HSA (HEALTH SAVING ACCOUNT) PLANS – Understanding the new phenomenon employers are flocking to.
What is an HSA PLAN?
HSA plans were authorized a few years ago as an option to help curtail healthcare costs. The idea is that you (or your employer) will purchase a plan with a high deductible, then fund part or all of that deductible and place you in charge of how and where you utilize the money. If you do not utilize all of the money, it will roll over into an IRA which can help fund your retirement.
Who are they best suited for?
If you rarely go to the doctor, you will likely fund your retirement using this vehicle. If you go frequently, you are likely to use up the fund, be subject to the balance of the deductible and then you will be funded by the insurance carrier.
Types of plans
Most are either PPO or HMO, which may have different requirements and different networks. By staying in the network, you usually have lower costs; since the network has a fee schedule that participating doctors must abide by. Since the fees are generally dictated, and not negotiated, you may find out that not everything is as it seems when going to the doctor, so be sure to check out your plan thoroughly and understand your benefits.
Once you hit the deductible, your plan will either have a percentage of the total they pay until a maximum is reached or in some cases, a copayment like many plans we see today will kick in which you are responsible for each visit.
Access to the deductible funds your employer has set aside.
Many people new to HSA plans were used to going to the doctor, paying a copayment and then not caring much about the costs involved. HSA plans force you to be more involved with your care, with the recommendations of care and put you in charge of what you spend until the deductible since you are now spending your money, and not someone else’s. This changes everything, since you are more responsible for your wellbeing and the choices for what you require will demand more thought from you.
As a result, many people have put off procedures they may have had recommended. This sometimes results in people finding out that they never needed the procedure after all. Many people found this out during the recession.
On the other hand, many people are also putting off needed procedures or interventions. In our office, this has resulted in more costly care as the problem became more chronic and more complicated. In some surgical offices, from speaking with surgeons, some people have put off needed procedures only to require more costly care later on, and possibly a life threatening condition that was preventable had it been handled up front.
Many people are in plans that allow them to choose how the money is spent and more is being spent on complementary care providers such as chiropractors. It is amazing how HSA is changing the playing field. Do you go to the orthopedic for a knee problem and spend $300 for a consult, or see the chiropractor who looks at the mechanism that makes the knee hurt? These plans help to equalize the marketplace a bit.
How to work successfully with the realities of the HSA plan
1. Know your benefits. To get the most out of this, your doctor will bill you first, and then your plan. It is your responsibility to make sure the services you received are billed and credited properly. You need to watch for claim denials as well, since the insurer may deny care that should be covered, in the same ways they do now and if you do finally hit the deductible, it is now your problem so be sure to watch the bills as they come in.
2. Whoever is in network means less, effective care means much more. Beware of snake oil salesmen in healthcare. These prey on the elderly, and recommend many procedures and older individual does not need. They also prey on those who are younger as well. Some of these are in network doctors so referral is usually a helpful way to ensure you are more likely to get the best care. Even with a referral, the care needs to make sense and you still need to be comfortable with the doctor.
Often under HSA type plans, people feel free to use out of network providers. Sometimes this works out to be more affordable because the out of network provider is not willing to accept the often low reimbursement levels the plan allows for, especially is they offer a superior level of service. In the chiropractic realm, a doctor who resolves and offers a much better long term outcome in several visits, will in the long run be less expensive that the doctor who does the minimum under the current reimbursement constraints and requires twice the amount of visits and gets a poorer outcome. This is not unlike hiring a contractor for your home. Sometimes the lowest cost person will cut corners and leave you fixing problems created by their short cuts and in the end, you will pay more later eliminating any perceived value of the lower price.
HSA plans force doctors to offer value because people are forced to become consumers, rather than take direction as they did for years under the previous system. The more you know about healthcare, the better your decision making will be and the better the likelihood you will receive the best and most cost effective care.
3. Know how the funding works. A will run medical office will likely ask you for a credit card, your benefits card or verify the way the plan is funded. In our office, we are finding many people have never had this explained to them and we do whatever is necessary to get them to understand their responsibilities. These are the most common scenarios;
a. Funding cards – your employer may give you a debit card with the available funds for your care. They may on a plan with a $2500 deductible fund $2000. This means you have $2000 to spend. You may find out that you have to spend $500 before this funding is allowed. In other cases, you may find out that this funding is available immediately, and the final $500 is your responsibility. Speak with your employer or HR to fully understand your funding mechanism.
b. Insurance funding – Your carrier may automatically take the funds and pay the doctor, except, they do most of the work and pay the in or out of network fees to the provider. This is the easiest plan for you, and your provider. If you have this type of plan, the insurance company administrates the funds.
c. Personal responsibility – Some employers leave everything up to you. In these plans, most people find they have little direction and know they have a high deductible, but are not sure how to get the funds since they were never shown how. In order to make this work for you, you will have to collect all the explanation of benefits from all your doctor visits and submit them to the employer for reimbursement. They will reimburse you up to the amount they agreed to until you meet the deductible. At that point, you will pay either the percentage that your plan requires toward your care or the co pay as it is stated on your insurance card. Your doctor is likely to require you to pay them up front as you would any high deductible plan and it will be your responsibility to pay for the care and get reimbursed from your employer.
The intended effect of these plans will hopefully be to create smarter healthcare consumers who are more engaged in their care thus slowing or reversing the current healthcare cost spiral. Unfortunately, it does not correct many of the inefficiencies they have created which make us all pay more, the biggest being how they have defunded primary care, forcing them to refer problems rather than spend the time to help troubleshoot them, as they did years ago. This has fueled the growth of specialty healthcare and taken us away from the holistic point of view that is necessary to cost effectively avoid unnecessary tests and referrals to more costly providers. Technology does not make up for good diagnostic manual skills. All medical providers also need to learn more about the musculoskeletal system. The growing use of chiropractors by the medical system has kept some costs in check, due to their holistic point of view, however, it is the authors view that chiropractors are quite underutilized with regards to problems in the musculoskeletal system which overlap many problems that present as organ system malfunctions, hence the huge amount of medical tests that come back negative.
Let me know what you think. As always, I value your input.