MONEY Health Care

4 Smart Year-End Strategies for Maximizing Your Health Benefits  

Tray of dental instruments
Dental plans often have annual coverage caps. Have you used up yours yet? Peter Dazeley—Getty Images

In these winter months, don't overlook these valuable health perks—and the crucial deadlines for getting your money's worth.

The first and last months of the year can be the best time to use your health insurance benefits. Here’s how to make the most of four common scenarios:

You’ve Met Your Deductible

This is the amount you must pay for your own health care before your insurance starts covering a larger portion of the costs. If you’re close to that cut-off, consider a last-minute appointment, says Carrie McLean, director of customer care at online insurance exchange eHealth.com.

“If you’ve already met your deductible for 2014, or are close to it, medical care rendered before the end of the year may be covered at a lower out-of-pocket cost,” McLean says. “Conversely, if you expect to have a lot of health care expenses in 2015, you may want to schedule non-emergency medical care for early next year so you can fulfill your deductible as soon as possible.”

You Have Unused Dental Benefits

In most cases, dental coverage works differently from regular health insurance. This benefit is often capped at $1,000 to $3,000 annually, according to the American Dental Association. If you have unused benefits remaining, now may be the time to schedule a last-minute appointment, especially if you might need serious dental work soon. That way, you can spread the cost over both years and pay less out of pocket for dental care.

You Have an Leftover FSA Money

If you set up a flexible spending account, or FSA, through your employer as a supplemental benefit to your health insurance, you were able to contribute pre-tax money to it each year and use that money for qualifying health expenses. Now’s the time to check your balance.

Some FSAs allow you to roll over up to $500 of unused funds into the following year, or give you a 2 1/2-month grace period to spend the money, but many don’t. In that case, you’ll forfeit your remaining balance.

If you have funds left in your FSA, or you are over your rollover limit, it’s time to spend the money. The good news is that a lot of expenses qualify, starting with purchases you’ve already made. If you can prove it, you can reimburse yourself for health costs you paid earlier in the year, says Craig Rosenberg, benefits specialist at human resource firm Aon Hewitt.

“Check to see if there are any out-of-pocket health care expenses you haven’t submitted for reimbursement. It’s easy to forget co-pays, prescription drug expenses, or certain medical supplies,” says Rosenberg.

“December can be a good time to stock up on health supplies,” he adds, and that goes for a lot of expenses, from bandages to braces and more.

If your FSA has a grace period, you have until March 15, 2015 to use your 2014 funds. In that case, it might be a good idea to schedule checkups for January so the costs count toward next year’s deductible. Check your FSA summary of benefits first, because in some cases that grace period is only for vision and dental expenses.

You Have an HSA

Whatever you do, don’t confuse your health savings account, or HSA, with an FSA and hurry to spend it, Rosenberg says. “FSAs have ‘use-it-or-lose-it’ rules that apply each year, but HSAs do not,” he says. “Any funds in your HSA are yours to keep indefinitely, even if you change jobs.”

Some even look at HSAs as a retirement savings vehicle since the funds can be used to pay for Medicare premiums and medical costs in retirement. That’s a big deal: Fidelity Investments estimates that the average couple retiring this year will face $220,000 in medical costs in retirement.

You may even want to add funds to your HSA now, McLean says. “Maximize on your tax saving by funding [the HSA] fully before year’s end,” she says, but know the limit. The contribution cap for HSAs in 2014 is $3,300 for individuals, or $6,550 for families.

Lacie Glover writes for NerdWallet Health, a website that helps consumers lower their medical bills.

MONEY Health Care

5 Things You Need to Know for Today’s Health Care Coverage Deadline

Today is the deadline to buy individual health insurance if you want to have coverage on Jan. 1.

Since open enrollment began on Nov. 15, almost 1.4 million people have signed up for health coverage through the federal insurance exchange, and another 183,000 through state exchanges. With nearly 7 million people already participating, signups are on pace to meet the government’s projection of 9 million enrollees in 2015, according to the Kaiser Family Foundation.

If you’re one of the many who still need to enroll for 2015 coverage, here are five keys things you need to know before you visit your state’s health exchange website.

1. If you want health insurance on Jan. 1, you must enroll today. You still have until Feb. 15 to buy a 2015 plan, but you will have a gap in coverage if you enroll after today’s deadline. Coverage begins on Feb. 1 for people who enroll between Jan. 1 and Jan. 15. Sign up between Jan. 16 and the end of the month, and coverage won’t begin until March 1.

