Why Not to Pay Copays at the Doctor2 min read • November 14, 2018
…and have them billed to your insurance carrier
We can help you save money (off the retail price) at your next doctor’s appointment. You can use this strategy at any service provider – your doctor, dentist or even optometrists. Here is why not to pay your copay on your next doctor visit and have them billed to your insurance carrier.
One caveat – some services require in-person payment, so make sure you ask ahead of time!
The Requirement: HSA-Eligible Health Plan
Before we get into this healthcare payment and cost-savings strategy. Let us run you through the requirements. Don’t worry these are pretty simple, no advanced degree required.
You need an HSA. How do you get an HSA? You must have an HSA-eligible health plan, like a high deductible health plan. Ok, give me the exact details:
- In 2019, your health insurance must have an annual minimum deductible of $1,350 for individuals and $2,700 for families.
- In 2019, the annual out-of-pocket maximum can’t be more than $6,750 for individuals and $13,500 for families. This definition only applies to in-network services.
- The health insurance plan must be so that the individual/family pays the first cost of healthcare up to the deductible before any kind of insurance kicks in (preventative care excluded from this definition). This includes prescription drugs as well. The deductible and maximum out-of-pocket expenses are indexed annually for inflation.
Need A Quick HSA Refresher?
An HSA or Health Savings Account is a personal savings account for health expenses. An HSA is not a health plan but can be used in conjunction with HSA-eligible health plans, like HDHPs, to save tax-free dollars on health expenses.
HSAs allow for tax-deductible contributions, tax-free interest and tax-free withdrawals (for medical expenses). In 2019, individuals can contribute up to $3,500 in tax-free savings and families can contribute $7,000.
The Upside: 25% Extra Savings
Why do this? To use tax-free HSA money to save 25% off the retail cost (this assumes combined state and federal income taxes of 25% or more). This is an incredible way to reduce your out-of-pocket costs and lower the real dollar costs of health costs year over year. You can use an HSA to reduce lower health costs. The result is you save more of your money.
The Downside: Extra Paperwork
There is one small or maybe just annoying downside. This will require you send payments after your medical service. It will also mean you will need to upload your receipts to your HSA platform. No more than 5 minutes of work, we promise.
Healthcare costs can be substantial, spending 5 minutes to save up to 25% off your costs, even on lower cost items like co-pays, means more money in your pocket. These costs add up over time. Imagine how much money this will save you in 10 or 20 years. This simple adjustment in how you pay for health expenses is an easy way to reduce your out-of-pocket costs. It’s nice to find a way to save money on health costs. Enjoy.
Disclaimer: the content presented in this article are for informational purposes only, and is not, and must not be considered investment, legal, accounting or financial planning advice, nor a recommendation as to a specific course of action. Investors should consult all available information, including fund prospectuses, and consult with appropriate investment, accounting, legal, and accounting professionals, as appropriate, before making any investment or utilizing any financial planning strategy.