High Deductible Health Plan questions

[FiguringItOut]

I've never had HDHP before.  My plan was effective starting August 1st, so none of my deductible has been met for this year. 

I have a visit to the doctor this Saturday.  I called the office and the cost would be $125 if I tell them I have no insurance. 

However, they gave me two codes that the doctor charged for my last visit and speaking with my insurance I got an estimate of $125 for one code and $200 for the second code.  Total $325.  They said it was an estimate and the actual may differ if my doc has some other negotiated price with insurance.  But I won't be able to find this out unless I tell them that I have insurance coverage and then I'll have no choice but to go through insurance and pay whatever final cost will be.

I am thinking that it may make more sense for me to pay this completely out of pocket and use the insurance for the prescriptions.  I'll double check, but I think the insurance cost of prescription is lower than no insurance.  I will not meet my deductible ($1,500 per person, $3,000 per family) before end of December no matter what I do, so I don't see a reason to pay more now in hopes of covering deductible later in the year. Is this correct?

On the similar note, in 2016, how do I decide when it makes more sense to go through insurance and when it is better to just pay completely out of pocket?  I can't predict if my family will cover the entire $3,000 deductible in 2016, and if yes, how long into the year it will take.  I don't know what costs to expect for doctors visits, as I've always had standard health plans with co-pay and co-insurance.  Plus, I will be changing most of my doctors due to move, so I can't call and ask what codes they will be charging.

I'm trying to navigate this new health plan, but it seems to be a lot more confusing than standard plan.

Also, I am planing to push most of visits to 2016 so that if I use insurance they will count towards deductible.  I feel like everything I pay now, in 2015 will be almost a 'waste' with regards to having insurance actually cover my medical costs.  This particular visit I can't push that far off.  In fact, I will have to have another one in November.  Both will come with prescriptions.

And lastly, since my family deductible is $3,000, but max out of pocket is $5,000, should I just always have $5,000 designated for the annual health costs.  I am contributing to HSA, but don't want to touch it if I don't have to.  I have $3,000 right now designated for medical.  Should I add another $2,000 to it?

[geekette]

Maybe it's where I live or the negotiating power of BCBS, but I've never found the cash price to be less than the negotiated price. 

The doctor's office usually can't tell you what you'll pay with insurance because they have contracts with multiple plans and multiple insurance companies.  With our current system, it's rare to know how much you'll pay for something until after the fact (although I had to prepay a CT scan last year, cash price $1100, insurance rate, $540).

If you pay cash next year it won't go toward your deductible at all, so I don't see the point.

[FiguringItOut]

Maybe it's where I live or the negotiating power of BCBS, but I've never found the cash price to be less than the negotiated price. 

The doctor's office usually can't tell you what you'll pay with insurance because they have contracts with multiple plans and multiple insurance companies.  With our current system, it's rare to know how much you'll pay for something until after the fact (although I had to prepay a CT scan last year, cash price $1100, insurance rate, $540).

If you pay cash next year it won't go toward your deductible at all, so I don't see the point.

That's what I would've expected, but I'm not sure how to reconcile quoted price from doc's office of $125 cash vs insurance estimate of $325. 

I understand that next year cash payments will not towards deductible.  I am wondering mostly about this year and the next 5 months.  Should I pay $125 or take a gamble and use insurance?

[Mississippi Mudstache]

I will not meet my deductible ($1,500 per person, $3,000 per family) before end of December no matter what I do, so I don't see a reason to pay more now in hopes of covering deductible later in the year. Is this correct?

Um, no, that's not correct. If your deductible is $1500 per person, it will only take a single ER visit to push you over. How can you possibly know what medical treatment you or a family member may require over the next 5 months? Really, I think you're overthinking it. It's doubtful that the cash payment will be less than your insurance's negotiated rate. But for $125, if you want to just pay cash, no big deal.

[FiguringItOut]

I will not meet my deductible ($1,500 per person, $3,000 per family) before end of December no matter what I do, so I don't see a reason to pay more now in hopes of covering deductible later in the year. Is this correct?

Um, no, that's not correct. If your deductible is $1500 per person, it will only take a single ER visit to push you over. How can you possibly know what medical treatment you or a family member may require over the next 5 months? Really, I think you're overthinking it. It's doubtful that the cash payment will be less than your insurance's negotiated rate. But for $125, if you want to just pay cash, no big deal.

That's true.  I was really only thinking about regular doc visits.  Not emergencies and such.

[FinancialIndependent]

Welcome to the world of high-deductible health plans! 

Healthcare billing and collections can be very confusing.  I work in the industry for a living (I own a healthcare practice management consulting firm), so I'm VERY familiar with your situation. 