2. Some states are giving you more time and extending the deadline to get coverage by Jan. 1. For example, New York and Idaho’s exchanges will allow users to sign up until Dec. 20. To find out whether you’re eligible for an extension, visit your state’s marketplace exchange website through healthcare.gov.

3. You’ll be automatically re-enrolled if you bought on an exchange last year and do not renew coverage by today. If the health plan you signed up for is no longer offered, insurers can automatically enroll you in another policy similar to the one you have now. But you can opt out of any plan you’re automatically enrolled in and choose another up until Feb. 15.

4. Skip automatic enrollment and shop again, even if you liked your 2014 policy. The Department of Health and Human Services found that more than 70% of people who currently have insurance through the health law’s federal online marketplace could pay less for comparable coverage if they are willing to switch plans.

5. Costs have changed. Many plans will have out-of-pocket spending limits that are lower than the maximums allowed under the health law, according to an analysis by Avalere Health. But the tradeoff for those lower maximums may be a higher deductible, so be sure to pay attention to both figures when choosing your plan. You can also expect to see your premium change. Depending on where you live, that may be a good or bad thing. The premium for the second-lowest-cost silver plan in Nashville jumped 8.7%, while it dropped 15.6% in Denver, according to a study by the Kaiser Family Foundation.

MONEY Health Care

The Key Numbers to Look for When You’re Picking a Health Plan

pill bottle with numbered pills around it
Tim Robberts—Getty Images

Monday is the deadline to buy insurance if you want it on January 1. But don't shop solely on the premium. A new study finds that many exchange-sold plans have lower-than-expected out-of-pocket caps, a boon for some health care consumers. But deductibles are up.

Consumers shopping on the health insurance marketplaces will find many plans with out-of-pocket spending limits that are lower than the maximums allowed under the health law, according to an analysis by Avalere Health.

Seventy-four percent of 2015 silver level plans’ out-of-pocket spending caps are below the $6,600 spending limit allowed for individual plans and $13,200 maximum for family plans, according to Avalere, a consulting firm. The average out-of-pocket maximum for 2015 individual silver plans will be $5,853, says Caroline Pearson, a vice president at Avalere. Silver was the most popular plan type this year, selected by about two-thirds of enrollees.

After a policyholder reaches the out-of-pocket spending limit during the year, the insurer pays all the bills, unless, for example, they involve doctors and hospitals not in the health plan’s network.

The vast majority of other plans also feature lower limits on out-of-pocket spending—which includes deductibles, copayments, and co-insurance, but not premiums. Seventy-one percent of bronze plan spending limits were below the allowed maximum (with an average spending limit for single coverage of $6,381), as were 94% of gold plans (average limit, $4,458) and 98% of platinum plans (average limit, $2,145).

Avalere said the average spending limits for single coverage were in most cases close to those for 2014 plans: bronze ($6,330); silver ($5,877); gold ($4,443) and platinum, $2,795.

Avalere’s analysis included plans sold on the federal marketplace that serves 37 states, as well as data from the California and New York state marketplaces. Consumers have until Feb. 15 to enroll.

The tradeoff for lower out-of-pocket spending maximums may be a higher deductible, says Pearson. The average deductible for silver plans will increase 7% in 2015, to $2,658. Other metal-level average plan deductibles are increasing as well.

Higher deductibles are likely helping keep premiums low, and low premiums are what consumers are looking for, Pearson says.

For people who are generally healthy, a lower premium may be more attractive than a lower deductible. They’re never going to meet their deductible anyway, so they’d prefer to save on monthly premiums.

But for people with chronic conditions, “the lower out-of-pocket maximum helps you because you’re going to exceed your deductible no matter what,” says Pearson.

Kaiser Health News is an editorially independent program of the Henry J. Kaiser Family Foundation, a nonprofit, nonpartisan health policy research and communication organization not affiliated with Kaiser Permanente.

MONEY Ask the Expert

How to Pick a Medigap Policy That’s Right for You

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Robert A. Di Ieso, Jr.

Q: “I’m looking into Medigap insurance policies with very limited success. The information is very scarce. It is difficult to choose an insurance company. What criteria should I use to decide among carriers?” — Ray, Henderson, Nev.

A: Medigap, an insurance policy that supplements Medicare, helps pay for some of the medical costs that Medicare doesn’t cover, such as your co-payments, co-insurance, and deductible. Some policies even help with services Medicare doesn’t touch, like medical care outside the U.S.

You can choose from 10 standard Medigap policies, each named for a letter in the alphabet. The government mandates what features the 10 plans must offer, but the policies are sold through private insurers. (If you live in Massachusetts, Minnesota, or Wisconsin, the standard benefits on the Medigap policies sold in your state differ.)

