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How to Handle Your High-Deductible Health Plan

By Christy Bieber – May 8, 2019 at 8:45AM

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How can you cover healthcare costs when you have a big deductible to pay?

Health insurance is supposed to provide coverage for expensive medical care. Unfortunately, deductibles on health insurance plans are often so high that policies seem to hardly pay for anything at all.

If you have a healthcare plan classified as high-deductible, which means your deductible is $1,350 or more for an individual plan or $2,700 for a family plan, you need to be able to cover many costs out of pocket. And, the higher your deductible, the more you have to pay before your insurer chips in a penny.

The good news is there are steps you can take to make sure you can afford your medical care, even if you have a deductible totaling several thousand dollars. Here are a few of the key things you should consider doing if you have a high-deductible health plan (HDHP).

Doctor talking to patient about healthcare.

Image source: Getty Images.

Find out what care is covered before the deductible kicks in

While you generally have to pay the deductible on your insurance policy before your care is covered, there are exceptions. In fact, most policies provide coverage for preventive care, including screening tests and annual exams, even if you haven't met your deductible yet. These services could be partially or fully covered depending upon policy terms. 

By taking advantage of all available opportunities for free preventive care, you can maximize the chances you'll stay healthy and won't end up incurring high bills to treat illnesses. So, be sure to read your insurance policy carefully, find out what services are paid for before your deductible is met, and schedule appointments for all those services you may need.

You do need to be careful, though, that you don't end up facing unexpected charges. A free annual exam may be covered, but if your doctor discovers something alarming and decides to do some additional testing, that may not be paid for by your insurer if you haven't met your deductible. Tell your doctor you only want to receive services that are covered, and ask the doctor's office to get your approval before providing any additional care you might end up having to pay for out-of-pocket. You may decide you need this extra care and are willing to pay for it, but you don't want to be surprised with a big bill. 

Open an HSA and save for future healthcare costs

One of the biggest benefits of having a qualifying high-deductible health plan is these policies can make you eligible to open a Health Savings Account (HSA). HSAs allow you to make tax-deductible contributions to a special savings account you can use to pay for healthcare. Not only do you get to deduct the invested funds, up to annual limits, but you can also withdraw money tax-free as long as you use it to pay for medical care. 

It's a good idea to make the maximum contributions to your HSA every single year you're eligible for a health savings account because the money never expires and you can grow the balance by investing it in the market. If you don't spend all the money in your HSA on healthcare during one year you contribute, the money can be saved for future healthcare costs. You can grow a big nest egg to act as a safety net, for times when expensive healthcare becomes necessary like during pregnancy and childbirth, or in retirement when you might require long-term care. You'll also be glad you have these savings to draw from when the unexpected happens like a sudden illness or injury. 

Stick with in-network doctors whenever possible

Many policies have separate deductibles for in-network care and out-of-network care -- and the out-of-network deductible is often higher. You don't want to have to work on meeting two different deductibles before insurance coverage kicks in, nor do you want to be forced to pay a higher deductible before your insurance starts paying for care. 

In-network doctors have negotiated rates with insurers, while out-of-network doctors may charge you more for services. This means you pay more up front -- but you won't typically get credit toward your deductible for the additional costs of seeing an out-of-network doctor. This can be confusing, so here's a simple example. If your insurer negotiated with in-network labs to pay $100 for a blood test you need before you've met your deductible but you go to an out-of-network lab that charges $200, you'd have to pay the $200. But only the $100 the insurer allows for the lab work would count toward your deductible, even though you paid $200. 

Talk with your doctor about your options

Many patients don't discuss cost concerns with doctors. In fact, one study found only around 30% of patients and doctors had a conversation about costs. Of those conversations, 44% involved a discussion of strategies to reduce medical expenses.

You should never be embarrassed or afraid to let your doctor know paying out-of-pocket for care is a challenge for you. Your doctor may be able to provide suggestions on how you can keep care costs down, such as using a generic medication instead of a name-brand one or taking advantage of free medication samples drug companies have provided.  

In a best-case scenario, a conversation with your doctor will lead to substantial cost savings. The worst that can happen is your doctor doesn't have any helpful suggestions for you, but you're no worse off for asking. Letting your doctor know you're looking to cut costs might even guide your doctor's future decisions about your prescriptions and orders for lab work.

You can manage with a high-deductible health plan

By taking these basic steps, you should hopefully be able to afford the healthcare you need, even with an HDHP.

Of course, if you find you're consistently spending a fortune on out-of-pocket care, you may also decide it makes sense to pay higher premiums for more comprehensive coverage. Of course, without an HDHP, you won't be able to save in an HSA, but if it's worth it to you, you can make a switch during the next open enrollment period to a health insurance plan that's better suited to your more intensive medical needs. 

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