How do HD insurance policies work?

[Corporate ORphan]

DH and I got a HD HSA insurance policy in May when our COBRA insurancefrom a mega company expired. How does a HD policy work when you go to the doctor? I have always given my insurance card and then they tell me my co-pay which I pay while I am at the doctor's office.

I need to go to a dermatologist (one I have never been to before) to get a cancer screening skin exam and to probably get a spot on my hand frozen off with liquid nitrogen.

I figure the deductible starts by calender year even though we started the policy in May so I was going to wait until January to go but wanted to make the appointment soon.

I plan to call BCBS in MO and see how it works but I thought I would see how people on the board handle this. I remember seeing a posting about someone who overpaid at the doctor's office but I can't seem to find it when I search for it. Will your insurance company tell you in advance how much it should cost

Thanks!

[MichaelB]

They don't all work the same, but generally, you pay 100% of the charge until the deductible is met, then only copay after that. Beginning this year, certain basic services, such as a yearly checkup and mandatory tests, are 100% covered. You should have a benefit summary that spells out exactly what you pay. Finally, the amount you pay is the negotiated rate the insurance company has agreed with the provider, not the list price.

[REWahoo]

I had a high deductible HSA BC/BS policy until going on Medicare this month. I paid nothing at the time of my appointment and waited until the doc ran the bill through BC/BS to determine the contract rate. The doc then sent me a bill for the approved amount for payment.

[dgoldenz]

Most doctors offices will not collect any payment at the time of the visit, then submit the claim to the insurance company and send you a bill afterwards with the adjusted cost. Some offices will still insist on a co-payment be made up front as a "deposit" if you will, to make sure you won't skip out on the bill. Just depends on the office.

[SkisALot]

Quote:

Originally Posted by REWahoo I had a high deductible HSA BC/BS policy until going on Medicare this month. I paid nothing at the time of my appointment and waited until the doc ran the bill through BC/BS to determine the contract rate. The doc then sent me a bill for the approved amount for payment.

I've had a HD for nearly 3 years and this is how I've always done it. If your insurance company has a web site, they might list common ailments and the negotiated charges in your area for them, but in my experience the doctors have always coded the visits the highest level (and therefore, most expensive) possible, so plan on paying at that level.

[pb4uski]

Quote:

Originally Posted by SkisALot I've had a HD for nearly 3 years and this is how I've always done it. If your insurance company has a web site, they might list common ailments and the negotiated charges in your area for them, but in my experience the doctors have always coded the visits the highest level (and therefore, most expensive) possible, so plan on paying at that level.

+1 You go to the doc and generally pay nothing during the visit, then they submit a bill for their services to the insurer. My bill from the doc typically shows the full retail price charged by the doc, a discount to bring the charge down to the negotiated charge and a balance equal to the negotiated charge.

[Gotadimple]

The term of your deductible is based on the effective date of your policy. You bought the policy with a May effective date, so the deductible is effective May 1 to April 30 of next year.

The deductible starting in January you are used to comes from the fact that your employer bought coverage starting at the beginning of a calendar year.

-- Rita

[dgoldenz]

Quote:

Originally Posted by Gotadimple The term of your deductible is based on the effective date of your policy. You bought the policy with a May effective date, so the deductible is effective May 1 to April 30 of next year. The deductible starting in January you are used to comes from the fact that your employer bought coverage starting at the beginning of a calendar year. -- Rita

Incorrect. Every individual market health policy I know of goes on a calendar-year basis. Some group policies go on a plan-year basis, and it's usually the employer's decision.

[travelover]

Quote:

Originally Posted by REWahoo I had a high deductible HSA BC/BS policy until going on Medicare this month. I paid nothing at the time of my appointment and waited until the doc ran the bill through BC/BS to determine the contract rate. The doc then sent me a bill for the approved amount for payment.

Same for me.

At the end of the year, I just add up my out of pocket expenses including dental, prescriptions, etc, fund my HSA for the out of pocket amount, then immediately withdraw the same amount. At tax time I report the contributions and deductions from the HSA.

[Mulligan]

Quote:

Originally Posted by travelover Same for me. At the end of the year, I just add up my out of pocket expenses including dental, prescriptions, etc, fund my HSA for the out of pocket amount, then immediately withdraw the same amount. At tax time I report the contributions and deductions from the HSA.

Im curious, Travelover, why you dont load up on the maximum amount and let it grow. To me the HSA is an excellent tax deal as it can be used tax free going in AND coming out. Im building mine up to the max and plan to use it tax free for medicare premiums and expenses after 65. If I build up more than what I need, I will keep all receipts and pull a chunk out down the road. I know investment costs and rates arent outstanding, but double tax free is too compelling to pass up. I am moving mine to a local bank that pays 2.5%. Once receipts are built up, I can essentially use it as part of my emergency savings account if needed and justify the lower rate of return. Not criticizing at all, just curious why you are using it ts way.

[REWahoo]

Quote:

Originally Posted by Mulligan Im curious, Travelover, why you dont load up on the maximum amount and let it grow. To me the HSA is an excellent tax deal as it can be used tax free going in AND coming out. Im building mine up to the max and plan to use it tax free for medicare premiums and expenses after 65.

+1

[Mulligan]

Quote:

Originally Posted by REWahoo +1

It just hit me, if medicare premiums become sliding scale based on your income like it is starting to be discussed, it makes even more reason to max it out, as higher premiums equal even more tax savings if HSA is big enough to use for this purpose. I'm sure hoping they dont mess with HSA's and continue to allow the extra $1000 contribution at 55.

[travelover]

Quote:

Originally Posted by Mulligan Im curious, Travelover, why you dont load up on the maximum amount and let it grow. .........