Medigap Plan A is the most basic policy, while Plan F offers the most extensive coverage, picking up almost all of your out-of-pocket expenses. Plan F is also the most popular, accounting for 55% of plans sold, according to America’s Health Insurance Plans, the health insurance industry trade group.

The fastest growing Medigap policy, Plan N, is a newer option that has cost-sharing requirements but is typically less expensive than Plan F.

To shop for a Medigap plan, start with the Medigap policy search tool at the Medicare website. Enter your zip code, and you’ll see the standardized plans available to you, details about what they cover, the estimated costs, and a list of insurers selling those plans in your area. For price quotes, you’ll have to call each company directly.

Usually the only difference between same-letter policies is cost—and the price range can be shockingly large. According to a survey of rates by Weiss Ratings, the annual premium on a Medigap Plan F ranged from $162 to $5,674.

“I recommend that people get Plan F if they can afford it because it offers the most coverage,” says Fred Riccardi, client services director for the Medicare Rights Center. If you can’t swing a Plan F, pick the option that offers the most coverage within your budget.

Once you settle on a letter, you can shop on price alone. “Since the policy itself is standardized, premiums are really the only thing that will vary across insurance companies,” says Riccardi. “The only reason I see people go with a more expensive policy is if they prefer a certain insurance company.”

However, you do need to pay attention to the insurer’s pricing system too. Some plans are “issue age,” meaning the premiums rise with medical inflation. Others are “attained age” policies, with the price increasing each year with your age as well as medical inflation. You’ll also see “community rate” policies, which charge every policyholder the same premium regardless of age.

Attained age policies may appear to be the cheapest initially, but in the long run they could cost you more. “People should be aware that if they buy an attained age rated policy, their premiums will increase as they get older,” says Riccardi. “They may be better off considering a community rated or issue age rated policy if these options are available in their state.”

To get the lowest price and ensure that you won’t be denied, apply for a policy during the six-month open enrollment period that begins the month you turn 65, says Riccardi. Under federal law, insurers cannot deny you coverage during that window, and they must offer you the best available rates regardless of your health.

If you’re shopping for a Medigap plan outside of this window, you can be turned down or charged more for a pre-existing condition, unless you live in a state that offers extra consumer protections.

MONEY Debt

The Unknown Debt That’s Dragging Down Your Credit Score

pile of pills in dark lighting
Science Picture Co—Getty Images

A new report from the Consumer Financial Protection Bureau finds that 52% of all debt on credit reports is medical debt.

Even if you carry no debt on your credit card and pay your mortgage every month, another kind of debt might be ruining your credit: medical debt.

Almost 43 million Americans have overdue medical debt dragging down their credit, according to a new report from the Consumer Financial Protection Bureau. But 15 million of those people, by CFPB estimates, have no other dings on their credit. And debt collection agencies pursue fairly small medical debts: The average medical debt on a credit report is $579, and the median is just $207.

The scariest part? You may not know that you have a problem. “Many, many people don’t even know they have a bill—much less that it’s affecting their credit score,” says Christina LaMontagne of NerdWallet.

The CFPB attributes part of the problem to a debt collection practice called “parking.” The federal agency says some debt collectors will ding the consumer’s credit before even notifying the consumer that there’s an outstanding medical bill. “Parking” the debt where it can do the most damage motivates the person to pay it off quickly. Sometimes insurers ultimately pay the costs—after a consumer’s credit may have already suffered.

“This is viewed by some collectors as a way to minimize costs, but it is not how the system is supposed to work,” CFPB director Richard Cordray explained in a statement announcing the report. “And the collection process should not depend on harming consumers by adverse reporting before a consumer even learns she owes a medical debt. If it takes a drop in her credit score or an adverse action notice to make the point, then even more damage has been done to her financial standing.”

Even if debt collectors haven’t “parked” medical debt on your credit report, medical bills can be a vexing problem. Patients often struggle to learn the cost of their health care beforehand and understand their bills after the fact, LaMontagne says. A NerdWallet study found that 63% of Americans say they’ve received unexpectedly high medical bills. And bills are often wrong: In an audit of Medicare claims, NerdWallet found that 49% contained errors, resulting in an average 23% overcharge.

As a result, one in five Americans may be contacted by a collection agency about medical debt this year, by NerdWallet’s estimate. That’s why all consumers should be on guard. Here’s what to do to keep it from happening to you.

Control costs

Of course, the best way to avoid debt is to keep expenses low at the outset. But with medical costs, that’s easier said than done. The most important thing? Stay in network.

“Most of the very high charges I see are for people who inadvertently saw out-of-network providers,” LaMontagne says. “Print out the statement that says this doctor is in network and have that to protect yourself down the line.”

