Don’t let the flip of the calendar be the sound of you losing money – in the form of your insurance deductible(s).
In 2018, the average annual premium for employer-based family coverage rose five percent (5%) to $19,616; for single coverage, premiums rose three percent (3%) to $6,896.
Insurance coverage is expensive, which is why it pays to be savvy when it comes to maximizing your use of it – especially at the end of the year.
6 Year-End Tips to Make the Most of Your Insurance
The annual “Use it or Lose it” campaigns have officially kicked-off as we enter into the last month of the 2018 calendar year. Retailers and other beneficiaries who make a profit when you use your insurance are encouraging everyone to: “Use your insurance benefits before December 31st or you could lose them!” And while they most certainly have their own agenda – go walk around your local mall and you’ll be sure to see every optical chain advertising, “Use Your Benefits And Book An Eye Exam Today!” – but they make a great point.
Insurance companies make the most from the people they provide coverage to when benefits go unused.
As The Washington Post explains, it:
“Most Americans are pretty healthy and a few are really sick.
The top 1 percent of health-care spenders use more resources, collectively, than the bottom 75 percent, according to a new study based on national surveys. Slice the data a different way, and the bottom half of spenders all together rack up only about 3 percent of overall health care spending — a pattern that hasn’t budged for decades. This creates a fundamental inequality in the country’s health spending that is the crux of the challenge policymakers face: They need a system that works for people who are ill, but is attractive to those who are healthy and spend little on health care.”
Today’s health insurance comes in so many forms and three-letter acronyms – HSA, FSA, HRA – people don’t know all of the intricacies of their plans, let alone how to maximize their coverage.
For those looking to close out 2018 by making the most of their insurance cost and coverage, here are a few scenarios and tips to keep in mind:
- Scenario: It’s December, and you’re a long way from reaching your deductible.Tip: When it’s the end of the year but you’re still nowhere near meeting your deductible, one way you can get the most value out of your health insurance is to take advantage of preventative services, like annual physicals, mammograms, dental cleanings (if you also have dental insurance) and eye exams (if you have vision coverage). These are usually accompanied by little-to-no out-of-pocket expenses, although you will most likely have a co-pay, and these regularly scheduled appointments can be good to get in so you can start the new year off with any additional appointments or follow-up procedures that come from them.
- Scenario: You’re still nowhere near meeting your deductible, but you need to have a non-emergency procedure performed.Tip: Don’t have it done this year. Scheduling the procedure for next year will mean you’ll have the chance to maximize your deductible and make the most of your insurance plan in 2019. I only recommend this if 1. The procedure is truly a non-emergency, 2. You’re really nowhere near meeting your deductible and 3. If you anticipate your insurance coverage staying the same, meaning you won’t be missing out on some 2018 benefit or be less covered in some way next year. Scheduling the procedure for next year will allow you to start off 2019 with a big dent in your deductible. Plus, it will give you more time to budget for what you will have to pay to have the procedure done.
- Scenario: It’s the end of the year, and you have money in your health savings account.Tip: This is a good thing. HSAs roll over year to year and they function similarly to a 401(k), meaning the money is yours to keep. Think of your HSA as your personal investment in your future healthcare needs. There’s no need to spend these funds this year to maximize your insurance coverage. Plus! HSAs are tax-deferred so you won’t be paying taxes on the money put into the account.
- Scenario: It’s the end of the year, and you have money in your flexible spending account.Tip: Spend this money! FSAs are the quintessential “use it or lose it” examples that make health insurance companies richer when you don’t. If you don’t have any foreseeable medical expenses, consider using your FSA for a second pair of glasses, for a refill on contacts, dental work, prescription refills – anything, really. It’s your money to spend. You could also consider using your FSA to go towards alternative year-end treatments, like acupuncture for instance or going to see a chiropractor.
- Scenario: It’s the end of the year, and you have money with your employer in a health reimbursement arrangement.Tip: Here’s the thing, HRAs are managed by your employer, which means to answer this question you’ll need to ask yourself if you plan on being at the company for the full year next year. If you don’t, then use these funds now. If you do, then like your HSA you can let this roll over to next year. HRAs are a way for your employer to help you pay for healthcare costs but because they’re managed for you there are stipulations you’ll want to make sure you’re aware of before you use these funds.
- Scenario: You’ve reached your out-of-pocket deductible for the year.Tip: Have every and any medical procedure done that you can think of – seriously! If you’ve paid your maximum deductible for the year, now is the time to schedule appointments and make the most of your insurance coverage. Keep in mind that not every medical procedure is covered by insurance, or covered in full, so take this tip and apply it within reason. Also, consider in-network versus out-of-network implications, but definitely start booking your December to get the most out of the insurance coverage you’ve already paid for.
If you found this article helpful, you might also like: “Cash for Christmas! And Other Insurance Company Ploys to Avoid This Time of Year.”