I'm retired and am maxing out my Roth as long as DW works. I guess I could move cash from investments and into an HSA with a higher return....hmmmmmm

[REWahoo]

Quote:

Originally Posted by travelover I guess I could move cash from investments and into an HSA with a higher return....hmmmmmm

During the five years between going off COBRA and on Medicare I maxed out my HSA contribution by pulling funds from my traditional IRA each year and depositing them in my HSA account - tax free. I will now use those HSA funds to do what Mulligan suggested - tax free.

[MichaelB]

Quote:

Originally Posted by Mulligan Im curious, Travelover, why you dont load up on the maximum amount and let it grow. To me the HSA is an excellent tax deal as it can be used tax free going in AND coming out. Im building mine up to the max and plan to use it tax free for medicare premiums and expenses after 65. If I build up more than what I need, I will keep all receipts and pull a chunk out down the road. I know investment costs and rates arent outstanding, but double tax free is too compelling to pass up. I am moving mine to a local bank that pays 2.5%. Once receipts are built up, I can essentially use it as part of my emergency savings account if needed and justify the lower rate of return. Not criticizing at all, just curious why you are using it ts way.

We are doing this but it is not so easy.

HSA accounts have high fees and most don't have good investment options. Like IRA's, it takes many years of contributions to build balances to a level where they make a measurable difference in your portfolio. In the meantime, IRA custodians are safer institutions like Vanguard, while HSA custodians are institutions that have no meaningful safety for depositors and are in an under-regulated part of the US financial universe. We lost our first 3 years of HSA savings to the thieving executives of Canopy Financial. Even members with investment accounts and audited balances in funds lost or were frozen. The fact that almost all HSA accounts offered are in subsidiary institutions is a matter of concern.

[dgoldenz]

Quote:

Originally Posted by MichaelB We are doing this but it is not so easy. HSA accounts have high fees and most don't have good investment options. Like IRA's, it takes many years of contributions to build balances to a level where they make a measurable difference in your portfolio. In the meantime, IRA custodians are safer institutions like Vanguard, while HSA custodians are institutions that have no meaningful safety for depositors and are in an under-regulated part of the US financial universe. We lost our first 3 years of HSA savings to the thieving executives of Canopy Financial. Even members with investment accounts and audited balances in funds lost or were frozen. The fact that almost all HSA accounts offered are in subsidiary institutions is a matter of concern.

Health Savings Account - HSA Administrators offers Vanguard funds for HSA's

[MichaelB]

Quote:

Originally Posted by dgoldenz Health Savings Account - HSA Administrators offers Vanguard funds for HSA's

Who regulates HSA Administrators? There is no shortage of HSA offerings such as the one you link - but they are little regulated. These are not banks and OCC is not involved.

[dgoldenz]

Quote:

Originally Posted by MichaelB Who regulates HSA Administrators? There is no shortage of HSA offerings such as the one you link - but they are little regulated. These are not banks and OCC is not involved.

I would think you'd own the shares that you invested with Vanguard, no? They are even endorsed on Vanguard's website. Haven't invested with them myself, but I can't imagine the administrator would own the shares and you are just giving them your money....if that was the case, then I'd agree.

[Mulligan]

Quote:

Originally Posted by MichaelB We are doing this but it is not so easy. HSA accounts have high fees and most don't have good investment options. Like IRA's, it takes many years of contributions to build balances to a level where they make a measurable difference in your portfolio. In the meantime, IRA custodians are safer institutions like Vanguard, while HSA custodians are institutions that have no meaningful safety for depositors and are in an under-regulated part of the US financial universe. We lost our first 3 years of HSA savings to the thieving executives of Canopy Financial. Even members with investment accounts and audited balances in funds lost or were frozen. The fact that almost all HSA accounts offered are in subsidiary institutions is a matter of concern.

Mine is FDIC insured, but I have mine in a bank, granted its only 2.5% but its tax free. You are correct in that it takes a few years to build up a meaniful stache, but the double tax savings, to me anyway, is worth way more than reaching into the market for gains above this benefit, plus the 2.5% tacked on. I would be p#^#ed off if some company stole 3 years of my HSA money!

[MichaelB]

Quote:

Originally Posted by dgoldenz I would think you'd own the shares that you invested with Vanguard, no? They are even endorsed on Vanguard's website. Haven't invested with them myself, but I can't imagine the administrator would own the shares and you are just giving them your money....if that was the case, then I'd agree.

Like I said previously

Quote:

Originally Posted by MichaelB Even members with investment accounts and audited balances in funds lost or were frozen. The fact that almost all HSA accounts offered are in subsidiary institutions is a matter of concern.

Turns out the investment accounts really belong to the custodian. The bankruptcy trustee has been very clear that if there is any recovery, the balance in the investment account is treated the same as the fraudulent balance in the savings account.

Quote:

Originally Posted by Mulligan Mine is FDIC insured, but I have mine in a bank, granted its only 2.5% but its tax free. You are correct in that it takes a few years to build up a meaniful stache, but the double tax savings, to me anyway, is worth way more than reaching into the market for gains above this benefit, plus the 2.5% tacked on. I would be p#^#ed off if some company stole 3 years of my HSA money!

So was mine - FDIC insured. Problem, is, FDIC insures for bank failure but not malfeasance, incompetence, theft, etc. I now use HSA Bank, which is owned by Webster Bank, but am still unsettled by the need for a subsidiary and once again am thinking of changing. Problem is, most institutions are very unhelpful when it comes to sharing exactly how they are constituted and regulated and most give the appearance of being banks when they are not.