Generally speaking, you are almost ALWAYS better off allowing the doctor's office to file your insurance - regardless of where you are in meeting your deductible.  This is because doctors' offices generally must charge significantly over what their "contracted rate" or the "allowed amount" is with your insurer.  There are a couple of reasons for this, and while it doesn't always make sense to the consumer, it is the industry standard.  I will discuss that another time (in fact, I'm creating a blog to help consumers navigate the health system while keeping their costs low). 

It sounds like the cost that they gave you for those two codes is either their full-billed charge for those codes, or a special "self-pay rate" for those codes, which is oftentimes still higher than the rate that your provider has negotiated with your insurance company.  I would need to know the specific codes for sure to tell you if they are on-par with national standards for those codes, but they sound a little high for a general office visit.  If that is the case, then you will be entitled to a lower rate than what you were quoted if your provider files the claim with your insurance company.  That is certainly one benefit of filing this visit toward your insurance.

The second benefit is, of course, allowing the charges to go toward your deductible.  Even though we are late in the year and you do not ANTICIPATE meeting your deductible for 2015, you are still better off having ALL OF YOUR ELIGIBLE HEALTHCARE EXPENSES go toward your deductible.  Suppose you were fall and break your leg in December, requiring a trip to the hospital.  The hospital visit alone would likely exceed your deductible.  If you had already met part of your deductible earlier in the year, then your insurance company would pay more toward future healthcare costs in the event something unexpected occurs.  My last trip to the ER was COMPLETELY unexpected as I accidentally sliced my hand open while doing dishes.  Fortunately, I was already closer to meeting my deducible from a doctor's office visit earlier in the year which decreased my out-of-pocket expense for my ER visit. 

To answer your question about adding money to your HSA, I would say that it depends on where you are in your FI journey (are you debt free and investing or still getting out of debt?).  If you are able to max out your HSA every year, I would encourage you to do so.  I think it is a great idea that you don't plan to touch your HSA (I don't often dip into mine).  I'm sure you've read elsewhere that you can max out your HSA every year, and you can invest that money and allow it to grow tax-free until you need it.  I am only 38 now, but I am planning on using my HSA to cover any future long-term healthcare costs (e.g. home healthcare, nursing home, etc.) when I grow older and need more expensive care. 

It is also important to know that you do not have to pay for your healthcare costs (e.g. deductibles, coinsurance and other out-of-pocket healthcare costs) from your HSA.  If you want to use the pre-tax dollars in your HSA you are certainly welcome to do so (most people do), but you can also pay those expenses with non-HSA funds and allow your HSA to grow as an investment without touching it.  I believe this is a very wise idea. 

In conclusion, I would allow your doctor to file the claim and pay the negotiated rate with the insurance company instead of the self-pay rate.  If you would like help in figuring out about how much your insurance will allow on those two codes, feel free to contact me privately and I will be happy to research it for you and give you a rough estimate of what your insurance will likely allow. 

Good luck! 

[FiguringItOut]

WOW!  Thank you for the information!  This is very helpful.  I am very likely overthinking it, but it is due to complete unfamiliarity with the plan.

Welcome to the world of high-deductible health plans! 

Healthcare billing and collections can be very confusing.  I work in the industry for a living (I own a healthcare practice management consulting firm), so I'm VERY familiar with your situation. 

Generally speaking, you are almost ALWAYS better off allowing the doctor's office to file your insurance - regardless of where you are in meeting your deductible.  This is because doctors' offices generally must charge significantly over what their "contracted rate" or the "allowed amount" is with your insurer.  There are a couple of reasons for this, and while it doesn't always make sense to the consumer, it is the industry standard.  I will discuss that another time (in fact, I'm creating a blog to help consumers navigate the health system while keeping their costs low). 

It sounds like the cost that they gave you for those two codes is either their full-billed charge for those codes, or a special "self-pay rate" for those codes, which is oftentimes still higher than the rate that your provider has negotiated with your insurance company.  I would need to know the specific codes for sure to tell you if they are on-par with national standards for those codes, but they sound a little high for a general office visit. 

This is not a general office visit.  It's a specialist, though these are recuring visits every 3 month.  I used to go every month, but when I was left with no insurance in May, he agreed to give me 3 months of refills and that I can see him every three months.  The medication I'm taking needs to be monitored, so I know I can't stretch it to more then every three months.

It is possible though that I was quoted full-billed rates.  Unfortunately, it seems there is no way to get better information regarding this as the whole medical billing industry seem to be shrouded in secrecy.

