Make the most of a high-deductible health plan

Did you know that if you have a high-deductible health plan, some services like immunizations and screenings are free (even if you haven't met your deductible)? Or that you might be able to invest the money in your HSA? This episode, KFF Health News reporter Jackie Fortiér shares tips on getting the most out of your HDHP. Have a question about navigating the health care system? Contact us here https://kffhealthnews.org/health-care-helpline-share-your-story/ and you might be part of an upcoming episode of Health Care Helpline. Follow us on Instagram: @nprlifekit https://www.instagram.com/nprlifekit/?hl=en Sign up for our newsletter here. https://www.npr.org/newsletter/life-kit Have an episode idea or feedback you want to share? Email us at [email protected] mailto:[email protected] Support the show and listen to it sponsor-free by signing up for Life Kit+ at plus.npr.org/lifekit http://plus.npr.org/lifekit See pcm.adswizz.com https://pcm.adswizz.com for information about our collection and use of personal data for sponsorship and to manage your podcast sponsorship preferences. NPR Privacy Policy https://www.npr.org/about-npr/179878450/privacy-policy

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• 0:00Speaker 00

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• 0:16Marielle Segarra?

  You're listening to Life Kit from NPR.

• 0:21Marielle Segarra?

  Hey, it's Marielle. Today, we're talking about health insurance, specifically high deductible health plans. High deductible health plans are common in the US. A lot of people choose them because they have much cheaper premiums, and premiums are what you pay every month just to have the insurance, even if you don't use it. If you get your insurance through work, these will come out of your paycheck. The thing is, high deductible plans also have high deductibles. Your deductible is the amount that you have to pay for covered services before your insurance starts sharing costs. This is Jackie Fortier. She's been reporting on high deductible health plans for an NPR and KFF Health News series called Healthcare Helpline.

• 1:03Marielle Segarra?

  Now, sharing costs means that after you've paid a certain amount out of pocket, your deductible, your insurance will pay a portion of each medical bill, and you'll pay the rest. Could be an 80/20 split, 70/30 split. It depends on your plan. A lot of folks sign up for high deductible plans because of the cheap premiums, but then they get surprised later. I talked to Madison Burgess. She's an elementary school teacher in San Diego, and she was shopping around for a good deal for her husband.

• 1:31Speaker 02

  And when I initially got the plan, I just looked for the cheapest thing. And I didn't know what deductible was. I just went with what was cheap. And now I have regret.

• 1:44Marielle Segarra?

  So her husband has to meet an almost $6,000 deductible before insurance will pay. If you signed up for a high deductible health plan, and now you're wondering, how do I use this thing? We are here to help.

• 1:57Marielle Segarra?

  On this episode of Life Kit, a playbook for using your high deductible health insurance plan. One tip as a preview: If you know you have to get an expensive procedure or surgery or test done, try to time it out so you meet your deductible as early in the year as possible.

• 2:23Speaker 00

  Stay tuned for the following announcements and messages from our sponsors. This message comes from iXL. The first few weeks back at school set the tone for the rest of the year. iXL is designed to help kids build confidence and get up to speed fast. Covering pre-K through 12th grade, iXL offers personalized, interactive practice in math, language arts, and science. One subscription covers everything for all the kids in your home. Receive an exclusive 20% discount on an iXL membership at ixl.com/npr. This message comes from Midi Health. Most women never get real answers about their hormonal health. Midi is changing that with virtual care covered by most major insurances.

• 3:07Speaker 00

  Understand your hormones. Visit joinmidi.com to book your first visit today. This message comes from Charles Schwab with their original podcast, Choiceology. Choiceology is a show about the psychology and economics behind people's decisions. Download the latest episode and subscribe at schwab.com/podcast.

• 3:28Marielle Segarra?

  Hey, Jackie.

• 3:29Speaker 03

  Hey, Marielle.

• 3:30Marielle Segarra?

  You mentioned that someone you interviewed has to meet a $6,000 deductible before insurance will start paying for their care. Is that common?

