INDIANAPOLIS (AP) — Many workers will have a new form of health insurance coverage to consider when they sign up for next year’s benefits plans this fall, and in some cases, it may be an offer they can’t refuse.
That’s because companies struggling to control health care costs are turning more to consumer-directed health plans as an option for their workers and, in some cases, it’s the only choice they’ll provide.
These plans offer lower premiums than most traditional coverage. That means that health insurance will take a smaller bite out of an employee’s paycheck. But the tradeoff is that the worker pays more out of pocket for care, thanks to a deductible that can be well north of $1,000.
The deductible is the annual amount a patient pays before coverage starts, and consumer-directed plans offer some help dealing with this expense. They typically pair coverage with health savings accounts (HSAs) or health reimbursement arrangements (HRAs).
HSAs enable workers to set aside pretax dollars for medical expenses, and companies often help employees by contributing to the accounts as well. Workers can keep the unused money in the accounts and earn interest.
HRAs are employer-funded accounts that also help pay expenses. But that money belongs to the company and stays with it if the employee leaves.
Here are some keys to using consumer-directed plans wisely.
— DIG THROUGH THE PLAN DETAILS
Workers should not assume that they simply trade a lower premium for a high deductible with these plans.
“You have to look at the whole plan and make sure you understand if the high deductible is packaged with other differences in the plan that help reduce the premium costs,” said Kathleen Stoll, deputy executive director of Families USA, a health care consumer advocacy group.
Make sure the family doctor is included in the new plan’s coverage network. The care providers included in an insurer’s network could change with the coverage, and out-of-network care can be much more expensive.
Look at the plan’s coinsurance requirement. That’s the percentage of the remaining bill a patient is responsible for generally after meeting a deductible. It’s typically around 20 percent.
Know all the fees that come with an HSA. These can include charges to set up the account and fees per transaction.
Understand how the plan’s deductibles work. This usually includes a separate deductible for care received outside the insurer’s network of providers.
Family coverage also may include an embedded deductible, which applies to individual family members. This allows insurance coverage to start for an individual who is hit by a lot of medical expenses, while the rest of the family covered by the plan is still paying the deductible.
— BE PREPARED FOR BIGGER BILLS
The higher deductibles that come with consumer-driven health plans mean a patient may have to pay as much as $100 for a doctor’s visit, rather than the more common co-payment of $20.
Patients should not pay this large bill at the doctor’s office. Ask the office to first send it to the insurer so any coverage or in-network deductions can apply, said Craig Hankins of plan provider UnitedHealthcare.
Be prepared to pay more at the pharmacy too. Some drugs can cost hundreds of dollars, and patients with limited means may find this too challenging for long-term medications.
— DON’T PASS ON PREVENTIVE CARE
High deductible-health plans have stirred concern with reports that individuals worried about the larger out-of-pocket expenses sometimes skip preventive care to save money.
That’s a mistake because preventive measures like high blood pressure screening can catch big health problems early, and patients can receive this care without paying a big bill.
President Barack Obama’s healthcare overhaul requires insurers to cover several preventive measures with no charge to patients at the doctor’s office. Services covered by this provision include screening for depression, cholesterol and cervical cancer and immunizations like flu shots.
A list of preventive care covered under this provision can be found at www.healthcare.gov .
— START SAVING
Workers should make regular contributions to their health savings accounts even if the employer also contributes. That company contribution may not be enough to ease the blow from a big medical expense.
What seems like a reasonable deductible when a patient is fully employed can become challenging if there’s a change in income. A patient may have to miss work due to a major medical issue, or his or her spouse may have to take some time off to help with care.
Remember that deductibles reset every year. Think about the difficulties that could arise if treatment for an illness like cancer stretches from one year to the next.
“You have to think about what could happen if something dramatic happens to your health,” Stoll said. “You really want to provide a cushion against the unexpected.”