If you are like many American healthcare consumers, you are enrolled in a calendar-based high deductible health insurance plan that resets its cost sharing requirements at the end of each year. This means that any progress you made towards reaching your deductible or out-of-pocket maximum will instantly reset to zero on January 1, 2022. Given this situation, what actions should consumers take before the end of 2021 to ensure their financial health?
If you have met your deductible or out-of-pocket maximum for the year, the first action you should take is to get as much needed in-network medical care as you can before the year ends. The simple reason is you will not have to pay far less for it if you have met your deductible and none of it if you have met your out-of-pocket maximum.
And what if you did not need medical care in 2021 and made no progress towards meeting your deductible? In that case, the second action you should take is to evaluate your health insurance options during your employer open enrollment period when you can change your insurance coverage. Although not all employer-based plans provide you with this flexibility, many large employers provide health plan options that fit the needs of an employee. For example, a younger person with no expected medical service needs can select a high-deductible plan that correspondingly has lower premiums. For individuals who will need medical services in 2022, this is the opportunity to select a plan with lower or even non-existent deductibles and cost sharing requirements. Although premiums will be more, switching to a plan with richer benefits can ultimately save you a great deal of money.
The third and final action you should take is to evaluate how much money is in your health savings account. You may decide to not put additional pre-tax dollars away but continue to participate in a high-deductible health plan because you have enough put away in your health savings account to cover any deductibles or cost sharing requirements in the new year. You may, on the other hand, decide that you want to take advantage of the tax advantages of a health savings accounts and continue to build your healthcare nest egg in anticipation of future medical expenses. Remember that if you have decided to switch to a regular, non-high deductible plan you can still use those funds to pay for co-pays or co-insurance.
Healthcare will continue to be complicated and expensive for the foreseeable future. By taking these three actions, you will, at a minimum, know that you are doing what is in your power to ensure your physical, mental and financial health in 2022!
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