It may seem odd at first to come up with a budget for something as important—and unpredictable—as your health.
But health care costs cause stress for people and their families, impacting health and wallets. According to a 2017 Gallup survey, 29% of Americans have held off on medical care because of costs.
So, coming up with a plan to manage health care spending makes good sense—no pun intended.
It doesn't have to be complicated, either. It really just takes five steps to create a plan, and you can use several tools at regence.com that can make it even easier.
Let's get started.
Do you have regular, monthly prescriptions? Do you expect your kids might get sick and you'll be taking them to the doctor a few times this year?
Chances are you can count on a number of regular medical bills every year. If you've been a Regence member for at least a year, you can check your explanation of benefits (EOB) statements for the past 12 months to see what you spent on doctor visits and procedures last year. Just sign in to your Member Dashboard and select EOB statements.
Also, you can call your pharmacy and ask for the amount you spent on prescriptions last year, so you can get an idea of what next year will look like.
What are your health-related plans this year? Budgeting for anticipated health costs—like starting a family or repairing that old knee injury, for example—can help you prepare now and even save money when the time comes.
Go to your Member Dashboard and select Cost Estimator to get a sense of how much a procedure like surgery or childbirth will cost. Remember, you need to sign in so the Cost Estimator can take into account your unique health benefits and provide a more accurate estimate.
You can also use the Cost Estimator to compare charges across hospitals and clinics. Scheduling a surgery at an ambulatory surgical clinic might cost less than scheduling it at a hospital, for example.
Stuff happens. It's hard to predict if your child will break an arm or your summer vacation will include a side trip to urgent care.
But you can plan on having something unplanned happen during the course of the year. Take a look at your overall budget and put some money aside for those health care costs you never expect.
At this point, you should have a good estimate of how much you're likely to spend in the coming year. Now it's time for a plan to start regularly putting that money aside.
If you're on a high-deductible health plan (according to the IRS, this is a plan with at least a $1,400 deductible for an individual or at least a $2,800 deductible for a family), you're able to open a health savings account (HSA).
HSAs have tons of benefits. The first is that you don't have to pay any taxes on money you put in your HSA. This lowers the income that's taxed by the government.
You can open an HSA yourself and put money into it. Or if your employer allows the option, you can deposit money into an HSA directly from your paycheck.
Many people like HSAs because all of the money you put in it rolls over from year to year, and you can hold onto it even if you change employers or health plans. HSA funds can be used for anything when you turn 65.
Many HSA accounts, such as those through HealthEquity®, come with a debit card that you can easily use to pay for out-of-pocket medical expenses.
HealthEquity is our preferred partner for HSA accounts. Through our tie to HealthEquity, you can have your claims information automatically sent to HealthEquity, so you can manage your account 24/7.
You also can set aside money using what's called a flexible spending account (FSA). FSAs provide similar income tax benefits to HSAs.
Unlike HSAs, FSAs are only available through an employer and can't go with you if you change jobs. Also, FSAs are a "use it or lose it" type of account because there is a limit to how much money you can roll over from year to year.
If your employer offers an FSA, you can open one regardless of the type of health plan you have.
There's a lot more to learn about HSAs and FSAs and how they can help you save money.
Okay, you have a health care budget now. So why the fifth step?
Because we know health care costs are a big concern. And, one of the best ways to control your health care spending is to get to know and understand how your health plan works.
There are three main parts of your health plan to pay attention to: deductible, network and copay or coinsurance.
- Deductible: In short, your deductible is the amount of money you must pay out of pocket before your benefits kick in. Exceptions are preventive care—think well-child visits and your annual physical—that's covered 100% when you use an in-network provider (more on that below). But most other types of visits will be your responsibility until you meet your deductible.
- Network: Your network consists of the doctors, pharmacies, clinics and hospitals we've worked with on your behalf to negotiate discounts on services. When you stay in-network, you benefit from those discounts, and once you meet your deductible, your plan pays more of the bill.
- Copay or coinsurance: Your copay or coinsurance (some plans have both, others just have coinsurance) is the amount you must pay for doctor visits and medical procedures—whether you've met the deductible or not. There's no copay or coinsurance for office visits covered by your preventive health benefits—again, those are covered 100% when you stay in-network.
We know this is a lot of information. Just consider the relief that comes with having a health care spending budget in place—and the power you'll have to make decisions that are good for your health and your bank account.
Don't hesitate to contact us if you have any questions.
HealthEquity is a separate and independent company that provides health savings account services for Regence members.
Regence receives an administrative fee for each HealthEquity integrated HSA. The fee allows for a high level of support and integration between Regence's health plans and HealthEquity health savings accounts.