Also, if you know you’ll need a procedure like an MRI, shop around first. “Leverage price transparency tools whenever possible,” LaMontagne says. “People do see huge variations in prices.”

Save for high deductibles

While the Affordable Care Act has provided health insurance to an additional 10 million people, most Americans still get health coverage from their employers, and employers have been steadily raising deductibles, LaMontagne says. That means many consumers have to pay much more out of pocket before insurance covers the bulk of their costs. So more Americans may be hit with unexpectedly high bills.

But that doesn’t mean high-deductible plans are bad, LaMontagne is quick to add. It just means people with these plans need to shop around for procedures and budget for health care expenses by setting aside money in tax-advantaged savings accounts like a health savings account (HSA).

Ask for an itemized bill

“It’s really hard to read a straight bill as they usually come in the mail,” LaMontagne says. Luckily, you’re entitled to an itemized one.

When you get it, look for doctors and procedures you don’t recognize. Compare the bill against your explanation of benefits from your insurer to see if your insurance has been applied correctly.

If you think there’s a serious billing error, “call the doctor or call the insurance as your first line of defense,” LaMontagne says. But when all else fails, you can seek help from a professional medical bill advocate.

Check your credit report

Once a year, you’re entitled to a free credit report from each of the three credit bureaus: Experian, Trans­Union, and Equifax. So check every four months. Go to annualcreditreport.com to request your report. If you find an error, submit a dispute with the credit bureau.

Pay it off quickly

The good news: Fair Isaac, the company that creates FICO credit scores, announced earlier this year that medical debt will no longer drag down your credit score after it’s been paid off. Consumers with median credit scores and no other debt can expect to see their FICO score increase 25 points after paying off an overdue medical bill that’s been sent to collections.

So tackle medical debt quickly—it can make a big difference.

Read more:

MONEY Health Care

Act Fast to Get Health Insurance for Next Year—But Not Too Fast

pill bottles with money in them
Adrianna Williams—Getty Images

The deadline for buying individual health insurance for 2015 is days away. If you got a policy on an exchange last year, don't just automatically renew. With new insurers in the marketplace, you could save by taking the time to compare plans.

More than 70% of people who currently have insurance through the health law’s federal online marketplace could pay less for comparable coverage if they are willing to switch plans, officials said last week.

With a Dec. 15 deadline looming for coverage that would begin Jan. 1, current policy holders should come back to healthcare.gov to see if they can get a better deal, the officials said. They’ll find more plans available and nearly 8 in 10 current enrollees can find coverage for $100 or less a month, with subsidies covering the rest of the cost.

A Department of Health and Human Services analysis of 2015 individual market premium data for 35 of the states participating in the federal marketplace, or exchange, found that premiums for the lowest-cost silver plans will increase on average by 5%, while prices will increase on average by 2% for the second-lowest-cost silver plans, which is called the benchmark plan because subsidy levels are pegged to its cost. “The plans offering the lowest prices have sometimes changed from 2014 to 2015, so consumers should shop around to find the plan that best meets their needs and budget,” the report advises.

If they stay in their current plan, consumers may discover that their subsidy may not go as far if the price of the benchmark plan declined for 2015. “We strongly, strongly encourage people to come back to the website and shop,” marketplace CEO Kevin Counihan told reporters during a press call. Federal marketplace enrollees who do not switch plans by Dec. 15 will be automatically re-enrolled in their current coverage.

Those who don’t switch plans might see higher prices. “For the vast majority of people, if they stay in the same plan, I think they’ll see rate increases in the single digits to high single digits,” said Andy Slavitt, CMS principal deputy administrator. “That’s not going to be true for every individual. Some will go down, some will go up a little bit higher.”

The number of companies offering policies for next year has increased by 25%. Consumers can choose from an average of 40 plans for 2015, up from 30 in 2014, based on the HHS analysis, which examined plan rates at the county level.

Consumers have until Feb. 15 to enroll for coverage in 2015, the marketplace’s second year.

The HHS analysis, mirroring other reviews of 2015 premiums, shows that what consumers pay for coverage depends on where they live. In Juneau, Alaska, for example, a 27-year-old enrolled in the second-lowest-cost silver plan would pay $449 per month for coverage in 2015 before tax credits, a 34% increase from 2014. In Jackson, Miss., that same level of coverage would cost $253, or 24% less than $332 charged in 2014.

Kaiser Health News is an editorially independent program of the Henry J. Kaiser Family Foundation, a nonprofit, nonpartisan health policy research and communication organization not affiliated with Kaiser Permanente.

