Health Topic of the Month March 2017

Your Top 3 Healthcare Finance Questions Answered

For the moment, forget about all the uncertainty around the Affordable Care Act and what may or may not be happening with that. Financing your health is confusing enough without all that drama. That’s why we want to explain to you the different options you have to finance your healthcare costs, no matter what happens in the future. Here are the top three kinds of financing options and what they mean.

Deductible Versus Copay

Some people believe it will be just one or the other, but that’s not necessarily true. You can have a deductible and then still have co-pays once you meet your deductible. Let’s look at the difference:

  • DeductibleAccording to a CBS report, the number of people with deductibles for their employer-sponsored healthcare plans has risen to 67% since 2010. If you have a deductible plan, you must spend a certain amount before your insurance steps in to help at all. Most plans have a wellness visit they will cover, but otherwise, you’re on your own for the entire bill until you meet your deductible. Be sure you know if you have a deductible on your plan and what your deductible amount is.
  • Copay – If you have a copay, then you will still pay a certain percentage for each healthcare visit. This is figured differently for each insurance plan, so check your plan.

FSA vs. HSA

Nothing like referring to important finances by acronyms to help confuse you, right? According to U.S. News and World Report, both of these accounts are designed to help you pay for healthcare costs with pre-tax dollars (in other words, the money is taken out of your pay before taxes are applied, thus reducing your taxable income.) Here’s what you need to know (as an individual):

FSA – Flexible Spending Account

  • This account allows you to use up to $2,550 pretax dollars on medical expenses. You can elect to have the money withheld from your paycheck.
  • You must spend the full amount before the year is over, so make sure you do your math to estimate how much you should save. Otherwise, if you save too much, you forfeit it.
  • Once you decide how much you’re saving in your FSA, you can’t modify it without a life-changing event.
  • You can use the money that you elected to save before you have it in your account.
  • This is only available if your employer offers it.

Health Savings Account

  • This option allows you to save up to $3,350 a year for medical expenses.
  • If you are over the age of 55 you can contribute up to $1,000 extra a year in catch up contributions.
  • You must have a deductible of no less than $1,300.
  • Bonus! The money you don’t use can roll over year-to-year.
  • You can change the amount you are saving at any time.
  • You can only withdraw the amount that is in there.

In most cases, you can’t have both. You must choose an option.

Explanation of Benefits.

Photo courtesy: http://www.myhealthmyvoice.com

You know that statement you get in the mail that says “This is not a bill.” Well, if it’s not a bill, why do they send it to us looking like one?

“Good question,” says Marte Meyer, 9Health Fair Vice President. “With your Explanation of Benefits, they want to make sure you understand what they’re paying and what you’re expected to pay.”

Meyer says to look for the line that says “Patient Responsibility.” Most likely, the next time you do receive an actual bill, that will be the amount you’ll end up paying.

When you’re looking over your explanation of benefits, Meyer also suggests you call your insurance if there’s something that doesn’t make sense to you.

The financial world of healthcare can be hard to understand, but it’s worth it for you to figure it out. This will allow you to better anticipate costs and find ways to keep money in your own pockets rather someone else’s!

There are more tools out there that aim to help consumers estimate their healthcare costs. Total cost estimators are tools designed to help ease the confusion many of us have when it comes to shopping for insurance through the affordable care act.

Another great way to save money on healthcare costs is to attend a 9Health Fair. On top of the many affordable screenings offered, there are many free ones too. You can take this information to your health care provider to save time and money on your next visit. You can also have your medical questions answered, so if there’s something you’d like to learn more about, a 9Health Fair near you is a great place to learn more!