High-deductible insurance plans: 7 easy tips to help you save

SUMMARY: New year, new insurance plan! As of Jan. 1, many people suddenly are in possession of a high-deductible insurance plan. This may sound scary (High deductible! Reach for your wallet!), but it really isn’t. We’re going to give you seven helpful hints on how to deal. Read on, or …

This post first appeared on credit.com, where I am a contributor.

First, the landscape. For many of us, health insurance long covered almost everything with a $20 deductible. But the market’s changing dramatically, and those plans cover less and less: more and more of us have the high deductible, the high co-pay, the out-of-network and out-of-pocket expense.

Your copay is the fixed amount you pay: say $20 for your primary care provider, $30 for a specialist. Your coinsurance is the part you contribute after you meet your deductible – and it’s usually expressed as a percent of the cost, say your insurer pays 80% and you pay 20%. Usually you have one or the other, not both.

One in three Americans has had trouble paying medical bills, according to a January 2014  study from the Kaiser Family Foundation. One big surprise: the majority of people with difficulty paying medical bills, 54%, had employer-sponsored private insurance. They were hit by unaffordable debt caused by cost-sharing for care covered by their insurance, out-of-network charges, coverage limits and exclusions, and unaffordable premiums. Another 30% of those experiencing difficulty were uninsured.

Let let that sink in: The majority of people who had difficulty paying bills had employer-sponsored insurance.

So, maybe that’s you: What can you do? We put these steps together after an e-mail chat with Hanny Freiwat, president and co-founder of Wellero, a new smartphone app that calls itself “a mobile retail experience for consumers of health care,” which pledges to make health care costs easy to understand by making online payments, and easing deductibles and other calculations.

(Update, February 2016: Cambia Health Care, which had funded Wellero, decided to mothball it in early 2016.)

1. Know what your plan covers. For some high-deductible plans, the first $5,000 (or whatever) of claims is paid at the rack rate, or charged rate. For others, the first $5,000 is paid at the negotiated rate. Some primary-care visits are free. Some phone consultations are free. Know your plan.
2. Ask “How much will this cost? How much will this cost me? Are there any additional fees? Does that cover all labs/tests/prescriptions?” Take names, take notes; educate yourself. Freiwat said, “Consumers are frustrated by the lack of understanding around their benefits – specifically, how much they will owe for a service is the number one issue.”
3. Use pricing tools. Prices vary widely. Often, you can discover startling differences using pricing tools. (We’ve got tools at clearhealthcosts.com; other members of this  growing ecosystem include fairhealth.org and healthcarebluebook.com.) For example, if your coinsurance has you paying 20 percent of the sticker price for a $4,000 MRI, that’s $800. You can get an MRI for $400 on a cash or self-pay rate at many places. You might want the $400 MRI. Or inquire if there’s an $800 MRI that’s in network: 20 percent of $800 is a nice, tidy $160.
4. Ask for a cash or self-pay rate. Many providers have a cash or self-pay rate that they will accept – but you have to ask for it in advance in most cases. Again, those pricing tools come in handy. The downside: “Basically, if I use insurance, I pay the higher rate and the providers submit a claim so my deductibles get adjusted,” Freiwat said. “That process costs the provider money and in turn I get to pay for some of it. If I take the cash option, then I am taking a risk that my deductible and out of pocket amounts will not be updated, as my insurer and my insurance benefits might not kick in when they should.”
5. If you get a bill that you don’t understand, call the provider and ask questions. If you get an explanation of benefits from the insurer that you don’t understand, call and ask questions. Take names, take notes. “Payment and rates are very complicated based on state and government regulations, provider association rules, and health insurance contracts,” Freiwat noted. But they should be able to explain it to you.
6. Use that network. Maybe your new plan doesn’t cover docs or hospitals who were on your old plan. Less choice means lower costs. It’s not the first time this has happened; as in many other things, the ACA accelerated an existing trend. But! Staying in network is likely to be less expensive. Going out, likely to be more expensive. But don’t just assume: always ask. “How much will this cost? How much will this cost me?” Take names, take notes.
7. Don’t assume that everything’s covered if it’s preventive under the Affordable Care Act. People have been reporting the most amazing things; An uncovered $1,935 “facility fee” for a covered preventive colonoscopy left one consumer feeling robbed, Kaiser Health News reports.

This is the new world of health care: not just for people with an Affordable Care Act plan, but also for people who are getting higher financial responsibility with their new high-deductible plans.

You’ll have to take charge, and there are tools and tips out there, like Wellero, like clearhealthcosts.com, and others.

“Now the burden is on me to use all the resources available to leverage my plan to the maximum,” Freiwat said. “Get value and be a good consumer with the hard working providers whom (you) trust with (your) health.”