Planning a procedure on an HDHP can be very affordable because you can use funds from your Health Savings Account (HSA). This type of account is unique to HDHPs and allows you to pay for certain medical expenses with money that has not been taxed by the federal government. You are eligible to reserve $3,450 annually (pre-tax) for an individual and $6,850 (pre-tax) for a family to pay for qualified medical expenses, including your deductible.

Factors to Consider When Planning a Healthcare Procedure on a HDHP

There are several pieces of information that you must obtain before scheduling your procedure. An HDHP allows you to direct your own healthcare, and this begins with careful planning. Three important considerations are the cost of your procedure, the quality ratings of your provider and the timing of your procedure.

The Cost of Your Procedure

Because you are responsible for costs for covered healthcare services until you reach your deductible, you should comparison shop if you elect to have a nonemergency procedure. Many health insurance websites provide information on where to find in-network services. Some even offer cost-estimator tools that give the price you would pay to various providers for a specific service. One of the benefits of an HDHP is that out-of-pocket expenses are the negotiated rate between the healthcare provider and insurance company, not the market rate. This can offer you significant savings.

To obtain accurate pricing, ask your physician’s billing office for the Current Procedure Terminology (CPT) code for your procedure. You will want to call your insurance company for detailed information about your out-of-pocket responsibility.

Remember that many preventative tests and screenings are covered at 100 percent. You may be able to find a list of covered preventative procedures on your health insurance provider’s website, but call Member Services to confirm before scheduling.

The Quality Ratings of Your Provider

Quality can vary just as much as price, so do your research to find independent ratings of physicians and facilities you are considering. Be open with doctors about your goals of balancing cost with quality of care. Often, doctors may offer solutions for less expensive tests, services, procedures or prescriptions. This may help you in your final decisions.

The Timing of Your Procedure

Timing is also an important consideration. If you anticipate needing an expensive procedure that approaches or exceeds your deductible, schedule it early in the year, if possible. After you have met your deductible, your plan will pay for 100 percent of covered services for the rest of the year. This is where HDHPs can work in your favor, so plan your expensive procedures carefully.

Questions to Ask Your Insurance Provider to Determine Procedure Costs on an HDHP

Now, let’s put what we learned into action so you can begin using your healthcare dollars more efficiently under your HDHP, refer to this.

Here is an A-Z guide for scheduling a procedure on a HDHP:

1. Call your insurance company and say, “I am considering having ________________ procedure. The CPT code is ________.   Can you verify whether this is a preventative service at no charge or whether I will be responsible for paying the negotiated rate?”
2. If the procedure is not a preventative service, ask, “How much have I already paid toward my individual/family deductible?”
3. Now, you should ask about in-network doctors. If you have already chosen your doctor, you can ask, “Would you please verify that Dr. ____________ [your (preferred doctor]) is in-network?” If you do not have a preferred doctor, you may ask for a list of a few doctors in your surrounding area who are in-network and their corresponding contact information.
4. The next step is to inquire about in-network facilities by asking, “Where does Dr. ________________ perform this procedure? Is _________________ [(your preferred location]) an in-network facility?” Some doctors have privileges at several hospitals and/or ambulatory surgery centers (ASCs), so you will want to choose the most economical location. Often, an ASC is more reasonably priced.
5. Ask, “Are there other specialists that will be billing for this procedure such as an anesthesiologist, radiologist or physical therapist?” Gather as much information as you can to so you can plan ahead.
6. If your procedure requires a hospital stay, ask, “How much should I expect my bill from the hospital to be? Is there a daily charge?”
7. You are now ready to contact and interview doctors if you have not yet made your selection.
8. After you choose a doctor and a facility, check the balance of your HSA. If you have not set aside enough funds through HSA, ask your doctor’s billing office or facility billing office about a payment plan.

A lower monthly premium gives you the power to choose how you want to spend your reserved healthcare funds. Instead of contributing your hard-earned dollars toward a healthcare network account, you can invest that same money, tax-free, into your HSA for your own medical costs and even earn interest.

Budgeting for better health

Traditional healthcare plans focus on managing your health benefits, but HDHPs focus on managing your health and your budget. If you can be self-disciplined and plan ahead, your HDHP will offer you flexibility and control. Here are some guidelines on how to maximize your cost savings and make your HDHP work for you:

Open an HSA and contribute the maximum amount each year

To open and put money into a Health Savings Account (HSA), you must have an HDHP. This is regulated by the Internal Revenue Service. Think of your HSA as a unique bank account whose sole purpose is to fund your HSA-qualified expenses. You are eligible to reserve $3,450 annually (pre-tax) for an individual and $6,850 (pre-tax) for a family to pay for qualified medical expenses, including your deductible. You can even request an HSA debit card that is linked to your HSA. This allows you to immediately pay for covered medical expenses using your reserved HSA dollars, instead of requesting to be reimbursed from your HSA later . Another advantage is that the dollars in your HSA account do not expire, so they roll into the following year if you do not use them.

