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HOW TO MINIMIZE YOUR HEALTH CARE COSTS
The average employee
contribution for health insurance has soared over 143%
since 2000. Typical out-of-pocket expenses that
consumers pay for deductibles, prescription co-payments
and coinsurance for doctor and hospital visits have
jumped 115% during the same period, based on facts
compiled by the National Coalition on Health Care. You
and your family can still afford to receive the
treatment you need, according to the Wisconsin Institute
of CPAs, by taking some simple steps to limit your
costs.
BE TAX SAVVY
Don’t miss out on the tax-advantaged options for
lowering your health care costs. For example, find out
if your employer offers a flexible spending account (FSA),
which will allow you to set aside some of your earnings
tax free to cover unreimbursed medical costs, such as
co-payments and deductibles, as well as items that might
not be included in your plan, like eye care or
eyeglasses, hearing tests, chiropractic care and the
cost of prescriptions. It’s important to remember that
you must use your FSA contributions in the year they are
made or you will lose them, although your employer can
give you an additional two-and-one-half months to spend
the funds. That’s why it’s a good idea to perform a
careful estimate of your out-of-pocket health care costs
during a recent year-—and consider how that amount may
change in the coming year--before contributing to an FSA
account.
Another option, health savings accounts,
generally are open to people under 65 who are covered by
one high-deductible health insurance plan. Contributions
are tax deductible and can be used to pay for the
expenses that your insurance doesn’t cover. The earnings
accumulate tax free and withdrawals are tax free when
used to pay for qualified medical expenses—-but you will
face a 10% penalty if you withdraw money for another
purpose.
EXAMINE YOUR PLAN OPTIONS
As another cost-cutting step, be aware that the health
care plan with the lowest premium may not be the best
one for you. In fact, you may find that it is more
expensive in the end due to higher costs for copays or
unreimbursed charges. A cheaper bare-bones plan also may
cover fewer services or providers, which means you may
face more out-of-pocket costs.
When picking a plan, your family situation
will be an important factor. A family with young
children may do better selecting one with low copays or
deductibles-—even if the premiums are a little higher
than other options-—because they may have frequent
doctor visits. A younger single person or couple, on the
other hand, might select a plan with lower premiums and
higher copays if they rarely see the doctor outside of
annual check-ups.
BE ALERT FOR ERRORS
Check your medical bills for accuracy. Common hospital
billing errors, for example, include duplicated charges,
charging for extra days or for services that weren’t
actually rendered or simple typos that can add dollars
to your bill. Also review the statements you receive
from your insurer to verify that the facts are correct
and that you received the right reimbursements.
APPEAL DECISIONS
Finally, if your insurance company denies coverage, be
aware that you don’t have to take no for an answer. You
have the right to appeal their decision and try to
negotiate a better outcome.
Your CPA can help you understand the health care options
open to you. Turn to your local CPA for advice on making
the most of your health care dollars.
The WICPA is the premier professional organization
for Wisconsin CPAs, with more than 8,200 members working
in public accounting, industry, government and
education. Please include the CPA credential in source
identification. Like other professionals, certified
public accountants are required to obtain additional
education, take a rigorous exam and become
certified. Please identify all CPAs by including the
credential with their names. This identification
enhances the accuracy and credibility of your reporting.
Produced in cooperation with the AICPA
©2006 The American Institute of Certified Public
Accountants
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