HomeHealthYour out-of-pocket health care costs don't have to be a mystery

Your out-of-pocket health care costs don’t have to be a mystery

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If you’ve ever had a serious illness or have cared for someone with it, you know how quickly medical bills can add up: from labs, radiology clinics, pharmacies, doctors, different departments within the same hospital, some of them in your network insurance, others not.

It can be extremely confusing, no matter how smart, determining which bills to pay. If you are ill or have language, cultural or technological barriers, not to mention financial difficulties, navigating this maze can be especially intimidating.

A California law signed by the governor. Gavin Newsom last month can help you sort through a tangle of medical bills to find out what your health plan will cover and when coverage will begin.

The law, SB 368, requires most state-regulated private sector health plans to send updates to members, for each month in which they received care, showing how much they have paid toward their annual deductible – the amount that a person must pay out before when insurance begins to cover most of your care and how close you are to reaching out-of-pocket limits, the amount after which the insurer pays for 100% of the care.

The law, which takes effect in July, should help people with costly chronic illnesses who need to better keep track of how much they owe, and healthy people who rarely seek care but may suddenly run into unexpected medical circumstances.

“It’s not that difficult to hit those highs and you don’t need a cancer diagnosis to get there,” says Dylan Roby, a professor of public health at the University of California-Irvine. “It could be a visit to the emergency room with a procedure. A broken leg could get you there pretty easily. “

The new law requires health plans to send out-of-pocket updates by mail, unless the insured opts for electronic delivery. The information must also be stored in a format that is accessible to customers at any time.

SB 368 “is part of a broader need to provide transparency about people’s out-of-pocket risks,” says Roby.

Consumers are often unaware, he notes, of what is available for free under the Affordable Care Act, including preventive services like screenings and vaccinations. Most health plans offered through Covered California, the state’s ACA Marketplace, must also cover outpatient services, including imaging, specialist appointments, and physical therapy, before the deductible is met.

One potential flaw in the new law, Roby notes, is that insurers can calculate numbers based solely on the claims they have processed, and some doctors and other providers can take six months or more to submit claims. That means the information the plans send to members may be out of date.

Currently, state law does not impose any specific requirements on insurers to inform members of their current financial obligations, but some plans already do so, either in the “explanation of benefits” they send after receiving care or in response to a customer request.

“This law makes an optional practice a requirement,” says State Senator Monique Limón (D-Santa Bárbara), author of the legislation. “And it’s good practice.”

The new law should be useful to a growing number of people, given the increasing prevalence of health plans with increasing deductibles.

Between 2012 and 2020, the percentage of California workers with individual coverage who had an annual deductible of $ 1,000 or more quadrupled, up to 54%. And among families enrolled in deductible health plans, 70% had deductibles of $ 2,000 or more last year, compared to 31% eight years earlier.

For the cheapest California Covered Plans, this year’s deductible is $ 6,300 for an individual and $ 12,600 for a family. And there is a separate deductible for prescription drugs (the new law requires health plans to inform members of their status regarding all of their deductibles).

Stacey Armato’s 6-year-old son Massimo has cystic fibrosis, a serious degenerative lung disease that requires expensive medical treatments. Armato says the family has good insurance that covers most of those costs, but they still need to rethink spending priorities at times. She says California’s new health law, SB 368, will help them better track their medical expenses. (Stacey Armato)

As deductibles increase, health plan members are seeing their insurance financial protection kick in. later and later in the year. And in many cases, after meeting their deductibles, they still need to spend a thousand or more before reaching their out-of-pocket limits for the year.

People with serious diagnoses, such as cancer, HIV, multiple sclerosis, or cystic fibrosis, often do these calculations.

Stacey Armato, a 41-year-old mother of three in Hermosa Beach, California, has a 6-year-old son with cystic fibrosis, a severe progressive lung disease. Her son, Massimo, takes about a dozen medications, costing thousands of dollars each month.

Armato and his family are luckier than most – they have good insurance that limits their total spending on Massimo’s care to about $ 6,000 a year. But that’s still enough to make them rethink spending plans at times. “I will always prioritize the care of my son,” says Armato.

He likes the new law. “I think transparency about how much a patient spends and what their financial obligations are is really important,” he says.

Some families dealing with cystic fibrosis and other costly illnesses face much larger tradeoffs, for example choosing between treatment and paying rent. In such cases, knowing when the financial bleeding will end can be critical, easing pressure on the family budget.

The new law can also be helpful if you, like many people, postponed elective surgery due to the pandemic (a hip replacement or cataract removal, for example) and want to reschedule it now. The best time, financially speaking, will be when you are close to reaching your deductible and out-of-pocket limit, or if you have already reached them. If you know your situation, you can schedule the procedure for a time when your financial responsibility is minimal.

The law could also help people avoid paying money that they don’t actually owe. “Sometimes when people see any kind of bill, they think they have to pay it,” says Jen Flory, a policy advocate at the Western Center on Law & Poverty, which supports the legislation. “So unless they understand that, ‘Oh, I’ve reached my deductible, or my out-of-pocket maximum,’ people panic and do whatever it takes to pay the bill. And it can be difficult to get money back from providers if they pay unnecessarily. “

Although your insurer is not required to provide your out-of-pocket status until the law takes effect in July, you can still call the customer helpline and request it, or for clarification on a bill. If you don’t get the answer you want, ask your health plan to tell you who regulates it and call that agency. Typically this would be the Department of Managed Health Care at 888-466-2219 or HealthHelp.ca.gov, or the California Department of Insurance, at 800-927-4357.

If you need help sorting out piles of medical bills, you can hire a professional patient advocate, who will usually charge you a percentage of the amount saved. To find Patient Advocates in your area, log in to www.advoconnection.com

To see if you qualify for free assistance, try the Patient Advocate Foundation (www.patientadvocate.org or 800-532-5274), which helps people resolve unpaid health bills and also provides financial assistance based on specific disease needs.

This story was produced by KHN, which publishes California Healthline, an editorially independent service from the California Health Care Foundation.

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