If that is the case, then you will be entitled to a lower rate than what you were quoted if your provider files the claim with your insurance company.  That is certainly one benefit of filing this visit toward your insurance.

The second benefit is, of course, allowing the charges to go toward your deductible.  Even though we are late in the year and you do not ANTICIPATE meeting your deductible for 2015, you are still better off having ALL OF YOUR ELIGIBLE HEALTHCARE EXPENSES go toward your deductible.  Suppose you were fall and break your leg in December, requiring a trip to the hospital.  The hospital visit alone would likely exceed your deductible.  If you had already met part of your deductible earlier in the year, then your insurance company would pay more toward future healthcare costs in the event something unexpected occurs.  My last trip to the ER was COMPLETELY unexpected as I accidentally sliced my hand open while doing dishes.  Fortunately, I was already closer to meeting my deducible from a doctor's office visit earlier in the year which decreased my out-of-pocket expense for my ER visit. 

To answer your question about adding money to your HSA, I would say that it depends on where you are in your FI journey (are you debt free and investing or still getting out of debt?).  If you are able to max out your HSA every year, I would encourage you to do so.  I think it is a great idea that you don't plan to touch your HSA (I don't often dip into mine).  I'm sure you've read elsewhere that you can max out your HSA every year, and you can invest that money and allow it to grow tax-free until you need it.  I am only 38 now, but I am planning on using my HSA to cover any future long-term healthcare costs (e.g. home healthcare, nursing home, etc.) when I grow older and need more expensive care. 

I have one student loan ($14K @3.5%) and a positive net worth, though not much of it.  Like I said, I have $3K in cash right now designated for medical expenses and I also have few hundred in my budget right now that I plan on using for this visit and scripts.  No plans to used HSA right now at all.

It is also important to know that you do not have to pay for your healthcare costs (e.g. deductibles, coinsurance and other out-of-pocket healthcare costs) from your HSA.  If you want to use the pre-tax dollars in your HSA you are certainly welcome to do so (most people do), but you can also pay those expenses with non-HSA funds and allow your HSA to grow as an investment without touching it.  I believe this is a very wise idea. 

In conclusion, I would allow your doctor to file the claim and pay the negotiated rate with the insurance company instead of the self-pay rate.  If you would like help in figuring out about how much your insurance will allow on those two codes, feel free to contact me privately and I will be happy to research it for you and give you a rough estimate of what your insurance will likely allow. 

Good luck!

[forummm]

Generally the insurance negotiated price is better than the cash price. And if you don't have it run through your insurance, it doesn't count towards your deductible. So if something expensive happened later this year, you'd be out the amount of the insurance negotiated price for this care you're seeking now.

[FiguringItOut]

Good morning.
I wanted to post a quick update after I used my HDHP for the first time and was asking questions about it.

So I went to my doctor and used my insurance.  Without insurance the visit would've been $125.  With the insurance (deductible is not covered yet) it is $126.  The two medical codes that my doctor charges for my visits were $125 and $200 as was quoted to me by the insurance.  So I am still a bit confused how this works.  I suppose $125 and $200 are the max that insurance deems reasonable.  And then there are negotiated rates.  This is all new territory for me.

And now on to the Russian medication roulette. I have two prescriptions.  One costs $19.50 per month at the RiteAid and $85 for 3 months as the mail-in pharmacy.  Why is mail-in more expensive is a mystery to me.  The second medication costs $91 per month at the RiteAid and $58 for three months at the mail-in pharmacy.  So I am getting first one from RiteAid ordering second one from mail-in place. 

I feel like there is a lot more work associated with HDHP than standard medical plan.  I'm sure I will eventually figure out how to navigate it better. 

On the bright side, I got my first deposit into my HSA account last week.  It was nice to see $360 deposited there with only $277 coming from me.  The rest is employer contribution.  I also have an option to invest HSA into Vanguard funds.  They have options for Oppenheimer funds, American funds, Vanguard funds and few others, but Vanguard seem to have better expense ratio than others.  I just have to wait until I have at least $1,000 in my HSA account before I can invest.  Still need to figure out what happens if I invest the balance and then need to use HSA to cover medical costs. What fees will be involved if investments have to be sold, etc.  But that will not be necessary for a while, hopefully not until after January.

All in all not bad for now.

[Gin1984]

I found Costco pharmacy to be cheaper, even though it is not in network (and therefore part of my deductible) than any other store.  Even with the insurance negotiated rate my meds were about $100/3 months everywhere.  Costco was $21 and change if you are a member and $25 and change if not. 

[abhe8]

Try the site goodrx dot com. It's awesome for comparing rx prices.