Affording Alternative Medicine

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Every year, Americans pay billions of dollars for complementary, alternative and integrative health care — chiropractic adjustments, acupuncture, massage therapy, biofeedback and more. But with very few exceptions, insurance policies typically don’t cover these treatments.

Alternative medicine accounts for as much as 11.2% of total out-of-pocket spending on health care. Despite its popularity, insurers tend to view this type of care as untested, experimental or scientifically at odds with mainstream medicine. It’s one of the more glaring disconnects in American health care and — for the people caught up in it — surely one of the most frustrating.

The good news is, consumers of complementary and alternative medicine (CAM) have options to help make their health care more affordable. Read about them here, then follow up with your medical practitioner and insurance provider to see which course of action offers the healthiest — and most affordable — option for you.

Why alternative medicine?

The benefits cited by advocates of alternative, complementary and integrative medicine include:

  • Non-conventional treatments often focus on the patient’s health as a whole instead of isolating and eliminating a single cough or itch.
  • Alternative medical treatments provide options for those concerned about the cost of prescription drugs and, particularly in the case of pain management, the potential for dependency and side effects.
  • In addition to physical benefits, many patients see improvements in their mental and emotional health. Certain treatments may have the beneficial side effect of stimulating the body to release endorphins, for example, creating a natural state of euphoria.

Key concept: types of medicine

A look at differing perspectives on medicine and health care

Also called mainstream or traditional, this term describes approaches to health care based on Western medicine.

A non-mainstream approach used instead of conventional medicine. Examples may include homeopathy, naturopathy and traditional Chinese medicine.

A non-mainstream approach used as a supplement to conventional medicine. Examples may include massage therapy, yoga and meditation.

A coordinated strategy using both conventional and complementary health care. Treatments such as chiropractic manipulation are often included in integrative medicine.

This acronym stands for Complementary and Alternative Medicine and in some cases also refers to integrative medicine. Another catch-all term for alternative and/or complementary health care is body and mind medicine.

Making the case to your insurance provider

Just because a treatment isn’t specifically covered by your insurance policy doesn’t necessarily mean it’s off the table. Some CAM advocates recommend documenting your alternative care and filing a claim for reimbursement with your insurance provider.

Instead of simply mailing in copies of your receipts, ask your primary care physician and your CAM practitioner to help you compile additional documentation that specifically addresses your medical issues. The information you’ll send your insurance provider can include:

  • A Letter of Medical Necessity (LOMN) from your primary care doctor advocating the need for treatment based on the determination that it’s integral to your health
  • An official diagnosis and prescription for treatment from your primary care doctor
  • A detailed listing of the treatments and procedures accompanied by their Alternative Billing Codes (ABCs) applying to alternative health care services including chiropractic care, massage therapy and osteopathy.

Thorough documentation can help make the case for reimbursement. Ideally, input from your primary care doctor will show that your alternative care has a conventional medicine seal of approval. If your insurance provider initially rejects a claim, you may be able to appeal by supplying additional documentation.

Health care savings and financing

Health care savings accounts weren’t created with alternative medicine in mind, but they can be useful tools for qualifying out-of-pocket CAM expenses. Those expenses may include treatments and products such as chiropractic care, acupuncture and over-the-counter herbal or homeopathic medicines.

The various types of accounts are not interchangeable, and it’s essential to know the differences.

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At a Glance: Health Care Savings Accounts

Flexible Spending Account (FSA) Health Savings Account (HSA) Health Reimbursement Arrangement (HRA)
Tax advantage Pre-tax contributions Pre-tax contributions Pre-tax contributions
Year-end rollover Up to $500 100% Employer’s discretion
Funding Employee/employer Employee/employer Employer

FSA (Flexible Spending Account)

  • May be offered through employer’s benefits plan
  • Employee contributes to account through paycheck deductions
  • Employer may also contribute
  • Can be used to help pay for out-of-pocket expenses
  • $2,600 limit on employee contributions per individual

HSA (Health Savings Account)

  • May be offered through employer’s benefits plan
  • Only available to people covered by a high-deductible health plan (HDHP)
  • Employee contributes to account through paycheck deductions
  • Employer may also contribute
  • Can be used to help pay for out-of-pocket expenses
  • $3,400 limit on employee contributions per individual; $6,750 limit for family coverage

HRA (Health Reimbursement Arrangement)

  • May be offered through employer’s benefits plan
  • Commonly paired with employer’s high-deductible health plan (HDHP)
  • Funded solely by employer contributions
  • Reimburses employees for out-of-pocket expenses and premiums
  • Limits on employer contributions vary according to type of plan

Pros and cons

PRO: Tax advantages
Health-care savings accounts offer tax advantages. Consider the potential tax benefits of an FSA as an example. With a yearly salary of $50,000 and a tax rate of 30 percent, contributing $2,000 pre-tax into an FSA translates to a $600 tax benefit.

CON: Rollover restrictions
FSAs require you to “use it or lose it” by the end of the benefit year, meaning that you would forfeit unused contributions above a $500 carryover allowance. Although HRAs generally don’t have this requirement, the employer can decide at the beginning of the year whether unused money can be rolled over. HSAs do not have “use it or lose it” rules, but they’re available only to those with HDHP insurance.

PRO: Availability
Availability of FSAs and HSAs has seen a general increase in recent years. For instance, an estimated 90 percent of employers offer FSAs.

CON: Eligibility restrictions
There may be strings attached when it comes to defining eligible treatments. An HRA could require extensive paperwork in filing claims for reimbursements.

Which one is right for me?

The list of IRS specifications on these accounts is long and complex, so get informed before making a decision. Talk to your employer to see what’s available and find out what kind of alternative care might be eligible. Also, ask your health care provider and financial advisor for a recommendation.

What about health care financing?

You may be able to finance some out-of-pocket expenses through a health care loan or health care credit card. Each kind of financing has advantages and disadvantages.

The key thing to remember is that most financing agreements aren’t designed to make purchases more affordable; they simply make the process of paying for them more manageable.

Health care loans

This form of financing for alternative health care may be available through a commercial lender. Zero-interest loans are rare, however, and the types of eligible treatments may be limited. Also, your overall creditworthiness can greatly influence your ability to get this kind of loan.

Health care credit cards

On the plus side, the application and approval process can be quick and easy. Some offers provide zero interest or low interest if you pay off the entire balance within a short introductory period. In general, though, you should always make your payments on time and in full to avoid late payment penalties and damage to your credit score.

Work with your provider

As the old saying goes, you never know what you can get if you don’t ask for it. Health care professionals, both conventional and alternative, may be willing to work out a deal that helps you control your costs.

Tips from consumer advocates include:

  • Ask if there’s a discount for paying your entire bill up-front
  • Ask about setting up an extended payment plan
  • Get help from a payment-assistance program

Above all, don’t be reluctant to ask any cost or payment-related questions you have about your treatment. It’s not just about money — it’s about your health and well-being.