Traditionally, much hoopla surrounds the birth of the first baby of the New Year. But it turns out that can be an expensive bit of good luck.
While medical conditions and encounters don’t care whether it’s 2013 or 2014, health insurance and subsidies generally play by the calendar year. Deductibles reset on Jan. 1, no matter if you began your six weeks of radiation in December or have been pregnant for the last eight months. And with more and more policies, including those offered under the Affordable Care Act, carrying high annual deductibles of $2,000 or more, that reset can lead to major expenses for consumers who must fulfill the new deductible.
I have spent this year covering medical pricing and have received comments from a number of patients who fell victim to this deductible double jeopardy. Jennifer from Evanston, Ill., wrote:
“My 2nd pregnancy spanned two calendar years, so despite the fact that it was the same pregnancy, I paid my deductible twice, and 20 percent of the hospital charges.”
This year, the beginning of the Affordable Care Act health exchanges may amplify the problem for some patients as they switch to new insurance. Rebecca wrote:
“My State Insurance is switching to ObamaCare, and my deductibles start ALL over again with no option to dispute my prenatal and birthing care as an extension of existing care. So, $4,000 deductible and now another $3,000 for the last month and birth.”
Unfortunately, that is how insurance works. “Deductibles accumulate on an annual basis, so claims for 2013 accrue until December 31st and then start again for 2014,” said Susan Pisano, vice president of communications for America’s Health Insurance Plans, a trade group. She noted also that insurance companies generally do their accounting according to when a claim was submitted, not when the service occurred.
This double jeopardy can prove extremely costly in a country where even routine pregnancies ending in simple vaginal delivery can cost $15,000. It may also be burdensome to patients undergoing prolonged or complicated treatment, like breast surgery followed by reconstruction.
Experts point out there are also time constraints built into Health Care Flexible Spending Accounts, which allow consumers to place pretax dollars for unreimbursed medical expenses. But these special accounts also track to the calendar year. Although most plans allow for a grace period of a few months – allowing you, for example, to get reimbursed next March for care rendered this month — ultimately these plans are “use it or lose it.” If the money is not spent by the deadline, you lose it. According to Wage Works, the employer keeps the unused portion and generally uses it to defray administrative costs of the plan or, sometimes, to pay for participants who have gone over their limit.
Unfortunately, disputes over hospital bills can take a long time to settle, leaving patients out of luck and money. Dr. Marguerite Duane, a physician who was featured in my recent article on the high costs of pregnancy, thought she was being sensible when she put thousands of dollars into her Flexible Spending Account during her last pregnancy to pay for the unreimbursed expenses related to the birth of her son, Ellis.
But when the hospital mistakenly charged Dr. Duane for an extra night, she spent many months disputing the bill. By the time an accurate bill was generated, she was no longer eligible to use the money.
Which is all to say that, as far as health insurance is concerned, the devil is in the details. And as millions of Americans are signing up for insurance policies under the Affordable Care Act, it pays to scrutinize very carefully how each policy works. Also, as the end of the year approaches, there are ways to minimize your financial exposure, experts said.
Ms. Pisano pointed out, for example, that it might behoove a patient being treated in 2013 to push a hospital to submit the bill as early as possible or schedule elective treatment early in December so that it did not slip into January. Likewise, an obstetrician can bill at the beginning or the end of a pregnancy – a decision that may have huge implications for patient out-of-pocket costs.
In terms of Flexible Spending Accounts, patients don’t need to settle billing disputes to tap into these funds, said Jody Dietel, chief compliance officer of the benefits firm WageWorks. They should submit the bill as soon as they get it. If, after adjudication, the final bill is for less than the payout, they will simply have to repay the difference. Said Ms. Dietel: “This is free money, but like coupon shopping you have to be a little organized to use it.”
Source: http://well.blogs.nytimes.com/2013/10/24/new-years-baby-you-may-pay-more/?ref=elisabethrosenthal&pagewanted=print