MONEY Health Care

5 Ways to Save on the Mental-Health Care You Need

Group therapy can be 50% less expensive than one-on-one sessions.

Get the treatment you need at a price you can handle.

Affordable mental-health care has been easier to come by in recent years. Insurance coverage, once riddled with onerous caps and restrictions, is now more widely available. “Things have gotten better for many,” says Andrew Sperling, director of federal advocacy at the National Alliance on Mental Illness.

Still, paying for care can be a challenge. The high out-of-pocket costs that you’re facing for all your health care extend to behavioral coverage too. And low reimbursement rates and billing hassles have led many therapists to not take insurance. A study published last year in the journal JAMA Psychiatry found that only 55% of psychiatrists accept private insurance; for all other medical specialties, that figure is 89%.

Here’s what you need to know about finding the best treatment at the best price.

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MONEY

Insurance Options are Better

Under a 2008 law that took effect in 2010, health plans offered by large employers that include mental-health coverage must treat it like other medical care. So a plan can’t cap annual visits or impose prior authorization rules for behavioral health if it doesn’t do the same for other illnesses, says Jennifer Mathis, director of programs at the Bazelon Center for Mental Health Law. Co-insurance rates have to be the same too. As the graphic above shows, the parity law hasn’t discouraged employers from offering coverage.

Any individual plan you buy on a state insurance exchange must include mental-health coverage; it’s one of the 10 essential benefits required by Obamacare. The provision in the law that lets children stay on a parent’s health plan until age 26 is another boon, since most major psychiatric conditions show up in late adolescence or early adulthood, notes Debbie Plotnick, senior director of state policy at the nonprofit Mental Health America.

Medicare coverage is also better. As of 2014, benefici­aries are responsible for only 20% of mental-health costs, down from 50%.

Your Employer Can Often Help

Especially if you have a high-deductible health plan, start with your company’s employee assistance program, says Kathleen Mahieu, leader of behavioral-health consulting at benefits consultancy Aon Hewitt.

About three-quarters of employers offer an EAP. These programs typically provide five or six sessions of no-cost counseling, even for family members. That’s enough for some people to resolve their issues, says Katherine Nordal, the American Psychological Association’s executive director for professional practice. An EAP can help you find a provider or connect you with other mental-health resources. “It’s a one-stop shop,” says Mahieu. And, she adds, EAPs pride themselves on confidentiality. Your boss won’t know, and you don’t even have to give your name.

Your Bill is Negotiable

When your therapist isn’t in your insurance network, you’ll have to pay upfront and submit the bills for partial payment (assuming you have out-of-network coverage) or, if you’re in an HMO, pay in full. Even if you are reimbursed, you won’t get back, say, 70% of the bill. You’ll get 70% of what the insurer considers “reasonable and customary,” leaving you on the hook for the rest.

If you can’t find an appropriate provider in your plan, ask your insurer to negotiate what’s known as a single-case agreement with someone who’s not in your network, says Barbara Griswold, a licensed marriage and family therapist in San Jose. That would let you to pay the in-network rate.

You can also ask about a reduced fee, says Griswold. “Almost every therapist has a sliding scale,” she says. Be realistic about what you’ll be able to afford and how long you’re likely to want therapy.

You Have Other Ways to Save

A university with a graduate psychology program may have a clinic, says the APA’s Nordal. Care is provided by doctoral trainees who are supervised by licensed psychologists. In an urban area, you may be able to find postgraduate training programs in psychoanalysis or cognitive behavioral therapy for experienced psychologists, says Geoffrey Steinberg, a licensed psychologist in New York City. (Google “training clinic” and the specialty you’re looking for.)

Another option: Ask your therapist if your condition might benefit from group therapy led by an experienced psychologist, which can be 50% less expensive than one-on-one sessions. Says Steinberg, “Group is so underrated and can be so valuable.”

Know Which Treatment Is Best for You

“No single therapy works for everybody,” says Renée Binder of the University of California at San Francisco’s School of Medicine. Consider these approaches for five common conditions.

1. Mild to moderate depression: Go for cognitive behavioral therapy (CBT). “A therapist works with you to break negative thought patterns by teaching specific skills,” says Binder. You might learn, for example, to ID overly critical self-talk (“Everything I do gets screwed up”) and reframe it in a positive way (“I flubbed a presentation, but I know I can rock it next time.”)

2. Severe depression: Combining antidepressants with CBT is better than meds alone, a recent Vanderbilt University study found. You need to see an MD or a psychiatric mental-health nurse practitioner for the prescription, but you can get therapy from a social worker or a psychologist.

