health expenses ouch

Health Expenses - Ouch!

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.ht

m

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.