It isn’t always possible to plan your health care expenses. After all, life happens and an emergency might cause you to shift your budget from one expense to another. But as we age, we often know there are certain health care expenses that need to be made in a calendar year.
For example, you may know you have cataracts and that eye surgery is something you’re planning for in 2024. Likewise, you may need a new knee or hip, which is also something you will likely plan and budget for. And, if you know you’ll need new hearing aids, it’s a good idea to add them to your healthcare expenses for the coming year.
Here are some tips to help you make the most of your healthcare dollars in 2024:
Know your deductibles and maximum out-of-pocket expenses.
There are several different types of expenses that are important to be aware of in your insurance plan.
Deductible
The feature most people are familiar with is their health insurance deductible. This is the amount of money you have to pay toward the cost of your healthcare bills before your insurance company begins to help cover your costs. Deductibles can range from hundreds to thousands of dollars, depending on your insurance plan and they typically renew every calendar year. So, if you met your deductible in 2023, you’ll have to meet a new deductible in 2024 before insurance begins to cover your medical expenses.
Co-insurance
Even after you’ve met your deductible though, you’re not off the hook. Your insurance plan likely includes co-insurance. This is a fixed percentage you pay for medical expenses after the deductible is met. For example, if your coinsurance is 80/20, a very common formulation, it means that your insurance pays 80% and you pay 20% of the bill after you’ve met your annual deductible.
Out-of-Pocket Maximum
Your health insurance also includes a cap for your total out-of-pocket expenses. The out-of-pocket maximum is the highest amount you will be required to pay annually and includes all deductibles, co- payments, and co-insurance.
After you meet the out-of-pocket maximum for the year, all charges, including your co-pays and co-insurance, will also stop; your insurer will cover all of your medically necessary in-network costs for the rest of the year.
Insurers and plans have specific out-of-pocket maximums. Typically, plans with higher premiums have lower maximums, and less expensive plans have higher maximums.
You also should be aware that the Affordable Care Act (ACA) requires health plans to limit a single individual’s total out-of-pocket spending (for in-network care), in a given year, even if that person is covered by a family plan that has a family deductible.
According to healthcare.gov, for 2024, the upper limit for a marketplace plan is $9,450 in out-of-pocket costs for an individual, including deductible, co-pays, and co-insurance, and $18,900 for family plans.
In-network and Out-of-network Providers
A couple of other key words to be aware of when dealing with your insurance plan are in-network and out-of-network providers. In-network providers are medical professionals who are contracted with your insurance company to provide care to their patients for a specific rate. Typically, your insurer will cover a larger percentage of your care when you see an in-network provider.
An out-of-network provider is a provider who doesn’t have a contract with your insurance company to provide care for their patients. The patient can choose to see an out-of-network provider, but that option comes at a higher cost. For example, if your plan covers 80% of the cost of a procedure when it’s performed by an in-network provider, it may only cover 50% of the cost when you see an out-of-network provider, or it may not cover anything at all. That’s why it’s important to ask if your healthcare provider participates in your insurance plan and understand your options. Sometimes, you can pay privately for services at a lower out-of-pocket cost.
Adding to confusion regarding these costs is the fact that traditional Medicare, plus supplemental plans, and Medicare Advantage plans are all structured differently.
Check Your Plan Carefully
The bottom line is that you need to be familiar with your individual insurance plan, and set aside enough funds to pay for your out-of-pocket maximum in any calendar year so there are no surprises. Don’t assume that just because you have a plan, everything will be paid for. Familiarize yourself with your plan’s:
- Deductible
- Co-insurance
- Out-of-pocket maximum
- In-network provider coverage
- Out-of-network provider coverage, if any
If you are planning for a surgery, such as a knee or hip replacement, be sure you know how much you will be responsible for. If you also need hearing aids and your plan provides a benefit, it’s a good idea to meet other major health expenses before making that purchase. Premium prescription hearing aids can cost more than $5,000 a pair, but if your insurance has a benefit to help cover them once your out-of-pocket maximum is met, this can significantly reduce your out-of-pocket expenses and help with your budget.
Flexible spending accounts (FSAs) and healthcare savings accounts (HSAs) also can help you stretch your healthcare dollars.
Shop Smart!
If you are considering purchasing new hearing aids in 2024, be sure to contact the clinic where we see you. We work with a larger number of insurers in the greater Kansas City area, including the northeast region of Kansas and northwest region of Missouri. Our team also specializes in verifying your insurance coverage and will provide you with a detailed best estimate of your financial responsibility before you make a purchase.