• 3:39Speaker 03

  Yeah, it's kind of middle of the road. The IRS actually defines high deductible health plans. The minimum deductible for this year is $1,700 for an individual, but some individual, like catastrophic deductibles, can exceed $10,000 for a single person a year.

• 3:58Marielle Segarra?

  That would be a pretty big shock if you haven't had a high deductible plan before.

• 4:02Speaker 03

  Yeah, and I think high deductible plans can be confusing because the timing of the costs is so different. So, under a traditional plan, you might pay like $20 copay to see your doctor, but under a high deductible plan, you pay the full negotiated price of the visit until you hit your deductible. So, you might pay $100 for the same doctor visit.

• 4:25Marielle Segarra?

  Takeaway one, if you have a high deductible plan, find out what your deductible is. If you take out your insurance card, it'll probably be on there. Or you can also look in your portal online or in your plan documents. And then if you go to the doctor, remember you might have a lot of bills to pay upfront. These can range. You know, maybe you're used to paying a $30 copay when you go to see the doctor, but now the office is asking you to pay $130 for the same visit. Or you get a blood test done and you have to pay a couple hundred dollars for that.

• 4:57Marielle Segarra?

  So one of the challenges, right, is that when you have a high deductible plan, you end up with a lot of upfront costs. How does that play out for a lot of folks?

• 5:07Speaker 03

  I think it really changes how some people choose to use their health care. I talked with Thomas Lehman. He's a dog walker and pet sitter in the Atlanta suburbs. And he's had a high deductible plan for a few years now. You know, he spends thousands of dollars a year just on premiums. That doesn't leave a lot left over. So he and his wife only see a doctor when it really feels unavoidable.

• 5:28Speaker 04

  So we're kind of stuck in this situation where, I mean, we only use it for maybe emergencies or semi emergencies.

• 5:36Speaker 03

  And he told me that he would go to the doctor more if he had more traditional insurance. But with a high deductible plan, he's just not comfortable doing that. So he only goes when he feels like he really has to.

• 5:48Marielle Segarra?

  Takeaway two, though, is there are ways to manage these upfront costs. At Life Kit, we've reported on how to apply for financial assistance, also known as charity care, from a hospital. Even if you haven't met your deductible yet, hospitals might lower or eliminate your bill depending on your income. Another option is to get on an interest-free payment plan with your hospital or doctor's office. And here's how that works. Imagine it's January. You have a $6,000 deductible and you have to go to the hospital for something. Then you get a bill and it's $2,000. You're expected to pay that bill directly to the hospital because you haven't hit your deductible yet. But that doesn't mean you have to pay it off all at once. Ask the medical billing office to put you on an interest-free payment plan.

• 6:32Marielle Segarra?

  That way, you can pay in installments every month without accruing interest. Now, it is possible that when you ask, they'll say no, but these types of payment plans are very common. And to be clear, we're not talking about signing up for a credit card or a loan. This is just an installment plan that you set up with the billing office. And before you start paying, you want to confirm in writing that you won't be charged any interest. Another strategy, if you have a high deductible health plan, is to see if you can benefit from timing your healthcare visits so that if you're going to hit your deductible, you do it early in the year.

• 7:03Speaker 03

  There is an advantage to meeting your deductible earlier in the year if you can. I talked with Kaitlin Donovan with the Patient Advocate Foundation, and she said it does pay off to sort of strategically schedule those big-ticket medical treatments.

• 7:17Speaker 05

  You might want to schedule those treatments upfront, a surgery upfront, so that way you're paying for your coverage, and then the rest of it kicks in for the rest of the year, and you get to enjoy that kind of safety cushion.

• 7:32Speaker 03

  So, most deductibles reset on January 1. And again, if you can afford it, meeting your deductible sooner can make the rest of the year significantly cheaper, especially if you have a chronic condition.

• 7:44Marielle Segarra?

