If you have diabetes, managing your day-to-day health can seem like a full-time job — not to mention staying on top of doctor's appointments, paying medical bills and ensuring you have the right insurance coverage. But as the end of the year approaches, it's a good idea to take a look at your deductible, flexible savings account (FSA) or health savings account (HSA) and maximize your savings.
Understanding your insurance deductible
A deductible is the amount of money you pay out of pocket (OOP) for healthcare services before your health insurance will kick in. The share of the U.S. adult population in private health plans with deductibles of $1,000 or more doubled between 2010 and 2020, while deductibles for Medicare drug plans were required to be lower than $480 in 2022.
Deductibles reset at the beginning of each calendar year, or when you enroll in a new plan. Depending on your plan, certain preventive care, services that charge a copay, prescription drugs and emergency room services are covered before you meet your deductible. The total amount of your deductible and whether it's combined for medical and prescription varies per plan:
- If you have a combined prescription deductible, your medical and prescription costs will count toward one total deductible. Usually, once this single deductible is met, your prescriptions will be covered at your plan's designated amount.
- If you have a separate prescription deductible, only prescription costs will count. No other covered medical costs (such as visiting the doctor's office) will count toward your prescription deductible.
Once you reach your deductible, your insurance plan starts paying its share of costs and you pay your share. That's why healthcare items purchased at the beginning of the year may cost more. If you need to pay for medical expenses regularly, i.e., if you have diabetes, knowing how close you are to meeting your deductible can help you control these costs. If you've met or are close to meeting your deductible, your OOP costs will likely be lower for medical treatments and services.
Making the most of your deductible
While it's a predictable calendar event, when medical and prescription deductibles reset in the new year, healthcare becomes more expensive. This is especially true for anyone with a chronic condition like diabetes — you must meet your deductible again before your OOP costs will decrease. If you've met your deductible for the current year, you're likely to pay a lower cost for medical visits, prescription drugs and more, compared to what you'll pay if wait until the after the new year.
If you're not sure whether you've met your deductible, call the number on the back of your insurance card or check your Explanation of Benefits. If you have met your deductible, be sure to:
- Refill prescriptions — like Gvoke HypoPen® (glucagon injection), the rescue pen that all patients on insulin need to manage severe lows.
- Schedule doctor's appointments or lab tests.
- Stock up on diabetic supplies like insulin pumps and continuous glucose monitors.
What is an FSA and HSA?
An FSA (or HSA) is a special account you put money into that you can use to pay for certain healthcare costs. You don't pay taxes on this money, which means you'll save an amount equal to the taxes you would have paid on the money you set aside. You can use FSA or HSA funds for:
- Certain medical and dental expenses for you, your spouse or your dependents.
- Deductibles and copayments, but not insurance premiums.
- Prescription medications, as well as over-the-counter medicines with a doctor's prescription. Reimbursements for insulin are allowed without a prescription.
- Medical equipment like crutches, supplies like bandages and diagnostic devices like blood sugar test kits.
Making the most of your FSA or HSA
Before the end of the year, check your FSA or HSA account. If you have money left, make sure your prescriptions are up to date and don't require renewals before the holidays. At the end of the year or grace period, you will likely lose any money left over in your FSA — so plan carefully!
Typically, you need to use FSA funds within the plan year, but you may have options: your employer might offer a "grace period" of up to 2.5 extra months to use the money in your FSA, or they might let you to carry over up to $570 per year to use in the following year. Be sure to find out.
Before you know it, the new year will be here. Get started now to ensure you don't have to scramble to see your doctor or order prescription refills. Managing your diabetes is a lot of work, but knowing you might be able to save money on some of your healthcare expenses can help ease the stress and financial burden.