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Changing Healthcare Responsibilities for Changing Times  |
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 Whether you get your health insurance through your employer or if you buy it on your own, everyone is going to have to start acting on their own behalf to cut the rising costs associated with insurance and healthcare. You’ve probably heard stories of catastrophic insurance with deductibles in the thousands of dollars and of insurance companies that refuse to cover tests and procedures. If so, you’re looking at the future of health insurance in America. As costs increase, individuals will be forced to shoulder the burden.
According to a March report by benefits consultant Watson Wyatt, nearly half (47 percent) of the 453 large U.S. employers currently offer a consumer-directed health plan (CDHP), a high-deductible plan offered with a personal account that can be used to pay a portion of medical expenses not covered under the plan. In the world of independently purchased health insurance by businesspeople, it’s the same concept as the pairing of a high deductible health plan (HDHP) with a health savings account (HSA).
And don’t be shocked if your employer starts to take an interest in your health. It’s very possible that your boss may be pushing you to loose weight, quit smoking, or to take part in company monitored exercises plans.
Wondering how you can prepare for this brave new world? Here are a few suggestions:
Take the initiative on changing your health care behavior: Lowering the number on your bathroom scale will have immediate health benefits, it will also make your health insurance options and potential out-of-pocket costs more affordable over time. A Stanford University and Rand Corporation study reported that lifetime medical costs related to diabetes, heart disease, high cholesterol, hypertension and stroke among the obese are $10,000 higher than among the non-obese. It added that lifetime medical costs could be reduced by $2,200 to $5,300 following a 10 percent reduction in body weight.
Know what you’re buying: Whether you buy health insurance through an agent or your employer, insist that they explain exactly what you’re getting for your premium, and where deductibles do and don’t apply. That way, you’ll have a baseline when you buy your own coverage. If you’re purchasing your own insurance policy, compare the premium savings from a higher deductible plan with your usage pattern of health services. What you save can often cover your high deductible.
Always discuss the potential cost of a diagnosis: If your physician diagnoses a condition that requires tests, prescription drugs, a hospital stay or ongoing therapy, ask polite but detailed questions about what you’ll be charged, from the doctor’s bills to ongoing ancillary costs associated with treatment. Ask the doctor or his office manager to possibly negotiate a discounted fee for service. It’s possible to get discounts through cash payments as well. Also consider asking for generic options and samples of prescription drugs to extend your savings.
Check local pricing resources: In non-emergency situations, you should always compare prices on treatments. Check with local medical boards and state health officials to see if they have online databases on costs for various medical procedures. Also, if there is a support group for your condition, talk to members about what they paid locally for care.
Talk to a financial adviser about planning for long-term care: If you or a loved one are diagnosed with a chronic illness, that’s a financial issue that requires a plan. As tough as it may be to focus on money issues at a stressful time, make an appointment with a tax professional or a financial planner to discuss affordability options that will safeguard your assets, including Medical Spending Accounts that can backstop out-of-pocket costs on high-deductible policies.
Take advantage of your company’s flexible spending account: A flexible spending account (FSA) is a separate, tax-advantaged account where you deposit funds to pay for medical expenses not paid by your insurance. You need to check what your particular company’s FSA allows you to stockpile funds for, and you will need to estimate carefully because you’ll have to spend out these funds by a particular annual date or lose the remainder. It’s also good to discuss how you’re allocating those expenses with a financial planner.
Information for this article provided by the Financial Planning Association (FPA).
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