  This is our third takeaway. Be strategic about when you schedule expensive procedures and visits, whenever possible. Of course, if you've already met your deductible in a given year, that's also a good time to get your expensive medical care done.

• 8:01Marielle Segarra?

  We'll have more Life Kit after the break.

• 8:10Speaker 06

  Stay tuned for the following announcements and messages from our sponsors.

• 8:15Speaker 00

  This message comes from iXL. The first few weeks back at school set the tone for the rest of the year. iXL is designed to help kids build confidence and get up to speed fast. Covering pre-K through 12th grade, iXL offers personalized, interactive practice in math, language arts, and science. One subscription covers everything for all the kids in your home. Receive an exclusive 20% discount on an iXL membership at ixl.com/npr.

• 8:45Speaker 00

  This message comes from Midi Health. Most women never get real answers about their hormonal health. Midi is changing that with virtual care covered by most major insurances. Understand your hormones. Visit joinmidi.com to book your first visit today.

• 9:01Marielle Segarra?

  Now, on to takeaway four. Certain kinds of visits and services are free, even if you have a high deductible plan and haven't met your deductible yet.

• 9:08Speaker 03

  This one surprises a lot of people. As with most insurance in the US, even if you have a high deductible plan, many preventive services must be covered by law with no out-of-pocket costs from you. So this includes things like annual checkups, many vaccines and immunizations, and screenings for a lot of cancers. There is a whole list, and these services are free when you go to an in-network provider. So you should really take advantage of those.

• 9:37Marielle Segarra?

  If you're on a high deductible health plan, how can you budget for the upfront costs that we've been talking about?

• 9:43Speaker 03

  It's really important to treat your deductible like a bill that you might have to pay. It doesn't mean that you're going to hit it every year, but if you have like a $4,000 deductible, it can help to slowly set aside money during the year so that a surprise medical issue doesn't become a huge financial crisis. Some people essentially build their own medical emergency fund, and there is a way to help you do that. It's called a health savings account.

• 10:08Marielle Segarra?

  An HSA. Can anyone with a high deductible plan open an HSA?

• 10:13Speaker 03

  If you have a high deductible plan, you very likely can open an HSA. New this year, folks with bronze or catastrophic ACA plans can open an HSA. There are a few people who can't because of their individual circumstances. So if you have other health insurance like Medicare or you have coverage on your spouse's policy, you cannot open an HSA, or if you're claimed as a dependent. A lot of people who have a high deductible plan don't actually open an HSA, but they are pretty neat. You can think of them like a medical piggy bank. It also has a triple tax advantage. You put money in before taxes. It grows tax-free, and then you can spend that money tax-free on qualified medical expenses.

• 10:58Marielle Segarra?

  Takeaway five, don't sleep on your HSA. An HSA is a savings account for medical expenses. The money you put into it will not be taxed. It either comes straight out of your paycheck before taxes, or you can put it into your account and get a tax deduction in April. Your HSA account belongs to you. If you open one through an employer and you leave your job, the money is still yours, and the money rolls over every year.

• 11:21Speaker 03

  It is important, I think, to remember if you don't have a lot of extra cash to put into an HSA, you are not alone. A lot of people paying their, you know, health insurance premiums and medical costs, they can only contribute a little bit. But the amount that you put into the account is totally up to you. So you can start like really small if you want to, like just a few dollars a month if you want to slowly build it up. There is an annual limit set by the IRS. So it's based on the number of people on the policy. For 2026, it's 4,400 for an individual and a little over 8,700 for families. So anything under that ceiling that you want to put into an HSA is completely up to you.

• 12:03Marielle Segarra?

  What sorts of things can you use the money in your HSA on?

• 12:08Speaker 03

  You can pay for quite a bit. You can pay for those doctor visits like we talked about earlier, prescriptions, even products like over the counter medicines, tampons, sunscreens. You get issued a debit card from the bank where you open the account, and that's how you buy anything. And that money is yours. There's no deadline to use it. It typically cannot be used for monthly premiums. But again, you do get to keep that money for any of these qualified medical expenses for you, your spouse, or your dependents anytime in the future. If you get insurance through your job, your employer may match the amount that you put into the HSA up to a certain point, or they could just add funds. You could ask your HR department about the details on that.