3. Social anxiety: Your best bet is either CBT or psycho­dynamic therapy (in which you explore how your past experiences and unconscious affect you). In a study published in July in the American Journal of Psychiatry, these methods were equally effective at easing social anxiety.

4. Panic attacks: CBT is usually the treatment of choice. Some research suggests psychodynamic therapy may also work: A Weill Cornell Medical College study found that 12 weeks of biweekly sessions significantly reduced symptoms in more than 70% of patients. Medications may also be used.

5. Trauma: Look for a therapist who offers trauma-focused CBT or EMDR, which stands for eye movement desensitization and reprocessing (you’re asked to recollect the event while doing a motor task such as side-to-side eye movements). “Antidepressants and anti-anxiety meds are helpful in the short term, but therapy works to change thought patterns long term,” says Binder.

 

MONEY Health Care

How I Averted a Medical Billing Disaster

taxi entering Emergency Room entrance
W. Steve Shepard Jr.—iStock

Being prepared and keeping good records can protect you from damage to your credit score.

Over Labor Day weekend, I fell and broke my hand. Seeing my finger dangling at an odd angle was alarming, not to mention painful, but I’ll confess the first words out of my mouth when I arrived at the ER were, “I want to confirm that you are a participating provider in my insurance.”

I have decent health insurance, but I’ll admit I border on paranoid when it comes to medical bills. I have heard numerous horror stories on the Credit.com blog from consumers whose medical bill nightmares have ruined their credit, often through no fault of their own. In fact, about half of all collection accounts on credit reports are due to medical bills, and medical debt often has a significant impact on credit scores.

I wasn’t about to take that chance.

3 Things I Did to Protect Myself

Sure enough, a few weeks later bills started rolling in from various providers. Although I spent only a few hours in the emergency room, I received bills from five different providers. And that doesn’t count the doctor and physical therapy bills from the services provided later.

Worse, the largest bill — the one from the ER — did not arrive until two months after my visit and after a lot of effort to hunt it down.

Although I was hampered by having my right hand in a cast (not ideal for a right-handed writer!) I was determined to stay on top of the bills as best as I could. I did three things:

  1. I reviewed my Explanations of Benefits from my insurance company online as they came in. EOBs explain which companies have billed the insurance company and how much the patient is responsible for.
  2. I did not assume that because I didn’t get a bill, all was OK. Three weeks after my visit to the emergency room, I still hadn’t heard a word from them. The EOB for the hospital visit was listed as “pending.” So I called the ER billing department to find out what was going on. They assured me it was in process.
  3. I kept good records. I started a file where I kept copies of bills, notes from phone calls, receipts etc.

Nevertheless, despite my careful efforts, I suspect I narrowly averted a potential disaster with the ER bill. Fifty-two days after the ER billed my insurance company, the claim was processed. But a week later, I still hadn’t received a bill. I called the ER’s billing department (it was surprisingly difficult to find the right phone number without a bill) and they could not find me in their system. They asked me to fax the EOB to them, which I did. Two days later I called again, and my bill couldn’t be located. I sent the EOB to them again, this time by email, and finally, that afternoon, I was told that they found my account and a bill was on its way.

Although it would have been nice to not have to pay for that visit, I know better. Even if they never sent me a bill, there was a distinct possibility I could hear from a collection agency down the road.

Medical Billing Frustration

gerri hand castThe experience still leaves me with a bad taste. Our medical billing system is far too complicated and convoluted. For all the talk of putting patients more in charge of their care, there is little opportunity to make informed decisions. One of the main things that irked me was my complete inability to confirm whether I received the services my insurance company and I paid for.

I was billed, and paid separately, for the doctor, the X-rays, a sling and a splint. That didn’t leave a whole lot besides the painkiller and warm blanket the nurse gave me when I started shivering. Yet the ER bill alone — not counting all those other services billed separately — totaled nearly $3,000. I requested an itemized statement of charges, but it was incomprehensible. For example, there are two charges of $264 each for “3 MCLSD TX FX PHALENGEAL W/M.” What the heck is that? I haven’t a clue.

Fortunately, insurance discounted the total significantly, but still, between my insurance company’s payment and mine, we did pay a large chunk of change and I’d like to know it’s accurate. I understand the ER must be prepared to treat all kinds of emergencies, and perhaps this is a toll to get through the door, but it is still hard to fathom how the bill can be that large. (Note: I know where the urgent care facilities in my area are and would have chosen one of them for less expensive care if the accident didn’t occur late on a Sunday evening.)

