Health Expenses – Ouch!
Posted on June 21, 2005 9 Comments
Since Friday, I’ve spent approximately $600 on health care. Here’s the breakdown:
$560 – Initial payment for my braces
(I can’t believe how much these ache! Beyond the pain, the braces feels like
Legos took over my mouth. The orthodontist also put little plates behind my
two front teeth called “Turbos” so I don’t bite off the bottom braces. Now my
molars don’t touch and all I can eat is soup. Sweet. Or should I say, “Schweet.”)
$25 – Co-payment (and parking) to my doctor’s office
(On Sunday, I got a horrible stomach ache. I’ve had it for two full days now.
Monday I got scared about it and went to the doctor’s office, where a trained
medical professional reaffirmed absolutely everything that Web MD told me
without the detailed explanations.)
$5 – Generic over-the-counter stomach medicine
(Hey, at least it’s cheap)
Had I anticipated these costs in advance, I could have utilized my office’s
flexible spending account for health and dental care. Given that I’ll
spend a few thousand dollars on health care this year (more than usual due
to the braces and oral surgery), I could have saved a couple hundred dollars.
Prior to this year’s health fiasco, I didn’t understand how these accounts
work, so I did a little investigating.
Health spending accounts benefit employees because money spent on
health care is income-tax free. While government does not place a limit
on the amount of money you can set aside for health care, individual
employers sometimes do, often setting limits near the $2,000-$3,000 range (www.bls.gov/opub/cwc/cm20031022ar01p1.htm). Drawbacks do
exist to these accounts – if you overestimate your yearly health care
spending, you loose the extra money.
Though I haven’t put aside money for my health spending account yet,
I’m currently totaling up my costs for next year. Here are some tips
based on my strategy:
- Anticipate large costs: If you can put off an expensive
procedure until next year (when you can put in dollars against your account)
such as lasic eye surgery, wisdom teeth extraction or braces, plan to
do so. Then, discuss costs with your health care provider. Next year,
for instance, I’ll put $1,536 away to cover my monthly orthodontics payments.
- Check last year’s office visits: Count costs for annual visits to your
eye doctor, dentist, dermatologist, gynecologist, etc. I plan to also factor
in two doctor’s visits for colds. Add these to your running total.
- Include health care purchases: A quick look at your debit card or
checkbook will remind you of monthly prescription costs (heartburn medicine?
birth control?). Don’t forget about contacts and/or glasses (yes, you can use
1-800-Contacts under most plans).
This should give you a good idea of how much to store away in your
spending account. Of course, you can’t anticipate medical emergencies.
But based on your health history and purchase behavior, you can get a good
estimate for your account without going over.
And many Americans do go over. In fact, according to USA Today, $210 million
in unspent money is forfeited each year to health spending accounts (about
7 million Americans use these accounts). Upon closer look at the figures, given
that the average employee puts in $1,000 per year and leaves three percent
on the table, I estimate most people forfeit about $30 each year.
If, at year’s end, you’re stuck with money left in the account, fear not! Sandra
Block at USA Today offers helpful tips for draining your health spending account:
http://www.usatoday.com/money/perfi/columnist/block/2004-12-20-ym_x.htm
Some of my favorite ideas here are to restock your medicine cabinet
(check dates and toss out old medicines), buy new contacts (even if it’s only
one box!) and bump up payments on installment plans (like orthodontia).
If you don’t like the idea of flexible spending accounts, other options exist,
like health savings accounts (HSAs) and reimbursable medical accounts.
You can find plenty of information about both on the Internet.
I know that it’s hard to focus on next year’s flexible accounts already.
But planning ahead will save you headaches in upcoming months, as account
deadlines loom and the holiday season kicks in. Determine your costs now, and
all you’ll need to do in the fall/winter is locate your tabulation sheet.
Don’t miss the cut-off date like I did!
Category: Money
Tags: benefits , health
Comments
9 Responses to “Health Expenses – Ouch!”
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June 21st, 2005 @ 9:08 pm
Can we get a new picture of you w/ the braces
June 21st, 2005 @ 10:29 pm
Ha ha! No!
June 22nd, 2005 @ 1:43 pm
I second the braces picture comment!!!
My 9-year-old just went into phase 2 of braces — headgear. He hates it, but hopefully it will keep him from having problems later in life.
June 22nd, 2005 @ 6:41 pm
One of the cool things about these accounts is that you can use them for almost any legitimate medical expense you can think of, including many not covered by traditional insurance.
I’m 8 weeks pregnant by artificial insemination, anonymous donor. Those little swimmers generally cost between $250-400 per batch, and you don’t reach a 50% chance of getting pregnant until the 6th try.
Paying for the little swimmers pre-tax was a great decision and saved us close to 30%.
June 24th, 2005 @ 2:55 pm
Plaaning ahead makes good sense and it is only unfortunate that viruses and bacterias do it at random!!
June 24th, 2005 @ 7:57 pm
Good luck with the braces! Had them TWICE when I was growing up…once in 2nd grade and again in 5th grade. They hurt like heck when they tighten them on those visits.
You’ll soon have straight beautiful teeth! Congrats!
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January 3rd, 2006 @ 3:30 am
If your company offers you health insurance that’s great. I personally love these new Health Savings Accounts that were just passed into law. Since I am young and healthy (luckily) I use it has a another tax-free retirement vehicle.