I got an email the other day from someone who referred to what we usually call “resolutions” as “intentions.” I like the change because, confession, I’m not much of a resolution guy. I like goals and do my best to make them both practical and aspirational. With resolutions, it feels more like something you’re told you should do every January 1st because it’s a new year and a new start. OK, great, but that implies that things didn’t go as planned in the previous year, which in turn implies that plans are finite. All of these are true for those who want it to be true. If that’s you, then congratulations on your 2018 goals and good luck in 2019!
For the rest of us, let’s go with “intentions.” It implies that you’re going to do it but not only that — it says that you’ve planned for it, you’re ready for it, it’s going to happen. You intend for it to happen, so it will happen. Go forth and conquer!
With that in mind, here are my three intentions related to benefits in 2019 and beyond, which have been my intentions for years already, through trial and error, consultation, experimentation, and good ol’ luck!
No. 1: Read the fine print.
The last time we bought a house, our realtor — who was also a close friend and therefore more candid than he may have been otherwise — said that over the 20+ years he’d spent helping people find their dream homes, he figured that they spent an average of 90 minutes physically inside their new home before making a purchase. No overnight stays, no test drive, barely even a kick of the proverbial tires. They spent maybe a few more hours working with others who took a look at the home, but for this HUGE decision, which for many is the highest-cost financial decision we’ll ever make, we put 90 minutes of on-the-ground time into it.
Likewise, there’s an oft-quoted stat in the benefits business that people spend about 15 minutes researching their choices before deciding on their health insurance for the year. Some say it’s actually closer to five minutes. These minutes are for a decision that is worth upwards for $10,000 for you and your employer on an annual basis, or more than $20,000 for you and your family. If you get sick and need to use your insurance, that 15 minutes or less can be very costly.
So, rather than looking at the marketing material with smiling faces and bold colors, seek out and read the fine print. If you don’t understand something, ask questions of your HR administrator or broker, or your friends and family. Figure out what is best for you, look beyond just the cost, and make a decision that works. As Shawn wrote, the good thing about benefits is that you can usually change after a year. But an extra 30-45 minutes can give you that much more confidence in the present that you’ve selected the right benefits.
This advice goes doubly for once you have your benefits. Rather than just arriving at the doctor’s office and showing them your card, know your coverage before you go. That way, you’ll have less worry of disputes or misunderstandings down the line.
Example: Two people I know, one being my mother, have had disputes about what is covered under Medicare Advantage and Medicare Supplement plans. In my mom’s case, she was working on behalf of my stepdad to get an injury checked out. It turned out that what they thought should have been covered ended up costing them $1,500, which as we know can be a giant cost when you’re on any kind of fixed income. But, having read the fine print, my mom was adamant that the service should have been covered. It turned out she was right. Somebody had entered the wrong billing code for the service, which made it appear as if it weren’t covered. The fact that she had both read the fine print and had also asked the price and coverage up front (see No. 2 Intention) made her a lot more prepared to save money when she needed.
No. 2: Ask the price, always.
Asking what something costs may seem like a no-brainer if you haven’t had much experience in the healthcare world. But if you have, you know that it can be a frustrating labyrinth of confusion. Still, you should do it because it will not only make you more prepared as you get older and have to deal with the system more frequently, but it may also save you money in the present.
Example: When dealing with a recent medical issue with one of my children, I religiously asked what things would cost and found, much to my dismay considering I thought I already knew a lot about benefits, that my insurance rate for “covered” services was often TWICE as much as my “cash” rate. That meant that I could pay, say, $75 for an x-ray if I told them not to apply my insurance or I could pay $150 if I applied my insurance. That was my rate, not the total cost with my insurer picking up more than half of that rate. The catch was that, if I paid cash without my insurance, applied, the expense also wouldn’t apply to my deductible, which in turn meant longer for me to reach my deductible on my HDHP.
This practice sucks, but that’s a topic for another post. What it told me was that I had to be very mindful of what I wanted covered by insurance and what I didn’t, because ultimately it would mean hundreds or even thousands of dollars in savings or potential extra costs.
Be warned: You will become very, very frustrated when you ask the price for things. The example above regarding the x-ray took about six calls to the provider, x-ray facility and insurer before I got even a semi-straight answer. But ultimately it helped me realize something that years of simply reading the fine print did not. It also empowered me to move forward with ways to better equip myself to save in the future.
One more example that can really save you money: If you are ever admitted to a hospital — which you may want to avoid unless absolutely necessary but again, that’s a topic for another post — make sure you read the bill that comes to you and talk to someone at the hospital about it. Frequently, there are mistakes on hospital bills. And even when there aren’t mistakes, there are outrageous costs. Sarah Kliff of Vox has worked on a hospital bill project for the past year and both the stories and advice are great, if shocking. The main piece of advice for this conversation is that hospitals will frequently lower your bill if you simply ask them. We had our bill lowered when my wife had our second child because we called and asked. They also gave us a full year to pay for it, so we were able to set up a direct routing of my HSA funds to the hospital to pay our (reduced) bill. I’m not sure why it’s so easy but it tells you something about how much hospitals overcharge and how little they want to deal with people who want to ask them questions about it. I certainly can’t guarantee that it always works for all circumstances, but you could save yourself and awful lot of money by just picking up the phone.
No. 3. Use your benefits to the fullest extent.
Insurance companies make money in basically the same way casinos do: playing the odds in such a way that the house wins more than you do. But unlike casinos, insurance frequently has much smaller margins. If you were to use everything you can on an annual basis, assuming you didn’t have a major medical need (injury, pregnancy, chronic condition) of some kind, what you put into your coverage would come close to equal what you get out of it, minus administrative costs.
This example is far more clear for things like dental and vision, where insurers can and will underwrite for preexisting conditions. If you get two teeth cleanings per year and have one cavity filled, you’re about break-even on what you pay vs. the value you get in return. Likewise, if you get one eye exam and one pair of glasses or contacts per year, you’re about break-even for vision coverage, plus you’re covered if/when you have an emergency. On the flip side, if you only make it in for one teeth cleaning per year, you’re likely paying more than the value you’re getting in return, even if you’re employer has negotiated a great rate. (Or, if you have free dental through your employer, you’re costing them more money, which ultimately comes back around to you in less available funds for raises, bonuses, perks, etc.) The same applies to wellness programs, telemedicine, and other services.
So, make sure you take a look at all of the benefits available to you, that you do your best to use what’s best for any given situation. That way, when you get to the end of the year, you’ve hopefully gotten the most value out of your benefits and saved as much of your own money as possible — money you can put toward your FIRE savings goals to make it to retirement that much sooner!1