qualifying medical expenses such as copays and deductibles. The money in your account is yours; it rolls over year after year. If you know you have an upcoming large expense—like that knee replacement—you can save for it in your HSA while enjoying tax advantages that come with HSAs.
An HRA is a medical savings account funded entirely by your employer on your behalf to pay for medical expenses. Employees cannot contribute. Eligible medical expenses can be paid for with a payment card or reimbursed to you after submitting receipts.
An FSA is similar to an HRA except you regularly contribute money to your savings account. Unlike an HSA, it is a use-it-or-lose-it account. So if you find you overbudgeted for your health needs near the end of the year, check your plan for what’s eligible—everything from contact lens solution to many over-the-counter medications is included.
Who’s in and who’s out?
One of the smartest ways you can save money is to know which doctors and other providers participate in your insurance plan. If you see ones who do—in-network providers—they’ve negotiated a contracted rate with your health insurance company. An out-of-network provider has no contract, and you probably will pay more in that instance. Every policy is different and some insurers won’t pay at all for out-of-network care, which could be quite costly.
Clearly, one of the best pieces of advice to follow is to read your health insurance plan so you know what is covered and what isn’t.
Members of the Healthy Me PA community consistently look for tools that help us make our best health care decisions. It could be encouraging the Legislature to approve a telemedicine bill that lets us get our health care from the comfort of our own home through computers or cellphones, saving us all time and money. Or it could be experts helping you decide if you need an ER, an acute care center, or just a regular office visit. The Healthy Me PA community can help you be a smarter health care consumer, and that will help us improve the health of all Pennsylvanians.