Are you ready for the New Year? Let us ask another way, are you ready for your deductible? Most health insurance plans have high payment requirements that must be met before your insurance really starts. This is the trend right now for health coverage, whether or not it’s affordable. Most deductibles, which must be met every, single year are over $1,000 dollars per person and even higher for family plans. If you bought health insurance through healthcare.gov your deductible could be as much as $6,500.
How many people does this affect? In 2011, 1 in 5 Americans already had high deductible plans. Now, nearly 46% of Americans have plans with deductibles over $1,000. These types of plans are growing in popularity among employers. Why? Simply stated these are the cheapest health plan options.
Why is there an issue? Companies are saving money, while you are incurring more of the costs. Insurance companies do not pay until you meet your annual requirement. Your first few health services will count towards the deductible, meaning you are basically paying out of pocket for your care. You will continue to pay until you’ve spent the required $1,500, $3,000, or even $10,000 dollars.
There is an upside, most office visits are a flat fee (co-payment) and are not counted into the deductible. If you have co-payments for office visits, the insurance pays a good portion of the costs. Also, preventative services are covered in full. This is a government regulation, so you are not liable for these costs. If you are particularly lucky, your deductible only counts towards hospital visits. Likely, this is not the case.
On the downside, if you have an insurance plan where everything applies to the deductible, you might want to start setting aside savings for your health services. When you pick up your prescription, you are at the most risk. For a multitude of plans there is either a separate Rx deductible or it applies to the overall plan deductible. Either way, costs will likely be higher in January, even throughout the first quarter. You will be paying for services yourself until the financial requirement is met. The best advice would be to start saving, a few months in advance.
There are a few tips and tricks to save for annual healthcare costs, which will be in our next blog. Take a look to avoid unexpected surprises this New Year. There are 2 ways to avoid financial impact, save up for it or pick a plan without a deductible, which are virtually nonexistent.
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