New year, new insurance plan!
As of Jan. 1, many people suddenly are in possession of a high-deductible insurance plan.
This may sound scary (High deductible! Reach for your wallet!), but it doesn’t have to be. We’re going to give you seven helpful hints on how to deal.
First, the landscape: For many of us, health insurance long covered almost everything with a $20 deductible. But the market’s changing dramatically, and those plans cover less and less: more and more of us have the high deductible, the high co-pay, the out-of-network and out-of-pocket expenses.
Your copay is the fixed amount you pay: say $20 for your primary care provider, $30 for a specialist. Your coinsurance is the part you contribute after you meet your deductible — and it’s usually expressed as a percent of the cost, say your insurer pays 80% and you pay 20%. Usually you have one or the other, not both.
One in three Americans has had trouble paying medical bills, according to a January study from the Kaiser Family Foundation. One big surprise: the majority of people with difficulty paying medical bills, 54%, had employer-sponsored private insurance. They were hit by unaffordable debt caused by cost-sharing for care covered by their insurance, out-of-network charges, coverage limits and exclusions, and unaffordable premiums. Another 30% of those experiencing difficulty were uninsured.
Let that sink in: The majority of people who had difficulty paying bills had employer-sponsored insurance.
So, maybe that’s you: What can you do? We put these steps together after an email chat with Hanny Freiwat, president and co-founder of Wellero, a new smartphone app that wants to make health care costs easy to understand by making online payments, and easing deductibles and other calculations.
1. Know What Your Plan Covers
For some high-deductible insurance plans, the first $5,000 (or whatever) of claims is paid at the rack rate, or charged rate. For others, the first $5,000 is paid at the negotiated rate. Some primary-care visits are free. Some phone consultations are free. Know your plan.
2. Ask About Cost
“How much will this cost? How much will this cost me? Are there any additional fees? Does that cover all labs/tests/prescriptions?” Take names, take notes; educate yourself. Freiwat says, “Consumers are frustrated by the lack of understanding around their benefits — specifically, how much they will owe for a service is the number one issue.”
3. Use Pricing Tools
Prices vary widely. Often, you can discover startling differences using pricing tools. (We’ve got tools at clearhealthcosts.com; other members of this growing ecosystem include fairhealth.org and healthcarebluebook.com.) For example, if your coinsurance has you paying 20% of the sticker price for a $4,000 MRI, that’s $800. You can get an MRI for $400 on a cash or self-pay rate at many places. You might want the $400 MRI. Or inquire if there’s an $800 MRI that’s in-network: 20% of $800 is a nice, tidy $160.