Medical Insurance, Net Income or Manually tracked?

My wife and I have just started our YNAB journey and are looking forward to gaining control of our spending.  We have a question about how to track the cost of medical insurance.

It seems like it should be in our budget since it's a voluntary expense, but it's not in the net that's automatically deposited in our account and recorded by YNAB.

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  • I wouldn’t bother. The information is captured on your W2 and paystubs, unless you have a qualifying life event your pretty locked in for the plan year, and you can’t decide not to pay it because your employer takes it out of your check.

    Like 4
  • Hi Colin !

    We strongly suggest dealing with Net amounts in your budget but Jesse made this Whiteboard Wednesday that goes over handling Gross paycheck amounts if you prefer that approach. :)

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  • While I agree with the answers given -- budgeting your net income is much easier -- I do think this is illustrative of how broken healthcare is in the United States. 

    Even highly budget-conscious individuals (i.e. people on a YNAB forum) generally don't bother to track their personal healthcare costs very closely and don't have a good grasp of the overall cost. They're usually aware of usage-based out-of-pocket expenses (copays, deductibles, co-insurance), but the monthly premiums and the portion paid by their employer is very out-of-sight / out-of-mind.

    I know that's sometimes used as an argument in support of HDHP + HSA plans -- forcing the consumer to absorb more usage-based costs and take a more proactive role in budgeting for those costs. But in my experience those plans disproportionately benefit the affluent. I happily abuse my HSA for its tax advantages and can afford to cover my medical expenses out of pocket. Meanwhile, those living on the edge often don't have the resources, knowledge, or discipline adequately save for their medical expenses and will often just forgo needed medical care because they can't afford it.

    Sorry for the political rant. My employer is in the middle of a very contentious benefit enrollment period right now, where the employee share of healthcare costs are going way up, and it's depressing to watch all the panic and confusion unfold, and this budgeting question touched a nerve :)

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      • jenmas
      • jenmas
      • 10 mths ago
      • 1
      • Reported - view

      bret I hear what you're saying. When we do annual enrollment, we get a summary of what we pay and what the employer pays as far as premiums (my employer pays most of it, my monthly premiums are extremely reasonable). The idea that we are going to shop around for our health care is slightly ludicrous. If I have a rare cancer, I'm not shopping around for the cheapest oncologist, I'm looking for the doctor with a track record of positive outcomes. If I'm in a car accident, I may be unconscious so I'm unable to shop around and I'll just wake up somewhere. If I'm stroking out, I'm going to where I can get the TPA the fastest because there is a limited window of time that the clot buster will work. If I'm in a rural area, I may be facing a monopoly so there is no shopping around.

      Like 1
      • bret
      • bret
      • 10 mths ago
      • Reported - view

      jenmas 

      Preaching the choir. 

      I was especially triggered when the broker/representative for my employer's HDHP plan was singing the benefits of HSAs during a presentation:  "We talked to our CPA last December and they helped us make extra contributions to our HSA to save on taxes!"

      So incredibly out-of-touch! How many $15 / hour employees have a CPA to consult with, let alone "extra" cash lying around. /rage
       

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      • Annieland
      • YNABbing every day since 2009!
      • Annieland
      • 10 mths ago
      • 1
      • Reported - view

      bret I am 100% with you.  I use net in YNAB, in my personal finance software I enter every paycheck with a breakdown split.  ANNNNND..... For every single medical expense I use the ancient abandonware Quicken Medical Expense manager.  I have all of my family's and my mother's data going back to 2005.  Every service, prescription, with amount billed, negotiated rate, amount any number of insurances might have paid, and my balance and if I paid it, or if I have it flagged for dispute.  People think I'm insane to do this, but I have caught THOUSANDS of dollars of errors in billing over the years.  And even when I catch a $12 error, I pursue it.  Because hey, what are we paying those premiums for??

      This data is also extremely helpful during open enrollment periods because it tracks deductibles and FSA expenses.  And even has a tax report.  If this thing ever stops working I'll jump off a bridge.  But especially with my mom, it has super opened my eyes to the mess that Medicare is when I dealt with all those statements.

      Like 1
      • bret
      • bret
      • 10 mths ago
      • 1
      • Reported - view

      Annieland 

      Congratulations on being more aware of your personal healthcare costs than 99.9% of Americans! I don't doubt that the effort you've put in has paid enormous dividends.

      Most people don't have that same level of awareness, and are at an enormous disadvantage when enrolling for benefits. Faced with a bewildering menu of health coverage options, full of unfamiliar terminology, and without a firm grasp of what medical services they're likely to need or how much they'll cost under different plans, its totally unreasonable & unfair to expect them to make the optimal choice for their situation. The insurance providers are holding all the cards here.

      Personally, I resent the idea that I should invest so much time and energy into financial planning for medical costs (and retirement savings, for the matter). I'm a parent, I have a full time job, I don't have time/inclination to be expert in all of these other things. It becomes just one more gap between the "haves" and "have nots" -- those with resources to figure this stuff out get further ahead, and others fall further behind. But I realize I'm wandering pretty far from the original topic, so I'll save my rant for another forum :)

      Like 1
      • Family D
      • familyd
      • 2 wk ago
      • Reported - view

      bret and  Annieland : while we are nowhere near where you guys are in terms of tracking and managing, we would like to improve and we've been thrilled with how YNAB has helped us. This topic is similar to one that we have been struggling with, which Annieland mentioned - tracking Medical Expenses. It's probably the most frustrating thing we manage (or don't ;-) in terms of our budget.

