Author Topic: Did I Overspend on This Baby  (Read 7297 times)

jbmatth

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Did I Overspend on This Baby
« on: January 10, 2014, 09:52:55 AM »
I would like to say WOO HOO!!!!  My wife and I just had our second child, another little girl join our family on Jan. 2nd.  Of course we knew this was coming and had planned for it, but I might have missed out.  Well I know I missed out on the 2013 tax break by a measly 34 hours, Grrrrrr.  However, the bigger miss was on our insurance, we have a high deductible plan with HSA, when the planning began we would have had about $5,000 in the account when she was born, but an ER visit, and a few early maternity bills hit last year and we only have about $1,200 in the account right now.  The deductible is $2,400 with a max out of pocket of $8,000.  I haven't gotten all of the bills in yet, but from what I'm finding online the hospital will charge insurance just over $30,000 for the C-Section and other cost for the 3 days we were in for.  It looks like we will be out the maximum of $8,000, we do have the money in a bank account that we'd started for this and for a home down payment we started last year so it isn't a worry on how we will pay for it, but darn $8,000!  Well the idea came to me that I could have signed my wife up for a secondary insurance with a lower deductible (to go into effect Jan. 1st), then cancel the plan a month or two later.  I didn't feel right about this so I decided not to do it even if it would save us a ton of money.  Does anyone else have any advise on what we could have done, or could do to help lower this bill?  I only started reading this site after we were already pregnant and didn't think to ask it before now, but let me have it face punches, groin kicks and all.
JB

FloridaStache

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Re: Did I Overspend on This Baby
« Reply #1 on: January 10, 2014, 10:14:18 AM »
First of all, congrats on your new arrival!  It's all good- no face punches from me. I know the feeling, our son was born at 9:30AM on 1/1/10- missed 2009 by a few hours.  I'm not an expert in this area, but it looks like you are out of luck from an insurance perspective now that the baby is here.  I don't think insurance is going to let you sign up for after-the-fact coverage, but I could be wrong.  Fortunately you have the $8,000 cap on your HDP.  In hindsight, I would not have opted for an HDP if you knew that you would become pregnant again, but what difference does it make now?  No sense beating yourself up over the past!  Maybe keep this in mind if you decide to add another child to your family in the future.

In the long run, what is most important is that (it seems like) mom and baby are doing well, and you have the money to cover it, so you are good.  You may need to defer the home down payment for a few more months, but over the long term, so what? 

jbmatth

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Re: Did I Overspend on This Baby
« Reply #2 on: January 10, 2014, 10:24:54 AM »
I should have mentioned yes mamma and baby are doing great and recovery well.  I did have another option for a different insurance plan through work, but after all costs were considered the other plan would have cost us more for the birth.  Higher monthly payments by almost 5x, lower deductible, but still an $8,000 cap that would have (will have?) been hit either way.  I didn't know if others have had much luck negotiating lower payments with the hospital or other tips.

ZiziPB

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Re: Did I Overspend on This Baby
« Reply #3 on: January 10, 2014, 10:44:22 AM »
How much does insurance pay after you reach your deductible?  Mine pays 90% and if yours does too, then you would be covering the first 2,400 out of pocket, and then 10% of $27,600, which would be $2,760.  So that is around $5,100, not $8,000.  That would leave you covering 10% of each future medical bill in 2014 until you reach $8,000 through your co-pays.

ZiziPB

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Re: Did I Overspend on This Baby
« Reply #4 on: January 10, 2014, 10:50:31 AM »
And yes, you have unfortunately run into one of the pitfalls of a HDHP with HSA: incurring a significant medical expense before you have sufficient funds accumulated in your HSA to pay for it.

Can you pay the bill out of pocket and then just reimburse yourself through the rest of the year from your contributions?  How much are you planning on contributing to the HSA in 2014?

