How to Include Plannable Procedures into Financial Plans
August 2, 2022
Your conversations with clients likely mostly span financial topics that you’re familiar with: investments, mortgages, estates, and so on. But how do you handle situations when a client brings up that they are expecting a medical procedure? Chances are that a large portion of your clients will need common services like a joint replacement or colonoscopy at some point in their life, and these procedures will likely come up in more conversations than you might have originally thought!
Healthcare costs vary widely depending on where someone goes for care, whether they have insurance or not, what kind of insurance they have, and even other personal factors (eg. pre-existing conditions). Despite this, there are many plannable healthcare procedures you can financially plan for. As long as you know some basic information, it becomes pretty simple to include certain procedures into a financial plan.
What is a plannable procedure?
A plannable procedure is essentially any medical procedure that is not an emergency. This could be joint replacement surgery, a colonoscopy, an IVF procedure, LASIK eye surgery, etc. These are all situations where your client has likely sat and thought about getting this procedure done before actually going through with it. Because they have the time to research where to go based on quality and recommendations from other medical professionals or even friends/family that have had the procedure, they also have time to plan for this procedure financially. Taking the time to search and compare prices between facilities that offer the particular procedure your client is looking for can mean the difference between a few thousand dollars and tens of thousands of dollars.
How to financially plan for joint replacement surgery.
Nearly half of Americans will develop knee osteoarthritis in their lifetime. The treatment for this condition is often knee replacement surgery. Hip replacement surgeries are also very common in the U.S.
Most insurers, including Medicare, will cover at least part (if not all) of a joint replacement surgery. How much they’ll cover depends on the health plan and the nature of the procedure. Advise clients to speak with their medical team and their insurer about the procedure to ensure it’s being categorized as medically necessary and to find out how much of the procedure will be covered.
If your client has a health insurance plan that will cover all or most of the procedure so long as they go to an in-network facility, going to an in-network facility is their best option. However, if your client has a health insurance plan where they’ll pay for the majority of the procedure out-of-pocket no matter where they go, finding a high-quality facility with affordable costs should be their priority. One recommendation would be to look into ambulatory surgical centers as an option.
In 2019, 99.3% of patients who received a joint replacement procedure in an ambulatory surgical center had an infection-free surgery and were discharged without requiring a hospital visit. This is great news for clients hoping for a quick recovery (which, let’s be honest, who doesn’t want that?) Ambulatory surgical centers are also, on average, more affordable than large hospitals. In fact, one report showed that outpatient surgery centers can be 45-60% less expensive than hospitals.
How to financially plan for colonoscopies.
The CDC stated that “In 2018, 67% of U.S. adults aged 50–75 years met the U.S. Preventive Services Task Force recommendations for colorectal cancer screening; 60.6% had a colonoscopy in the past 10 years.” Colonoscopies are a common outpatient procedure, but payment can get complicated.
The Affordable Care Act requires that both private insurers and Medicare cover the costs of colorectal cancer screening tests. The law stipulates that patients shouldn’t be charged any out-of-pocket costs, such as copays or deductibles. However, the concept of "guaranteed coverage" allows many insurers to look for loopholes so they can avoid paying for these tests. For example, Medicare beneficiaries might have a co-payment if their doctor finds a polyp during the screening. This is because the screening is then coded as a diagnostic colonoscopy instead of just a screening. So, although most clients’ screenings will be covered, they might have a copayment or owe a portion of the bill if a polyp is found or if complications arise during the colonoscopy and additional care is given.
Medicare patients can access the Procedure Price Lookup Tool to compare payments and copayments for colonoscopies and other medical procedures performed in ambulatory surgical centers and hospital outpatient departments (HOPDs). For people on private health insurance, their best option is likely to go to an in-network provider.
How to financially plan for IVF.
IVF (in vitro fertilization) is a series of procedures used to help with fertility or prevent genetic problems and assist with the conception of a child. IVF can also be done if someone has medical conditions such as endometriosis or uterine fibroids, and is becoming a more common medical expense among younger clientele.
As with most of the procedures mentioned in this blog, it depends on a client’s insurance plan as to whether or not their procedure will be covered by insurance. IVF is no exception. If you have a client interested in IVF and they have health insurance, they’ll want to call their insurer to ask if IVF is covered or not. Even then, “covered” likely means that your client will still pay for a portion of the procedure. Since the average cost of an IVF cycle is $16,108.57 (and that doesn’t even include medications or other additional treatments), your client could end up paying thousands for this procedure. Fertility Space has an excellent example of how much someone could potentially end up owing even if their insurance covers part of the procedure:
“IVF cost at the clinic is billed to insurance: $20,000
Your Insurance Coverage
Max out-of-pocket: $2,000
First, you'll pay the $500 deductible. Now your deductible has been met for the year!
IUI cost $20,000 - Deductible $500 = Remaining Cost $19,500
But there’s still $19,500 left on that bill. Now that applies to your co-insurance.
Remaining Cost $19,500 * 0.2 (20% coinsurance) = $3,900 Coinsurance
So of the remaining $19,500 on the bill, your coinsurance amount would be $3,900. Except it won't be!
Remember, your max out-of-pocket on your plan is $2,000. That means you won't pay more than $2,000 if your insurance plan covers IVF.
Your bill for IVF = Deductible $500 + $1,500 Coinsurance = Total Cost $2,000”
HSAs are an excellent option to fund the out-of-pocket costs clients will incur from IVF.
IVF is typically done at fertility clinics, although it is possible that for certain parts of the procedure cycle someone might need to visit a lab or a hospital. Clients can consult with their physicians and gynecologists on where to go for IVF, and/or they can use resources like this one to search for clinics all across the country.
How to financially plan for LASIK eye surgery.
This one is a bit easier to plan for financially because Lasik eye surgery has been operating outside of the “traditional” healthcare payment model for years. Lasik eye surgery providers have been transparent about their prices since the procedure was first invented, making it much easier to shop around and plan for the cost.
Insurance companies consider LASIK eye surgery a “cosmetic” procedure and therefore do not cover the cost. Because laser eye surgeries are excluded from traditional insurance though, this has created a “free market” for facilities that offer this procedure. They can actually advertise their prices and compete with other facilities because their prices don’t fluctuate like other procedures do when insurance is brought into the mix.
Even though insurance won’t cover LASIK, clients could use their HSA to cover the cost. Otherwise, clients will simply pay out-of-pocket for LASIK eye surgery. The average cost of this procedure in the U.S. is $2,632 per eye.
Since LASIK is rarely covered by insurance, clients are free to shop around for a surgeon. A good place to start is their optometrist; they can likely give recommendations on surgeons.
Not all healthcare events are emergencies. In fact, there are many healthcare services and procedures that can be planned well in advance. You and your clients can include these plannable procedures into the financial plan by assessing their medical needs, their insurance situation, and personal preferences. This will not only take a lot of stress off your client but will also add value to your comprehensive financial planning capabilities. And if you need help with healthcare planning, our team is always ready to answer questions.