New year. New health insurance policy. New out-of-pocket medical expenses? If it seems like your healthcare costs keep increasing year after year, it’s because they probably are — and it’s likely they will continue to do so.
Personal healthcare spending is projected to grow an average of 5.5% per year over 2018 to 2027, according to estimates from the Office of the Actuary at the Centers for Medicare & Medicaid Services and published by Health Affairs. It’s expected that a 2.5% average growth in prices will account for nearly half this growth.
As we begin a new year (and a new decade) there are things you can do to strengthen your health insurance coverage and your health in 2020 and beyond. These five tactics may help you bolster your personal healthcare benefits, lessen your out-of-pocket healthcare spending, and encourage you to seek preventive care and visit your doctor before illnesses become potentially more severe and costly.
1. Look into adding supplemental insurance
If you’re like a lot of people, you probably put a lot of focus on monthly premium when choosing a health insurance plan for 2020. Yes, it’s important to consider other costs such as deductible and copayments, but sometimes it comes down to enrolling in a plan with the lowest monthly premium or going uninsured.
Even if, for example, you receive premium tax credits that result in a $0 bronze plan premium, you still have a deductible to meet. The average bronze plan deductible for 2020 is $6,506. Silver plans with cost-sharing reductions have average annual deductibles ranging from $209 to $3,268. That means you could have to pay thousands of dollars out of pocket for healthcare before your plan benefits fully take effect.
Half of respondents in a 2019 poll conducted by the Kaiser Family Foundation and Los Angeles times said costs forced them or a close family member to delay a doctor’s appointment, not fill a prescription or postpone some other medical care in the previous year.
This type of financial strain is one reason supplemental insurance can be a helpful addition to your overall health benefits portfolio. When you have an accident or are diagnosed with a covered critical illness, supplemental plan benefits can be used toward your health insurance deductible and other out-of-pocket medical expenses, as well as things like childcare and everyday living expenses.
Supplemental plans are readily available online. You can shop around, gather quotes and enroll within just a few minutes.
2. Enroll in dental and, if you need it, vision insurance
Sure, you could pay out of pocket for dental and vision care, but you may actually save money by adding coverage. It sounds counterintuitive; however, these plans may cost you just a few dollars extra each month while providing you with low-cost or even no-cost preventive care as well as benefits for other services such as fillings, crowns and root canals. They may also help improve your overall health and well-being.
Americans with dental insurance benefits are more likely to go to the dentist, take their children to the dentist, receive restorative care and experience greater overall health, according to the National Association of Dental Plans.
The cost of dental work can vary greatly by region and provider. Some examples of typical costs without insurance are as follows:
- A standard office visit can cost anywhere from $50 to $350 or more.
- A standard teeth cleaning can cost $70 to $200 or more.
- Dental X-rays can cost anywhere from $20 to $250 or more.
- Filling a cavity without insurance can cost anywhere from $50 to $450 or more depending on materials used.
- Dental crowns can cost anywhere from $500 to $3,000 or more depending on materials used.
For just a few dollars a month in premium, dental plans can help reduce what you pay out of pocket for a range of services by as much as 100% for preventive care, 80% for basic procedures such as root canals, and 50% for major procedures such as crowns — your actual benefits will depend on the plan you select.
Likewise, a vision plan will help with the cost of exams, contact lens fittings, frames and more. Sometimes you can find bundled products that include dental benefits and vision discounts. Shop around for the coverage that best fits your dental and vision needs at a monthly rate within your budget.
3. Use telemedicine as much as possible
Pressed for time? Looking to curb your healthcare spending as much as possible but faced with the reality that even minor illnesses sometimes need medical attention?
Technology makes it easier than ever to skip the doctor’s office and opt for a telehealth visit instead. Telemedicine can be used to diagnose, treat and monitor a variety of health conditions from the comfort of wherever you are at the moment, and it’s becoming increasingly popular.
A FAIR Health study found telehealth claims increased 624% between 2014 and 2018, and previous research shows that 90% of patients would prefer telehealth visits to an in-person doctor visit.
Using telemedicine can be a big win for your wallet and your efficiency. You may pay less for telehealth visits than a doctor office visit, depending on your benefits. You may also save time that would otherwise be spent traveling to a clinic and sitting in the waiting room. Instead, you can receive care by phone or video chat from a place that’s convenient for you.
Check your health insurance policy to see if you have telemedicine benefits and, if so, what they are. Then, take advantage of them as much as possible.
4. Open an HSA if you have a qualifying plan
You may not expect many healthcare expenses in 2020, but it doesn’t hurt to set aside money just in case. As a matter of fact, doing so can actually benefit you financially this year as well as many years from now.
If you open a health savings account, the funds you set aside are not subject to federal income tax. You can use them to pay for qualified medical expenses such as dental treatment, hospital and physician services, mental healthcare and long-term care, among many others, as outlined by the IRS.
If you don’t need to use your HSA this year? No problem. Funds roll over year after year. You can even use them in retirement.
For 2020, the IRS contribution limits for HSAs are as follows:
- $3,550 for self-only plans.
- $7,100 for family plans.
Individuals who are 55 years of age or older can even make a “catch-up contribution” and set aside an extra $1,000 per year in their HSAs.
In order to use your HSA, you need to pair it with an HSA-qualified high-deductible health insurance policy.
As defined by the IRS, for the year 2020, an HSA-eligible plan is a high-deductible health insurance policy with:
- An annual deductible that is not less than $1,400 for self-only coverage or $2,800 for family coverage.
- Annual out-of-pocket expenses that do not exceed $6,900 for self-only coverage or $13,800 for family coverage.
Your health insurance plan must be marketed as HSA-compatible (or HSA-eligible). Even if your deductibles are high enough, if your health insurance plan isn’t designed to pair with an HSA, you won’t be able to save money in an HSA. You could still use existing HSA funds.
HSA-compatible high-deductible plans are available through employers, in the private individual market and through the ACA exchanges. If you aren’t sure your plan is HSA-compatible, contact your insurer to confirm.
5. Shop open enrollment later this year
Yes, your 2020 health insurance coverage just took effect, so it may seem premature to start thinking about health plan open enrollment for 2021. The truth is that it’s never too early.
As the year progresses and you use (or don’t use) your current health insurance plan, pay attention to whether or not it fits your needs and consider how your needs may change next year.
In the months to come, you could receive a new diagnosis that will require ongoing treatment. Or, maybe you’re thinking about starting a family or scheduling elective surgery. Those are just a few circumstances that would increase your out-of-pocket medical spending and may nudge you toward a plan with a lower annual deductible.
Bottom line: Your 2020 coverage may not be the best fit for 2021, so you’ll want to shop around and see what’s available when the time comes. You can always renew your current policy if it remains the best fit.
Paying attention and starting to plan ahead now could save you time in the fall. Some actions you can take include the following: Keep track of your healthcare expenses, get preventive care on schedule, pay attention to provider network changes and, to the best of your ability, anticipate future medical expenses.
As January unfolds, we set our intentions and solidify our resolutions for the year ahead. Incorporating some of the above tactics in your planning can help set you up for a winning year financially and health-wise.