How to Minimize Your Out-of-Pocket Medical Expenses with a Chronic Illness

How to Minimize Your Out-of-Pocket Medical Expenses with a Chronic Illness

Hey everybody, it’s Matt Cavallo, from Situation Positive. It’s January and that means that your health insurance benefits have reset and you’re going to start having out-of-pocket medical expenses again. Nobody likes those, so I’m going to teach you how to minimize the amount of money that you have to spend out of pocket for medical expenses each year.

Before I do that, I’m going to teach you a couple of common health insurance terms. The first definition is going to be deductible. Deductible is the amount of money that you have to spend out of pocket before insurance will kick in and start paying money for cover medical expenses. I’m just going to use nice round numbers. So, let’s say you have a $1,000 deductible. You will have to pay $1,000 out of pocket for covered medical expenses before insurance will kick in and start to pay. So, the first thousand dollars goes towards that deductible.

Next is co-insurance. Often once you meet a deductible, you have what’s called coinsurance. A lot insurance plans have an 80/20 split meaning that insurance pays 80% and you would pay 20%. For example, if there is a $100 charge and you have met your deductible, the insurance company would pay $80 and you would pay $20 for covered medical expenses.

First comes the deductible and next comes co-insurance, then finally you get to your max out of pocket. If you look at your health insurance plan benefits, you have a max out of pocket for in network and out of network services each year. So, let’s say your max out of pocket is $2,000. When you meet your deductible, you have paid $1,000 of the total $2,000.  Then, you have to pay co-insurance for each covered medical expense until you reach max out of pocket of $2,000. Once you reach your max out-of-pocket, insurance will pay for covered medical expenses at a 100%.

These terms are very important because what if I said we can get you to that max out of pocket without spending money from your own pocket? That means all of your covered medical expenses will be paid at a 100% by the insurance company and you could have $0 out of pocket expenses for the year. How can we do that?

I do it through planning. When you have a chronic illness, you can predict the number of medical visits, procedures and treatments that you have in a given year to manage your condition. For example, I have been living with a chronic illness for 15 years. At this point, I know everything I’m going to have to do to manage that chronic illness through the year:

  • Two infusions of my MS treatment
  • Two neurologist appointments
  • Two labs for bloodwork
  • Two MRIs

I know the infusions are going to be my most expensive medical expense in any given year. Barring an unforeseen hospitalization, I can plan on my two IV treatments costing me the most money. Then I have blood work and MRIs, which I need those for my neurologist to monitor condition. Finally, I have two checkup appointments a year with my neurologist to authorize my treatment and manage my MS. This means that I know each year that I will have 8 medical appointments just to manage my chronic illness. Since I know that I have these appointments, I can plan them so the most expensive happen first so I can reach these spending limits early in the year.

To accomplish this, I schedule my first IV treatment in January. This is critical for minimizing your out-of-pocket spending. I am going to teach you in another video that pharmaceutical companies also offer financial assistance programs and that money can go towards your deductible and out of pocket maximum. A lot of these financial assistance programs don’t have any income qualifications, so many of us are spending money on our prescriptions without knowing that we qualify for financial assistance through the pharmaceutical companies.

The reason I get my first IV treatment in January is because my pharmaceutical company, through my financial assistance program, pays one hundred percent of my deductible leaving me with zero out of pocket expenses for that treatment. I’ve also reached my deductible in January for the year without spending any of my own money.

A lot of people don’t know that you can do that. Since I have my medical appointments planned, I don’t have to have another doctor’s appointment, MRI, or blood test until May. But, if I have any other medical issues pop up at this point, I’m already to my co-insurance rate. So, I’ve reached my deductible spending zero dollars and now I’m only paying twenty percent for any covered medical expenses going forward and the year is just beginning.

I have my second infusion in June, during which I usually hit my max out of pocket for the year. The pharmaceutical company’s financial assistance program kicks in and pays up to my max out of pocket. I’ve now made it from January to June just paying coinsurance which is twenty percent. So, you see why it’s critical that you take advantage of these programs. Even if you think you may not qualify you just might. Call the financial assistance program number and go through the enrollment process. You’ll be surprised. These programs are there to help you

In June, I’ve reached my out of my max out of pocket and have spent very little of my own money using programs to pay for my medical expenses. So, what does it mean once you hit your out of pocket max? That means that a hundred percent of your covered medical expenses are paid at 100% by the insurance company. You can go see that specialist or have the procedure done that you have been putting off and the insurance company will cover it at 100%.

For example, let’s say I need some physical, occupational, or speech therapy. I’m going to wait until after June until I hit my max out of pocket and then I’m going to go have those appointments because they’ll be covered at a 100%. I was just at my dermatologist in December, and I had a credit. Can you imagine? I asked what my copay was, and they informed me that I had a credit. Do you know why? Because I had reached my max out of pocket when I had seen him earlier in the year and paid my copay. So, when they went to run my benefits, I actually had a credit at the doctor’s office. Isn’t that amazing? My doctor’s office actually paid me for my visit!

Medications work the same way. I have acid reflux and allergies so I get medications monthly. By June, I hit my max out of pocket and I pay zero dollars at the pharmacy for the rest of the year for my medications. In December, I request a ninety-day supply so I don’t need to refill my medicine until March.

To recap:

  • I’m using financial assistance programs that are available to help me pay for my out-of-pocket expenses at the beginning of the year.
  • This helps me reach health insurance milestones like my deductible and max out of pocket early in the year.
  • This keeps my out of pocket costs for covered medical expenses to a minimum
  • Once my out of pocket max is reached, I catch up on medical appointments and procedures, which I may have put off due to cost previously, because insurance will now cover at 100%.
    • For example, last year after I reached my max out of pocket, I got custom orthotics made for my shoes.
    • Typically, these could cost a lot of money, but I met my max out of pocket, so insurance covered the orthotics at 100%.

By planning out my medical services, I’m taking full advantage of the benefits that come with health insurance. Once you reach your financial commitments, even if it is using financial assistance programs, then you can take care of things that you’ve been putting off for a long time. I’ve taught this method to other’s living with chronic illness, and they have started receiving the same types of benefits that I have discussed here. If you want to learn more, please join our community, or contact us. We are here to help.

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