High-Deductible Health Plans (HDHP) can be like the monster under the bed. You need one to qualify for a Health Savings Account (HSA), and the much lower premium is great. However, if you don’t know how to manage your HDHP, it could be very scary.
Like the biggest monster – the deductible. If you don’t know what to look for, you could also confront other HDHP monsters. But monsters are a lot less scary when you flip the light switch on. So, let’s shed some light on those not-so-scary monsters.
If you’re new to HSAs, you could be shocked when you encounter the medical plan that goes with your HSA. Whether you get coverage through your employer or on one of the insurance exchanges, high deductibles are all the rage.
To qualify for an HSA, the HDHP must meet certain IRS requirements. For example, in 2017, the minimum deductible is $1,300 for single coverage and $2,600 for family coverage. Deductibles can be higher – much higher – although the IRS does add some protection.
The IRS sets a maximum limit on how much you spend on the deductible and other expenses you pay out of your pocket. In 2017, that out-of-pocket maximum is $6,550 for an individual and $13,100 for a family.
I know what you’re thinking. Whoa! That is one scary monster of a deductible. But there are steps you can take to knock that monster down to size.
- Check for employer contribution – If you have employer coverage, find out if your employer contributes to your HSA. Those funds could be used toward the deductible.
- Know your limits – Let’s face it. Not everyone can afford the same out-of-pocket expenses. Figure out your typical healthcare costs. Factor in contributions and money saved from the HDHP’s much lower premium costs. Does an HSA make sense for you?
- Shop around – You may only have a few options with an employer-sponsored plan. However, if you purchase your own health insurance, shop for a plan that works for you. Use filters for your search that show plans with a specified deductible.
Additional Tips: Most preventive services have no out-of-pocket costs. The deductible does not apply when you receive those services. If those are the only services you receive during the year, you may not have to worry about satisfying your deductible.
Also, take advantage of available tools for calculating your costs. You may find that deductible isn’t as scary as you thought.
The Provider Network
Most HDHPs offer a network of participating physicians and healthcare facilities that provide discounts for covered care. Typically, you see two levels of benefits for your HDHP – In-network benefits and out-of-network benefits (may be referred to as Participating and Non-Participating).
The cost of the scary out-of-network monster can be huge. It pays to know if your doctor participates in the network.
If you are someone who has a personal physician you trust, make sure you know before you sign up for an HSA/HDHP if your physician is in the plan’s network. Nothing tests physician loyalty more than the almighty dollar.
The Narrow Network
Say what? What’s a narrow network? This little monster may be known by other names. It could be called a Preferred Network. It has become very common to see one pop up in medical plans.
Narrow or Preferred Networks have a select group of physicians and healthcare providers who provide more cost-effective care (at least in theory). Typically, that reduces the size of the network (thus, the name “narrow”).
Insurance companies offer multiple medical plans. The narrow network monster may lurk under a blanket of tiny print. It is easy to miss that it’s a narrow network.
Premiums are typically lower with a narrow network. So, what’s so bad about that? Well, nothing, if your physician participates in the narrow network or you are open to seeing a different physician who does participate. Here are a few things you can do to catch this sneaky monster.
- Network check – Look for a link to a provider search page that allows you to check if your physician is in that specific network.
- Name check – If you see multiple plans from the same insurance company, check to see if some of the plans are named something like “Preferred” or “Select.” Those are probably narrow networks.
High-Deductible Health Plans don’t have to be scary. Flip the switch on better healthcare management and you can banish the HDHP monsters from taking control.