Besides the ER bill, some bills were mysterious, and I could not find anyone to explain them to me. For example, I received two separate bills for what appeared to be the splint provided in the ER (the same one my doctor later told me was a piece of junk and advised me not to use). When I tried to clarify it, I was bounced back and forth between the two companies. In frustration, I paid the bills to protect my credit.

I had no way of knowing — and still don’t — which companies would be billing me for what. I know I have paid all the bills that were submitted to insurance, but if there are others floating out there, I can only hope they reach me. That’s one reason why I use free credit monitoring tools to keep close tabs on my credit. If a bill does slip through the cracks and wind up in collections, I want to know about it right away. You can check your credit scores for free every month on Credit.com too.

In a month I was out of my cast and on to physical therapy. My hand will probably never be quite the same, but I consider myself lucky when I think of what patients and their families must go through when they are dealing with serious extended illnesses or accidents. How do they stay on top of all of this?

Given that a single collection account can drop your credit scores by 50, 75 or even 100 points, it’s worth trying to make the effort to get organized, stay organized and ask lots of questions. If you can’t handle it yourself, consider asking a trusted friend or relative to help, or consider hiring a patient billing advocate. Doing so may just save your credit.

Inset image courtesy of Gerri Detweiler

More from Credit.com

This article originally appeared on Credit.com.

MONEY Health Care

Why a Serious Medical Condition Could Cost You Even More Next Year

Pill container spilling out money
Last Resort—Getty Images

Health insurance plans are hitting you with higher out-of-pocket costs for the specialty drugs you may need, a new study finds.

Americans with health coverage–including those who buy it through government insurance exchanges and Medicare beneficiaries–are likely to pay more out-of-pocket next year for so-called “specialty drugs,” which treat complex conditions, according to two studies from consulting firm Avalere Health.

More than half of the “bronze” plans now being sold to individuals through federal and state marketplaces for coverage that begins in January, for example, require payments of 30% or more of the cost of such drugs, Avalere said in a report out Tuesday. That’s up from 38% of bronze plans this year.

In “silver” level plans, the most commonly purchased exchange plans, 41% will require payments of 30% or more for specialty drugs, up from 27% in 2014.

As the cost of prescription medications rise, insurers are responding by requiring patients to pay a percentage of specialty drug costs, rather than a flat dollar amount, which is often far less. Insurers say the move helps slow premium increases.

But “in some cases this could make it difficult for patients to afford and stay on medications,” Avalere CEO Dan Mendelson said in a written statement.

While there is no standard definition of such drugs outside of the Medicare program, they are often expensive medications used to treat serious, chronic illnesses, such as multiple sclerosis, rheumatoid arthritis, hemophilia, some cancers and hepatitis C. While lists of specialty drugs can differ by insurer and by policy type, drugs can include arthritis treatments Enbrel and Humira, cancer drugs Gleevec and Tarceva, hepatitis C treatment Sovaldi, and MS drugs, Betaseron and Copaxone.

While they add up to only about 1% of all prescriptions written, specialty drugs account for 25% of spending on all drugs—an amount expected to rise rapidly, according to various studies.

An earlier Avalere analysis found that for the first time since Medicare’s drug program began in 2006, all of the stand-alone drug insurance plans place some drugs into specialty “tiers.” Two thirds of those plans require patients to pay a percentage of the costs of drugs in those tiers, rather than a flat dollar payment. Medicare plans can place a product into a specialty category only if the price negotiated with the drugmaker exceeds $600 a month.

Increasingly, health plans –including those offered to people with job-based coverage – require hefty payments, sometimes 20% to 40% or more of the total cost of medications that insurers classify as specialty drugs. That’s a change from the flat dollar payments of $10 to $30 or $50 that many patients have become accustomed to for other types of drugs.

Source: Avalere

There is a limit to how much patients must pay, but it’s often high: Most policies have an annual out of pocket maximum, which is often several thousand dollars.

The new Avalere study looked at plans sold in the federal exchange and in New York and California, which run their own marketplaces.

Kaiser Health News is an editorially independent program of the Henry J. Kaiser Family Foundation, a nonprofit, nonpartisan health policy research and communication organization not affiliated with Kaiser Permanente. This article was produced by Kaiser Health News with support from The SCAN Foundation.

MONEY Health Care

Why a Popular Way to Control Health Care Costs Is Under Fire

businessman with blood pressure cuff on his arm
Eric Hood—iStock

Employers are increasingly turning to wellness programs to keep workers healthy. But a new lawsuit is challenging whether your boss can force you to get medical tests—or pay more for your health insurance.

Do it or else. Increasingly, that’s the approach taken by employers who are offering financial incentives for workers to take part in wellness programs that incorporate screenings that measure blood pressure, cholesterol, and body mass index, among other things.