When you open and fund an HSA, you have the flexibility to:

• Pay for eligible medical expenses on a claim-by-claim basis using your HSA or
• Use your own personal funds to cover medical expenses and save HSA dollars for future use

This is where personal monthly budgeting can help you get ahead. If you pay toward your deductible with your own funds and leave your HSA intact, you can accumulate a large savings account that can accrue interest.

Consistently building into your HSA can benefit you in two ways. You will be financially secure in the event of an unexpected medical event because you have funds readily available. You can also accumulate a sizable reserve for when you decide to enroll in Medicare (Part A and/or B). Although the IRS will not allow you to contribute to your HSA after you enroll in Medicare, you can still withdraw money from your HSA to help pay for medical expenses such as deductibles, premiums, copayments and coinsurances. As long as you use your HSA for qualified medical expenses, it will continue to be tax-free.

Price compare in-network doctors and facilities

There is no standard cost for a doctor visit or elective medical procedure, which means there can be huge cost variation among doctors and facilities in the same geographic area. Just as you would shop around before purchasing a new car, you should compare prices of doctors and facilities. By calling around to find low-cost, high-quality healthcare, you will be able to make informed decisions about how you spend your HSA funds.

Federal and state-initiated programs on healthcare price transparency allow you to obtain information regarding specific health charges and provider payments. This has not always been the case, but thanks to recent transparency laws, you are perfectly within your rights to call a doctor or facility and inquire about the cost of services such as non-emergency procedures and tests.

One of the best ways to reduce your medical costs is to stay in-network. Schedule your appointments with in-network doctors, and choose an ambulatory surgery center (ASC) over a hospital if you need an outpatient procedure. ASCs are modern healthcare facilities focused on providing same-day surgical care, including diagnostic and preventive procedures. They are a convenient alternative to hospital-based outpatient procedures, and many patients prefer ASCs because they offer quality care, personal service, convenient access, shorter wait times and lower cost. According to the Journal of the American Academy of Orthopedic Surgeons, ASCs save consumers between 17 and 43 percent compared to hospitals.

The role of screenings and lifestyle habits in preventive care

It is always more expensive to treat a disease than to prevent it. Preventive screenings like mammograms, colonoscopies and annual physicals offer early detection, quick intervention and disease prevention. HDHPs do not require you to pay for covered preventive care services as long as you stay within the guidelines of your plan. You may be required to see a doctor within your network for the procedure to be covered at 100 percent.

As much as 70 percent of healthcare spending can be attributed to behavioral and lifestyle choices. HDHPs encourage healthy lifestyle habits that keep your healthcare costs down. Because you pay out-of-pocket when you go to the doctor, staying healthy keeps money in your HSA where it belongs. Unhealthy choices like smoking, drinking alcohol and not exercising increase your risk for chronic conditions like heart disease, diabetes and cancer.  These conditions are associated with frequent doctor visits, expensive medications and hospitalizations. Good nutrition, regular exercise, annual wellness exams and preventive screenings can save you thousands of dollars each year in medical costs.

Take control of your budget and your health. Consider an HDHP so you can get the most out of your healthcare plan. High-quality medical care does not have to be expensive, so inquire today about an HDHP that fits your needs.

What are the costs associated with health insurance?

Most health insurance costs can be divided into three categories:

• Premiums: Most health insurance companies offer several types of plans with varying degrees of coverage. These differences in coverage affect monthly costs, known as premiums. The higher the premium, the less you will pay when you get sick.
• Deductibles: The dollar amount you pay out-of-pocket before your insurance begins to pay is called your deductible. Insurance plans that have higher monthly premiums tend to have lower deductibles, while plans with lower monthly premiums tend to have higher deductibles.
• Copays or Coinsurance: When you visit the doctor, you may be asked to pay either a copay which is a standard flat rate, or coinsurance, which is a percentage of the total charge for the visit.

What are the different types of health insurance plans?

There are four types of traditional healthcare plans:

• Exclusive Provider Organization (EPO): A managed care plan in which services are covered only if you use doctors, specialists or hospitals in the plan’s network (except in an emergency).
• Health Maintenance Organization (HMO): A type of health insurance plan that usually limits coverage to care from doctors who work for or contract with the HMO. It generally does not cover out-of-network care except in an emergency. An HMO may require you to live or work in its service area to be eligible for coverage, and you must select a primary care physician (PCP) to manage your care.
• Preferred Provider Organization (PPO): A type of health plan in which you pay less if you use providers in the plan’s network. You can use doctors, hospitals or providers outside of the network without a referral for an additional cost.
• Point of Service (POS): A type of plan in which you pay less if you use doctors, hospitals or other health care providers that belong to the plan’s network. POS plans require a referral from your PCP in order to see a specialist.

Features of the four traditional healthcare plans