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How to Ease the Bite of High-Deductible Health Plans

The initial out-of-pocket medical costs can be sky-high, but there are ways to soften the financial blow

By Lani Luciano | April 1, 2013

With health costs rising about 5 percent a year, you may have switched to a high-deductible health insurance plan to save money. Or perhaps a high-deductible plan is the only type your employer now offers, as is the case for 15 percent of companies recently surveyed by Towers Watson and the National Business Group on Health (double the percentage in 2010).
 
The Tradeoff for Lower Premiums
 
But your out-of-pocket costs can be substantial with a high-deductible plan until you’ve shelled out enough money to exceed the deductible — that’s the tradeoff for lower annual premiums. The annual deductible, at least $1,250 for an individual, can hit five figures for a family.
 
So you may want to take advantage of strategies that will let you keep your health outlays down.
 
(MORE: A Health Economist Confronts His Family’s Medical Costs)
 
Health Savings Account Limits
 
One way to do this is through a tax-advantaged Health Savings Account, which helps you cover costs until your insurance begins. Many, but not all, high-deductible plans come with these accounts.
 
In 2013, individuals can put as much as $3,250 of their pretax pay ($4,250 if you’re 55 or older) into these accounts. The withdrawals for eligible medical expenses are tax-free. For families, the contribution limit is $6,450; $7,450 if you’re 55 or older. (Some high-deductible plans offer Health Reimbursement Accounts, whose contributions are made by employers.)
 
Health Reform’s Free Preventive Services
 
You may also be able to avoid paying for some preventive services, thanks to the Affordable Care Act.
 
Flu shots, mammogram screenings for women over 40 (every one to two years) and osteoporosis screenings for women over 60, for example, aren’t subject to deductibles or co-pays, even in high-deductible plans. The U.S. government’s website, Healthcare.gov, has a rundown of the law’s preventive coverage provisions.
 
(MORE: 3 Things Women Should Know About Health Reform)
 
Ways to Keep High-Deductible Outlays Low
 
But when the care you need is not free and insurance coverage is thousands of deductible dollars away, try taking advantage of these ways to soften the financial blow:
 
Ask for a discount. Hospitals, doctors and test labs may be sympathetic — or just realistic — when they realize insurance won’t be footing the bill.
 
Keep in mind there’s often a lot of negotiating room between the “full” price of a medical service you’re likely to be billed and the lower rate offered to insurers. A hospital or doctor may choose to accept a lower fee rather than pursue a patient who’s unable to pay the list price.
 
Knowing what patients are charged in your area can strengthen your bargaining position, so do some checking before you negotiate.
 
Such websites as Fairhealthconsumer.org, Healthcarebluebook.com and Newchoicehealth.com provide online tools to help you compare costs. Some insurers, like United Healthcare and Aetna, also offer similar assistance for employees with their coverage. Ask your benefits department.
 
Find less expensive care. By checking prices online, you may learn that a doctor, hospital or lab other than the one you planned to use may charge a lower price.

This doesn’t mean its quality would be inferior any more than high cost translates to high quality. An analysis published in the January 2013 Annals of Internal Medicine looked at 61 studies of the relationship between cost and quality in medical care and found almost no correlation.
 
You may also be able to lower medication costs by asking your doctor to prescribe a generic instead of a name brand and requesting office samples so you can try a drug before paying for a full prescription.
 
(MORE: Benefits Blues: A Growing Epidemic Among U.S. Workers)
 
Don’t pay by credit card. Instead of using plastic to settle your medical bill, ask if you could pay by cash or check in installments over time. This way, you won’t owe interest.
 
Save your receipts. To track your medical spending until you hit the deductible, most insurers will give you a debit card so you and your carrier each have a running tally. But it’s still wise to keep all your receipts.
 
The reason? You can then check them against the Explanation of Benefits statements your insurer sends in case there’s any dispute or confusion about the plan’s eligible expenses or how much you’ve spent. 
        
Know your rights. Bone up on the details of your coverage, especially your rights under the still-evolving health reform law, to understand your potential costs. You’ll generally get a brochure from your employer with the specifics or you can read up on the rules online.
 
Expect to find that you’ll pay out-of-network health providers more than in-network ones for the same service. But if your insurer has no in-network providers for the preventive care included in the health reform law, the out-of-network care is still free.
 
Be a smart patient. The best way to save money during the high-deductible window is by not incurring a medical expense in the first place.
 
You may not actually need every test or treatment your doctor recommends. Guidelines developed by medical specialty groups now discourage the overuse of many widely used protocols and procedures, like CT scans for migraines and antibiotics for sinusitis.
 
A new campaign from the American Board of Internal Medicine Foundation called Choosing Wisely, has just posted guidelines identifying common tests and procedures that may not be needed. It’s worth checking out.
 
“We want to encourage physicians and patients to discuss what care is truly necessary so they can avoid tests and procedures that are wasteful and can even be harmful,” says Daniel Wolfson, the foundation’s executive vice president.
 
That’s especially important if you have a high-deductible health insurance plan — the cost of this kind of care could break your wallet.
 
Lani Luciano has written about health and personal finances for Next Avenue, AARP The Magazine, Money and other publications.