      Part of the problem (we feel) is that the medical bills are confusing. For example, just recently we received a bill from a provider that we knew we were down to about $200 balance. The bill shows a new balance for $1,000 and then provides medical treatments going back to 2011 as if to justify it! With all of the deductibles, insurance payments, etc., we now have to someone make sense of this ourselves IN ORDER TO be able to talk to someone at the provider with a chance to get this explained or corrected.

      My question is... how can YNAB help (CAN YNAB help) with keeping us in a better position? Annieland mentioned Quicken Medical Expense Manager. Does YNAB have anything like that or maybe another app/service or maybe just another way to approach it to help avoid this large medical provider statements that end up being time consuming and confusing to figure out?

      I would be very interested in any thoughts you have. Thanks!

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      • Annieland
      • YNABbing every day since 2009!
      • Annieland
      • 2 wk ago
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      • Reported - view

      Family D It's funny, this has to be a banner year for me as far as medical expense (mis)management.  I have so much catching up to do on these forums and replies to my mentions, so I'm starting with you!  I had surgery on Jan. 30 of this year, which was necessary but "elective" and I paid out of pocket up front as insurance wouldn't pre-approve it and I didn't want any hassle.  Then I get a $36,000 bill.  And then a $56,000 bill.  And then it kicks back to my insurance which pays everything.  And then they retract it a month later.  And then they're billed again a different amount, and pay that, and then reverse it, and again and again!  For what, 8 months now??  It's hilarious.  I just watch it go and let it burn.  I currently "owe" $3k which I'm ignoring because I know I don't.  If I had a psychiatric death-wish I'd put all this in my Quicken medical manager, so I haven't.  Which has also led me to ignore everything all year, and once my life gets just a leeeetle quieter I will have a lot of catching up to do.  So I hear ya!!!

      So to your question... back when I started doing this tracking I had very poor insurance, high medical bills, and I was just getting on my feet "adulting."  In 2007 my medical expense deductions from 2005 were audited by the IRS and I'd never been so thankful to have started that tracking project that I kept it up ever since.  Since then, major insurance websites have become much better at giving visibility to your medical expenses, accounts and claims.  But if you ask me, they still suck.  Still, it's better than it was 20 years ago.  You just have to understand the basic terminology.  I have no idea why I'm so much better at this than everyone I know (just yesterday I was on the phone with Metlife dental discussing orthodontic procedure codes for my daughter), but I end up helping friends and family understanding their statements and EOBs all the time.  

      I have never considered tracking any of this in YNAB, as far as specific medical line items.  I will occasionally use a flag or a memo about the specific person and date of service a payment applies to, or if a reimbursement is pending, etc.  A few years ago I noticed a website with software in development to manage this stuff, but I don't remember what it was.  If you want to get serious tracking this stuff then your best bet is probably an icky spreadsheet and start by setting it up just like an EOB with the patient, date of service, billed amount, approved (discounted) amount, paid by insurance, applied to deductible, payable by you, etc.  And the status.  Is it submitted? pending? in dispute? And NOTES NOTES NOTES.  

      As far as tracking reimbursables and HSA in YNAB, I finally took dakinemaui 's advice and set up a round buffer amount in the medical category ($500) a few months ago.  But I'm still trying to figure out if it's working for me because I have yet another routine bill in dispute because of an error in processing I'm fighting over, unexpected bills way over that amount that take forever to be processed, and my own dumb error in taking too much out of my HSA and having to pro-rate it against future bills.

      So, no easy answer!  Medical expenses are probably a concern for every single one of us, and there's really no one good way to track and handle them, except by trial and error, and maybe good luck which we apparently don't have right now.  Bottom line, get a handle on all your other expenses and become very comfortable with YNAB this year, and either keep notes or start a spreadsheet for medical.  Maybe make it a new year's resolution?  PM me if you need any help! :D

      Like 2
    • Annieland said:
      your best bet is probably an icky spreadsheet

      That's what I've had to resort to, with a column for "paid". Since payments typically cover multiple line-items, I put a payment "identifier" in that column in each of the relevant transactions it covered. For example, "Cap1-20.02.15" for a payment using my Capital One card on Feb. 15, 2020. (This is plenty to track down an authorization code if needed.) If I happen to make 2 payments on that day, I'd append a "b" to the end of the identifier.

      Being in a spreadsheet, it's easy to filter or sort when I need information. Which line items haven't I paid? Which are still pending insurance approval? When I get the bill from Dr. XYZ but I've already paid, I can call them so they get their records corrected. Etc.

      Oh, and include a comment cell to record information about communication: with whom I spoke or whether I left a message, what was discussed, additional hoops I have to jump through (e.g., send them some form), etc.

      Dealing with multiple bills and payments is the icky part. Having a spreadsheet to help stay organized makes it a little more bearable. I miss the days when we had an HMO (Kaiser) with doctors/facilities and insurance all integrated -- so much easier.

      Like 2
      • Family D
      • familyd
      • 2 wk ago
      • 2
      • Reported - view

      dakinemaui and Annieland : thanks for your help and suggestions. It sounds like this isn't necessarily a job for an app/service like YNAB, rather it is something to work out a system of tracking on your own. Thanks for the suggestions in terms of fields (columns) to include a spreadsheet. It looks like Google Sheets is the next method to try. Thanks for your help!

      Like 2
  • dakinemaui said:
    Oh, and include a comment cell to record information about communication: with whom I spoke or whether I left a message, what was discussed, additional hoops I have to jump through (e.g., send them some form), etc.

    Very necessary!  QMEM has an ability to timestamp every note in the memo box which I do.  Some of my notes include excessive amounts of profanity.  It would probably be pretty amusing to a 3rd party reader, but I never remember what I think I'm going to, and dumping it all in that little box after I get off the phone is valuable in a multitude of ways ;-).

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