• 12:52Speaker 03

  If you buy your insurance through the exchange, though, you do have to fund the HSA yourself.

• 12:58Marielle Segarra?

  Another thing that's nice about HSAs is that you can invest the money in your account in stock market funds, usually once you hit a certain threshold. And you'll never be taxed on that money, not even the growth, as long as you eventually use it for qualified medical expenses when you do withdraw it. Investing your HSA funds may not be an option for you right now, but if you can afford to let the money sit in there and grow, this can be a great long-term investment. Keep in mind that HSAs are different from FSAs, or flexible spending accounts.

• 13:27Speaker 03

  It's funny, they get mixed up a lot because they're both these like taxed advantaged healthcare accounts that you fund, but they do work differently. So a flexible spending account is more like a short-term budgeting tool for that year. This is an employer-sponsored benefit, so it's owned by your employer. You usually have to use it or lose the money by the end of the year. It does not require a specific type of health plan. It is also tax-free for qualified medical expenses, but only when you're employed at that job.

• 13:59Marielle Segarra?

  Okay. Anything else that folks with high deductible health plans should know?

• 14:03Speaker 03

  One other thing that people might be considering is paying cash. When it's time to pay for your care, you know, some people think it's maybe more affordable to skip using insurance. Some hospitals or clinics will offer cheaper prices if you pay cash because they want to get paid. You do have the right to an itemized estimate, an explanation of how much a health service would cost if you paid out of pocket. So if you have time before you go and get that service, you could go and ask them how much it would be. And then you can compare that price with what your insurance company tells you it would cost if you used your insurance. So paying cash may save you money, but remember the amount you pay generally won't count

• 14:47Speaker 03

  toward your deductible or your out-of-pocket maximum because you're not going through your insurance. So if you're able to, usually before, you know, like a surgery, for example, that you might have planned, you might be able to do the math on how much it would cost if you paid cash versus how much it would cost if you went through your insurance.

• 15:07Marielle Segarra?

  Jackie, thank you so much for this.

• 15:09Speaker 03

  Yeah, thank you.

• 15:15Marielle Segarra?

  Okay, time for a recap. Takeaway one, if you have a high deductible plan, remember you might have a lot of bills to pay upfront. Takeaway two, there are ways to manage these costs. At Life Kit, we've reported on how to apply for financial assistance, also known as charity care, from a hospital. Even if you haven't met your deductible yet, hospitals can lower or eliminate your bill based on your income. Another option is to get on an interest-free payment plan with your hospital or doctor's office. Not a credit card or a loan, just an installment plan with zero interest. Takeaway three, if you think you're going to meet your deductible, you want to schedule expensive medical procedures and visits earlier in the year so that you can squeeze the most out of your plan.

• 15:59Marielle Segarra?

  Of course, this isn't always possible. And if you've already met your deductible in a given year, that's also a good time to go to the doctor. Takeaway four, certain kinds of visits and services are free, even if you have a high deductible plan and you haven't met your deductible yet. And takeaway five, don't sleep on your HSA. It can save you a lot of money in taxes and help you save up for medical bills. That's our show. Do you have a question or a story about navigating the healthcare system? It could be part of an upcoming healthcare helpline installment. You can share your story by following the link in the show notes of this episode. This episode of Life Kit was produced by Margaret Serino. Our digital editor is Malika Gharib, and our visuals editor is CJ Riechelmann.

• 16:43Marielle Segarra?

  Megan Kane is our senior supervising editor, and Beth Donovan is our executive producer. Our production team also includes Andy Tagel, Claire Marie Schneider, Sylvie Douglas, and Mika Ellison. Engineering support comes from co-Takasugi Chernovin. I'm Marielle Segarra. Thanks for listening.

• 17:20Speaker 00

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