Insurance is confusing, medical bills are a foreign language, and who has time for it? Have you actually read your healthcare plan and know your co-pays, prescription costs, deductible, or even premium per month? Let’s break down how you can find clarity on healthcare costs…and, heck, maybe even save some money.
Summary of Benefits and Coverage (SBC)
This document is usually provided when you are making healthcare plan selections. Hopefully you’ve seen them when choosing your plan or during open enrollment. They provide an overview of what is covered, what’s NOT covered, and the limits of the coverage. You’ll also find examples of how coverage works for pregnancy or injury. This is a great place to start for family planning or if you are prone to accidents! Keep in mind this is only a summary. To find all of the details, look at complete health plan documents.
Check your medical bills before paying them
In a nationally representative Consumer Reports survey of 1,000 insured adults who incurred a major medical bill over a two-year period, two out of three said they had at least one billing issue, such as higher-than-expected charges, unclear statements, and bills arriving months late! I may be a little extreme in keeping all my receipts. I double checking…down to the penny…that my credit card was billed correctly. This “skill” comes in handy when I’m looking at my own medical bills. If you find that you have a large bill or are even paying full cost, check it out and don’t be afraid to negotiate with your provider. They may offer a discount or payment plan help ease the burden.
You might already know that these types of plans can be expensive. The premiums are often times much lower than other plans, such as a Health Maintenance Organizations (HMO). But as the name implies, the deductible can be much higher than the HMO. In order to help plan and pay for medical bills up to the deductible, high-deductible plans can be combined with a health savings account (HSA). An HSA is a savings account that you (and sometimes your employer) fund and allows you to pay for certain medical expenses with money free from federal taxes. Another advantage is that the money grows tax-free. AND, when you need the money, it can be withdrawn penalty-free as long as it’s for qualified medical expenses.
Budgeting for a complex topic
The household budget is not an easy nut to crack. Every dollar counts. Try taking the surprise out of medical bills and healthcare costs by spending a little time on reviewing your plan, verifying medical bills, and considering a high-deductible plan. Being proactive now may help with saving later.
Kelly Luethje is a CERTIFIED FINANCIAL PLANNER™ professional and founder of Willow Planning Group, LLC. She provides financial education and guidance to help you live life on your terms. Kelly can usually be found on a mountain, or by a lake, working virtually with clients across the country.