And, BTW, congratulations on the new baby!

jbmatth

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Re: Did I Overspend on This Baby
« Reply #5 on: January 10, 2014, 11:28:01 AM »
I will have to pay 20% after deductible is met.  I have only gotten two of the bills so far, and they are not actually billed just showing up on my claims on the insurance website so far.  I know there are more to come, one from her Dr. and another from the pediatrician and probably others.  The bills I expect to receive are based off of our other daughter that was born in 2011 of course adjusted up.  I do not think I can pay myself back from the HSA account, but will be contributing $4,000 to it this year.  Then will be decreasing the deposited amount some until I can have a safe cushion in there for something unexpected down the road. 
JB

ZiziPB

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Re: Did I Overspend on This Baby
« Reply #6 on: January 10, 2014, 11:50:29 AM »
I'm not sure I understand your comment about "decreasing the deposited amount"? 

It sounds like with a 20% co-pay, you will in fact reach your out of pocket max.  The good news is, all your medical costs for the rest of the year will be covered 100%! 

Can you change your HSA contributions so that you contribute the max allowed for this year?  The birth of a child is an event that would allow you to change your benefit elections.  If you can contribute $6,550 this year, at least you can cover the entire $8,000 with before-tax money.  And yes, you can definitely pay yourself back from the HSA.  Just keep all the bills and receipts for your payments to the medical providers so that you have something to show to the IRS.

jbmatth

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Re: Did I Overspend on This Baby
« Reply #7 on: January 10, 2014, 01:06:38 PM »
Izeve, Thank you for letting me know about being able to pay myself back out of the HSA, I didn't think that would be possible, but will dig into it more.  By "decreasing the deposited amount" I am planning to not contribute $4,000 a year maybe just $1,000 or however much we used the prior year to keep the HSA balance around $8-10k once I reach that amount.  I could have changed my HSA contribution yesterday, but have already filed the paperwork electronically to keep it the same.  I didn't think I could repay myself when I did this yesterday, this site brings about so much good information I should consult ya'll before I make any decision like this in the future. 

Rural

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Re: Did I Overspend on This Baby
« Reply #8 on: January 10, 2014, 01:09:53 PM »
Izeve, Thank you for letting me know about being able to pay myself back out of the HSA, I didn't think that would be possible, but will dig into it more.  By "decreasing the deposited amount" I am planning to not contribute $4,000 a year maybe just $1,000 or however much we used the prior year to keep the HSA balance around $8-10k once I reach that amount.  I could have changed my HSA contribution yesterday, but have already filed the paperwork electronically to keep it the same.  I didn't think I could repay myself when I did this yesterday, this site brings about so much good information I should consult ya'll before I make any decision like this in the future.

I can change my HSA contributions at any time. It's not a change in coverage, at least not as far as my employer is concerned. It's just a change in deductions, which is different. Perhaps that's the same for you?

jbmatth

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Re: Did I Overspend on This Baby
« Reply #9 on: January 10, 2014, 01:33:03 PM »
Rural and Izeve, I just checked into it and I can not change my HSA contribution other than during open enrollment or if there is a life event, like having a baby.  I already submitted the forms and can't change them now, so no luck there.  I did however find the forms to file that will allow me to "repay" myself through the HSA which will at least save me some with taxes roughly $1,000 or 25% of the contributions I will make this year.  Thank you all for your help, this is exactly what I was looking for!
Speaking of all other medical bills being paid 100% by the insurance company this year I have jokingly asked my wife if we can have a 3rd child before the years is up because it will be FFFFRREEEEEEEEEEEEE!!!!!  Not likely to happen, we are done with two.
JB

ZiziPB

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Re: Did I Overspend on This Baby
« Reply #10 on: January 10, 2014, 01:38:56 PM »
Don't despair about this year.  Increase your contributions for next year (and the one after if necessary) so that you can reimburse yourself this year's unreimbursed expenses.  HSAs do not go by calendar year (in other words, you can use the funds contributed in 2015 and beyond to reimburse yourself for 2014 expenses).

Khan

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Re: Did I Overspend on This Baby
« Reply #11 on: January 10, 2014, 01:44:53 PM »
I recommend returning the baby, and seeing if you can get a better deal elsewhere.

Thegoblinchief

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Re: Did I Overspend on This Baby
« Reply #12 on: January 10, 2014, 04:13:38 PM »
I recommend returning the baby, and seeing if you can get a better deal elsewhere.

LOL!

