A question on HSA meds

[noelm]

Since our family went on HSA-type insurance, my meds cost a lot. I can get cheaper using goodrx.com coupons but those expenses do not contribute towards the deductible.

I started buying using goodrx coupons. Now DW has to visit the doc for possible GERD or H. Pylori infection. The doc will perform endoscopy which will cost about $600 or so. The total expenses are expected to be around $1200. We have already contributed $1600 this year. The deductible is $4000/calendar year. Hence, DW's stand is, we should not buy meds using goodrx and pay the higher price using our insurance card.

Her argument is, since we pay for it, why not use it. Its use it or lose it. Irrespective of the use, the premium is going to go up next year for sure. My argument is, lesser we use, lesser the possibility of % increase. I am not too sure if my argument holds any truth but I made that argument after reading some of the comments on many forums, including this one.

Could you guys please comment on what you would do in this case? Would you pay up more just to meet the deductible or you will try to keep insurance usage low?

Thanks in advance.

P.S. - I am sorry if this question sounds stupid but it ended up in an argument in the morning (because none of us really know and were trying to prove the point to each other).

 

[Mulligan]

My opinion would be to do what saves you the most money for the calendar year. If spending to the deductible does, you can use the coupons next year and not purchase them, unless there is an expiration date. Health insurance isn't the same as individual car insurance where utilization directly determines your premium cost. Doesn't sound like your total expenses either way would cause the groups rate to go up. It's your insurance and you have the right to use it in the manner that best benefits you.

 

[Buckeye]

As far as I know (as fellow HD policy owner), rates of your current policy are not affected by your claims history. Your claims history affects the rates of a new policy should you decide to go shopping for another policy.

Be sure to check out Costco if she will need over the counter GERD meds.

 

[Animorph]

My opinion would be to do what saves you the most money for the calendar year. If spending to the deductible does, you can use the coupons next year and not purchase them, unless there is an expiration date. Health insurance isn't the same as individual car insurance where utilization directly determines your premium cost. Doesn't sound like your total expenses either way would cause the groups rate to go up. It's your insurance and you have the right to use it in the manner that best benefits you.

+1. That's my understanding.

If you are likely to exceed the deductible, it will cost you $4k if you buy all drugs on the plan. If you buy coupons it will cost you $4k + coupon cost for the year. If you don't exceed the deductible, then the lowest drug cost would be the best. Either way, there is a risk that you do or don't exceed the deductible and spend more than you had to.

Your individual expenses make no difference to your premiums.

 

[pb4uski]

Your premium is a sunk cost at this point, so unless you expect to exceed your deductible where the insurance would kick in, it would be better to get the cheaper Rx. The use it or lose it doesn't make sense in this situation - whatever results in the least total cost is the way to go. The savings will stay in your HSA for the future.

I actually have an even more radical idea for you though which is what I have done for the last 3-4 years. Don't use your HSA to pay any of these costs - use taxable funds and let the HSA build tax-free (as long as you spend the balance on qualified health costs later in life). If you do this your HSA effectively becomes similar to a Roth IRA except the balance can only be used for medical expenses. I keep a running file of qualified medical expenses that I have paid for since I have had my HSA and could do a tax free withdrawal for that total at any time of my choosing - in the meantime the account is compounding tax-free.

BTW, when you say that the goodrx.com don't contribute to the deductible, you are talking about the cost of the coupons and not the meds, right? I would think that the cost of the meds should count towards the deductible whether you buy the meds within or outside the plan, it is just that if they are bought outside the plan you would need to provide the insurer with proof of your purchases to get those costs counted towards the deductible..

Since our family went on HSA-type insurance, my meds cost a lot. I can get cheaper using goodrx.com coupons but those expenses do not contribute towards the deductible.

I started buying using goodrx coupons. Now DW has to visit the doc for possible GERD or H. Pylori infection. The doc will perform endoscopy which will cost about $600 or so. The total expenses are expected to be around $1200. We have already contributed $1600 this year. The deductible is $4000/calendar year. Hence, DW's stand is, we should not buy meds using goodrx and pay the higher price using our insurance card.

Her argument is, since we pay for it, why not use it. Its use it or lose it. Irrespective of the use, the premium is going to go up next year for sure. My argument is, lesser we use, lesser the possibility of % increase. I am not too sure if my argument holds any truth but I made that argument after reading some of the comments on many forums, including this one.

Could you guys please comment on what you would do in this case? Would you pay up more just to meet the deductible or you will try to keep insurance usage low?

Thanks in advance.

P.S. - I am sorry if this question sounds stupid but it ended up in an argument in the morning (because none of us really know and were trying to prove the point to each other).

 

[mpeirce]

I actually have an even more radical idea for you though which is what I have done for the last 3-4 years. Don't use your HSA to pay any of these costs - use taxable funds and let the HSA build tax-free (as long as you spend the balance on qualified health costs later in life). If you do this your HSA effectively becomes similar to a Roth IRA except the balance can only be used for medical expenses. I keep a running file of qualified medical expenses that I have paid for since I have had my HSA and could do a tax free withdrawal for that total at any time of my choosing - in the meantime the account is compounding tax-free.

+1

The first year that we had an HSA we used it to pay for medical expenses. Then our CPA noticed this and pointed out that it's better to use it as pb4uski
suggests. So that's what we've been doing.

I don't expect it will be hard to find medical expenses to spend it on later in life.

 

[pb4uski]

+1

The first year that we had an HSA we used it to pay for medical expenses. Then our CPA noticed this and pointed out that it's better to use it as pb4uski
suggests. So that's we've been doing.

I don't expect it will be hard to find medical expenses to spend it on later in life.

Actually, believe it or not, my employer was the one who suggested using it like a surrogate for a Roth. While I agree it shouldn't be hard to find medical expenses later in life I still like to keep my file of medical expenses and receipts in case I ever want to just take money out to use.

 

[Mulligan]

Actually, believe it or not, my employer was the one who suggested using it like a surrogate for a Roth. While I agree it shouldn't be hard to find medical expenses later in life I still like to keep my file of medical expenses and receipts in case I ever want to just take money ut to use.

That is what I am doing. I have a folder that I toss my bills into to save in case I want to withdraw tax free, but that is not my current plan. Right now the past 4 years all I have are dental cleaning expenses, but even they will add up over time. Ultimately when this balance gets larger, I am going to have to decide if I want to invest some of this HSA money in mutual funds, or just let it continue to build in a low interest bearing account.

 

[kramer]

As an aside, treating H. Pylori is expensive (4 drugs taken simultaneously), and also diagnosing it because of the endoscopy. Here in the Philippines, if the symptoms are ambiguous (which is normal), they will treat you for GERD first (medication plus diet change, 5 or 6 week treatment length) and only if that does not work will they do the H. Pylori tests. Also, most people with H. Pylori have no symptoms, it only negatively affects a minority of people who have the bacteria for unknown reasons.

They take this approach because they are cognizant here of the treatment cost. It seems like in the USA with third party insurance payers, the cost does not matter so they do everything immediately.

I recently helped someone here who has long term stomach problems with what I thought was H. Pylori. But the doctor suggested an approach like I wrote in the previous paragraph, just treat GERD first. It turned out that it was just GERD. The total costs for 3 doctor visits, an HBT ultrasound to rule out gall stones, all medications (PPIs, vitamins, etc) was under $200.

I am not an expert, just passing on what I learned.