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]

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]

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]

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]

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]

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]

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]

+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]

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]

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]

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]

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]

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]

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]

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]

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

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.

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.

 

[dgoldenz]

Very interesting....have never heard that before. I'd shy away too if that's the case.

 

[MooreBonds]

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 also have had (and continue to have) an individual HD policy, and it's worked the same, whether it was a doctor's visit (Primary or specialist) or even an mRI (a CYA/just in case move which thankfully turned out to be nothing). Just show your card with your current plan info, and they will bill the insurance company, they send you an EOB (the infamous "THIS IS NOT A BILL"/Explanation of Benefits), and you would later be billed direct by the provider with the network rate, and pay the provider direct.

As always, verify beforehand if your provider is in your HDHP network! Same caveats apply whether an HDHP or traditional policy on going to a hospital and being seen by several providers, some of whom may not technically be in the network.

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.

Likewise, I am also doing this, but now I am at a crossroads - I have diligently been socking away the max each year since HSAs first started, and now my balance is over $31k (as it turns out, my HSA account actually had kickass returns over the past few years, compared to my other accounts seesawing all over the place).

Since I'm only 35, and have miniscule healthcare expenditures, I am tempted to continue to put away the max each year for the tax deduction, and just let it ride and take it out at age 65 with simple income taxes (barely earn too much to qualify for a ROTH). However, with my luck, by the time I turn 65, they'll change the tax laws and hit me up with more taxes. So it's a bit of a gamble.

For the other posters at HSA Bank, I also have my account with HSA Bank, which allows you to have an investment account with TD Ameritrade.

Now that I look at the TD Ameritrade account title, it says
HSA BANK AS CUSTODIAN FBO MOOREBONDS

Hmm...hadn't fully realized the implications of that ownership structure. I suppose it could be susceptible to some shenanigans at HSA Bank...my employer just started offering an HSA account, and it's with HSA Bank, so I'll be adding to my contributions through my employer, so I'll be keeping it there for the time being....

 

[Mulligan]

MooreBonds said : Likewise, I am also doing this, but now I am at a crossroads - I have diligently been socking away the max each year since HSAs first started, and now my balance is over $31k (as it turns out, my HSA account actually had kickass returns over the past few years, compared to my other accounts seesawing all over the place).

Since I'm only 35, and have miniscule healthcare expenditures, I am tempted to continue to put away the max each year for the tax deduction, and just let it ride and take it out at age 65 with simple income taxes (barely earn too much to qualify for a ROTH). However, with my luck, by the time I turn 65, they'll change the tax laws and hit me up with more taxes. So it's a bit of a gamble.

For the other posters at HSA Bank, I also have my account with HSA Bank, which allows you to have an investment account with TD Ameritrade.

Now that I look at the TD Ameritrade account title, it says
HSA BANK AS CUSTODIAN FBO MOOREBONDS

Hmm...hadn't fully realized the implications of that ownership structure. I suppose it could be susceptible to some shenanigans at HSA Bank...my employer just started offering an HSA account, and it's with HSA Bank, so I'll be adding to my contributions through my employer, so I'll be keeping it there for the time being....


Good for you on your nice HSA balances! I know government rules can change but if they dont, you keep this pace up and " health care expenses and medicare premium cost" may not even have to be a budget item for you in retirement. I just got started in HSA's at 45 ( now 47), so Im trying to build from scratch. 2014 Healthcare changes may have impact depending on your HSA plan, so may want to consider fully funding until then, as your opportunity may be limited after that once the rules are all determined. Im sure you know this but keep every reciept that is HSA deductible that you dont immediately use and " cash them in" to avoid taxes when you decide after retirement to pull money out.

 

[Mulligan]

For those who have HSA's and are interested in the possible changes HSA's may face in 2014, here is a thorough, but readable article. The reason why any changes are not in concrete terms is because the legislation is so broad and sometimes silent on this issue. So regulatory interpretation may determine ultimate outcomes. The article did suggest that repeal is highly unlikely but some legislative changes are possible.

https://www.hsaresources.com/pdf/the-impact-of-health-reform-on-hsas.pdf