More seriously: 30K sounds really high, even for a C-section. When my first was born (granted, almost 8 years ago), the bill for delivery and TWO WEEKS in the NICU was $30K. Try negotiating the bill down if it is really that high.

jbmatth

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Re: Did I Overspend on This Baby
« Reply #13 on: January 13, 2014, 10:05:35 AM »
I tried to do a money back guarantee, but they wouldn't have any of that. LOL  The bills so far are on par with the last child we had in 2011 adjusted for inflation.  I'll try to negotiate it if I can, but I'm not holding my breath.  Good news is using the tips below it looks like I'll be able to save about $1,500 give or take.  I won't know until it is time to pay the bill and file the paperwork at the end of the year.
JB

Thegoblinchief

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Re: Did I Overspend on This Baby
« Reply #14 on: January 13, 2014, 02:42:08 PM »
Huh, wow, surprised the delivery was that much. I know I was really glad with my first that our OOP max was only $3k. Imagine having a $30K bill with no insurance!

burly

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Re: Did I Overspend on This Baby
« Reply #15 on: January 13, 2014, 03:00:14 PM »
My max out of pocket is 5k... when my daughter was born, I was short too due to an ER expense a few months prior and in prior year... However, I was able to deposit another 2k from my checking account into the HSA and then immediately take it out... This will have allowed me to claim it on my tax return for this upcoming 2013 return.

Wouldn't that work?

jbmatth

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Re: Did I Overspend on This Baby
« Reply #16 on: January 14, 2014, 12:28:53 PM »
If I were to put money into the HSA from a checking account, which I'm not sure I could do, that would already be after tax money and I wouldn't get the tax break.  Correct me if I'm wrong though please.  As for the $30k bill that seems pretty standard from what I've seen on the internet that others have had billed.  Now the insurance companies negotiated rate would be lower by a few thousand, but I'm sure most people without insurance that have a baby and don't have that kind of money just wouldn't pay.  I mean what could the hospital really do once the baby is born even with legal action I don't think that they would normally get anything out of it.  Sad world we live in I guess.

ZiziPB

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Re: Did I Overspend on This Baby
« Reply #17 on: January 14, 2014, 12:43:56 PM »
If you can put the money into the HSA as suggested, you then deduct it at tax time (just like a tax deductible IRA) so you would end up getting the break when you get your tax refund.  But, if you are not able to do it this year, do it next year (as long as you had an HSA when you incurred the expense, you can reimburse yourself at any time, it is not limited to the calendar year in which the expense was incurred).

Quote
Now the insurance companies negotiated rate would be lower by a few thousand

Don't you get the benefit of insurance negotiated rates in your plan?  As far as I know every HDHP works that way.

jpo

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Re: Did I Overspend on This Baby
« Reply #18 on: January 14, 2014, 01:23:06 PM »
If I were to put money into the HSA from a checking account, which I'm not sure I could do, that would already be after tax money and I wouldn't get the tax break.
You can, and you do get the tax break in April.

jbmatth

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Re: Did I Overspend on This Baby
« Reply #19 on: January 14, 2014, 02:06:01 PM »
Ya'll are just full of great advice!  Thank you so much for these tips, I will get the break for 2014 taxes, because these are all 2014 expenses.  I do get negotiated rates with the HDHP, but that only equates down to a 10% savings, so the total amount billed to insurance is ~$27k, of which I'll have the deductible and then 20% after that. Once again thanks for the information.
JB

jbmatth

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Re: Did I Overspend on This Baby
« Reply #20 on: February 05, 2014, 09:23:21 AM »
I just thought I'd fill ya'll in, and thank you again for the great advise.  When I went to pay the bills I asked if I could get a discount for paying them in full, and was able to negotiate 20% off of my portion of the bill, or about $1,400 on that portion.  Now all that remains are two smaller bills then I'll fill out the paperwork at the end of the year to pay myself back around $4,000 from my HSA.  Which appears to be both tax, medicare, and SS exempt.  Woo Hoo!!!!!!!  Ya'll are just awesome and I can't thank you enough for the help. 

P.S. One last bonus I put it on my rewards card and will get an additional 1% back, and have already paid the card off.  :)

sheepstache

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Re: Did I Overspend on This Baby
« Reply #21 on: February 05, 2014, 10:07:32 AM »
Badass!