Today, we’re going to continue discussing high deductible health plans. We’re mainly focusing on a deeper look into flexible spending accounts and how they work, as well as how you’ll need to plan your health care maintenance if you opt for a health insurance plan with a high deductible.
Exploring Flexible Spending Accounts
Just to recap—we previously explored the healthy savings accounts, also called flexible spending accounts, associated with high deductible health plans. We learned that these accounts allow individuals to save pre-tax dollars from their paychecks to put toward their out-of-pocket healthcare expenses. This option saves taxpayers who have high deductible health insurance plans a decent chunk of change, because depending on their tax bracket, they could be saving anywhere from 10-35% of their healthcare costs!
Generally speaking, these healthy savings accounts, or flexible spending accounts, are a use-it-or-lose-it type of deal. If you don’t spend the money you’ve put into your account by the end of the year, your company gets to reclaim it. Unfortunately, the rules for these plans have been reformed over the last few years, and they’ve made it even more difficult for people to get the most out of their flexible spending accounts. For example, you can’t buy a year’s supply of medication on the last day of the year, hoping to wipe out your account. However, there are some big-ticket items you can purchase on the last day of the year, such as glasses or costly dental procedures.
One benefit to use-it-or-lose-it funds is that for most of these types of flexible spending accounts, you could spend all of the money on the first day that your plan goes into effect, and then get fired the next day, and not owe anything for the money you’ve spent. Additionally, you wouldn’t have to continue paying into your healthcare plan! Bear in mind, however, that if you get fired and there is still money in your flexible spending account, there’s a good chance you’ll never see it again.
Not all of these flexible savings accounts are use-it-or-lose-it, though, especially with the new provisions of the Affordable Care Act. Many employers are able to contribute to your health savings plan, and can also decide to roll over the balance of your account into the new year.
Be a Smart Shopper
It’s important to remember that because you’re paying a lot of your healthcare expenses out-of-pocket with a high deductible insurance policy, you need to be smart when shopping for healthcare services. Another provision of the Affordable Care Act is that many screening tests, such as colonoscopies, will be available for participants of high deductible insurance plans free-of-charge. However, if your doctor finds something in that screening that needs to be explored further, the costs of follow-up procedures will be considered out-of-pocket charges.
Another important thing to consider about having a high deductible insurance plan is the fact that accidents can, and often do, happen. Accidents for people with high deductible insurance policies can be especially expensive, and even more so if you require emergency care from an out-of-network provider. Out-of-network doctors and hospitals cost an even higher amount than in-network providers, and if you’re rushed to a hospital that isn’t in your network, you’ll be hit with a pretty high bill. Experts advise people with high deductible insurance plans to challenge doctors’ fees that seem out-of-line, because many doctors are actually receptive to these conversations.
There are many services set in place to help consumers make educated decisions when it comes to choosing a health insurance policy. Change Healthcare, for example, offers consumers videos and games to help them learn different plan options and to make a decision about which plan is right for them. Additionally, if you’re interested in specific healthcare procedures, FAIR Health gives consumers the opportunity to look them up to see the best values available.
Making a Decision
If you’re young, healthy, and broke, your best option is probably a high deductible insurance policy, as long as you don’t frequently partake in super risky activities, like base jumping. These policies are also ideal for consumers who are older and healthy with a good amount of savings, because the potentially heavy-hit won’t affect them as much if they have the money to spend, and they won’t have to shell out high premiums.
However, if you are more interested in making a constant, regular payment, and the possibility of high costs gives you crazy anxiety, you’re probably better off sticking with a traditional heath care plan. This is especially true for people who have ongoing health issues and foresee regular healthcare maintenance being a necessity.