The controversial programs are under fire from the Equal Employment Opportunity Commission, which filed suit against Honeywell International in October charging, among other things, that the company’s wellness program isn’t voluntary. It’s the third lawsuit filed by the EEOC in 2014 that takes aim at wellness programs, and it highlights a lack of clarity in the standards these programs must meet in order to comply with both the 2010 health law and the landmark Americans with Disabilities Act.

Honeywell, based in Morristown, N.J., recently got a reprieve when a federal district court judge declined to issue a temporary restraining order preventing the company from proceeding with its wellness program incentives next year. But the issue is far from resolved, and the EEOC is continuing its investigations. Meanwhile, business leaders are criticizing the EEOC action, including a recent letter from the Business Roundtable to administration officials expressing “strong disappointment” in the agency’s actions.

In the Honeywell wellness program, employees and their spouses are asked to get blood drawn to test their cholesterol, glucose, and nicotine use, as well as have their body mass index and blood pressure measured. If an employee refuses, he’s subject to a $500 surcharge on health insurance and could lose up to $1,500 in Honeywell contributions to his health savings account. He and his spouse are also each subject to a $1,000 tobacco surcharge. That means the worker and his spouse could face a combined $4,000 in potential financial penalties.

“Under the [Americans with Disabilities Act], medical testing of this nature has to be voluntary,” the EEOC said in a press release announcing its request for an injunction. “The employer cannot require it or penalize employees who decide not to go through with it.”

Honeywell sees the situation differently. “Wellness is a win-win,” says Kevin Covert, vice president and deputy general counsel for human resources at Honeywell. In time, the company expects to see lower claims costs while workers avoid health problems. Sixty-one percent of employees who participated in the company’s screening last year reduced at least one health risk, he says.

Further, Covert says, it’s easy for employees and their spouses to avoid the tobacco surcharge. Smokers can take a 15-minute online tobacco cessation course, while non-smokers can simply call up the health plan and certify that they don’t smoke.

“The way they described the program was quite hyperbolic,” Covert says.

Employers are watching the Honeywell case closely because many have similar incentive-based wellness plans, says Seth Perretta, a partner at Groom Law Group, a Washington, D.C., firm specializing in employee benefits.

Eighty-eight percent of employers with 500 workers or more offer some sort of wellness program, according to a 2014 national survey of employer-sponsored health plans by the benefits consultant Mercer. Of those, 42% offer employee incentives to undergo biometric screening, and 23% tie incentives to actual results, such as reaching or making progress toward blood pressure or BMI targets.

Despite employers’ enthusiasm for wellness programs, “there’s no good research that shows these programs actually improve health outcomes or lower employer costs,” says JoAnn Volk, a senior research fellow at Georgetown University’s Center on Health Insurance Reforms.

The health law encourages employers to offer workers financial incentives to participate in wellness programs. It allows plans to incorporate wellness incentives — both penalties and rewards — that can total up to 30% of the cost of employee-only coverage, an increase over the previous limit of 20%. If the wellness activity aims to help someone reduce or quit smoking, the incentive can be even higher, up to 50% of the plan’s cost.

Under the ADA, employers aren’t allowed to discriminate against workers based on health status. They can, however, ask workers for details about their health and conduct medical exams as part of a voluntary wellness program. What constitutes a voluntary wellness program under the law? Employers, patient advocates and policy experts want the EEOC to spell out what “voluntary” means under the ADA and clarify the relationship between the health law and the ADA with respect to wellness program financial incentives.

“The EEOC has chosen litigation over regulation,” says J.D. Piro, a senior vice president at Aon Hewitt, who leads the benefits consultant’s health law group.

The EEOC is always reviewing its guidance, but there’s no timeframe for issuing further guidance, says spokesperson Kimberly Smith-Brown.

Consumer advocates say it’s critical not to confuse incentive programs with comprehensive workplace wellness.

“The incentives are meant to engage employees,” says Laurie Whitsel, director of policy research at the American Heart Association, “but they’re not the comprehensive programming we’d like to see employers offer.” It’s really important to have a culture of health, Whitsel says, including an environment that supports a healthy workplace, from a smoke-free work environment to healthy food in the cafeteria.

Patient advocates voice another concern: That wellness program financial penalties may be so onerous they actually limit people’s access to the medications and primary and preventive care they need to get and stay healthy.

“When penalties become that high, it really is a deterrent to affordable, quality health care,” says Whitsel.

Kaiser Health News is an editorially independent program of the Henry J. Kaiser Family Foundation, a nonprofit, nonpartisan health policy research and communication organization not affiliated with Kaiser Permanente.

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