OPEN ENROLLMENT SEASON is here. Whether you select your health insurance through an employer, Medicare or a government exchange, October and November are when most Americans have the opportunity to switch plans.
While shopping for health insurance can seem overwhelming, breaking down the process can help make it easier. “If people take a step back and go through a checklist, what appears to be daunting can be simplified,” says Fran Soistman, executive vice president and head of government services for the health insurer Aetna.
With that in mind, here are seven items to consider as you compare health insurance plans this fall.
Premiums. “It’s very understandable for people to zero in on the premium,” says Julie Stich, associate vice president of content for the International Foundation of Employee Benefit Plans. Since premiums are the amount of money you’ll pay every month for coverage, they are the most obvious expense associated with health insurance.
While it’s important to find insurance that fits your budget, the cheapest plan may not be the best. Low premiums can mean higher deductibles or a restricted network. Instead of buying based on premiums alone, the monthly cost should be just one criteria you consider when selecting a plan.
Out-of-pocket expenses. Most health insurance plans come with several out-of-pockets costs. The deductible is the amount you’ll pay upfront before insurance coverage begins. Some preventive care services, such as immunizations and certain cancer screenings, can be exempt from deductibles, thanks to the Affordable Care Act.
Health insurance policies may also charge copayments and coinsurance once a deductible is met. A copayment is a flat fee for a particular service, such as a $30 charge for doctor visits. Coinsurance is a percentage of the total cost of care. One of the most common types of coinsurance found in health insurance policies is an 80/20 split. This requires patients to pay for 20 percent of the bill while the policy covers the other 80 percent.
These out-of-pocket costs can sometimes be difficult to decipher. “A financial planner is going to be able to help you navigate the fine print,” says Allison Brill, vice president and wealth strategist at the financial firm PNC Wealth Management. If you don’t have an advisor, talk to your human resources office if you’re buying through an employer, or contact the insurer directly with any questions you have.
Prescription drug coverage. It’s not enough to know your plan has prescription drug coverage. It’s also important to know that your specific prescriptions will be covered. Many insurers use formularies, or lists of covered drugs, that categorize prescriptions into tiers. Generics may have a low copay, while brand name drugs cost more. And keep in mind, some insurers may require patients to try lower-tier drugs first or get prior authorization before the plan will pay for expensive medications. Adderall for attention deficit hyperactivity disorder and Humulin for diabetes are two examples of drugs that may require prior authorization.
Health savings account eligibility. A health savings account, often called an HSA, can be a valuable financial tool. In 2019, singles can make up to $3,500 in tax-deductible contributions to an HSA. Those with a family plan can contribute up $7,000 tax-free. People age 55 and older are entitled to make an additional $1,000 in catch-up contributions.
Only those with a qualified high-deductible health insurance plan are eligible to contribute to an HSA. For 2019, qualified plans are those with minimum deductibles of $1,350 and maximum out-of-pocket costs of $6,750 for coverage for a single person. Family plans must have a minimum deductible of $2,700 and maximum out-of-pocket costs of $13,500.
A high-deductible health insurance plan isn’t right for everyone. While their low premiums can make them an attractive choice, they are typically best for those who are healthy and expect to have minimal health care needs. If you do opt for a high-deductible plan, look for one that is HSA eligible so you can pay your out-of-pocket costs with tax-free dollars.
Networks. Gone are the days when health insurance policies let you go to whichever doctor you prefer. Now, most policies have networks of participating providers. Using a physician or facility outside the network could result in higher copayments or even a denied claim.
Before switching health plans, ensure your preferred doctors will be covered. Since networks can change each year, it’s smart to double-check the physician list before re-enrolling in your current plan as well. “It’s really one of the most important things,” Stich says.
People should also consider the type of policy that will be best for their situation, Soistman says. “If they’re going to be traveling a lot, they may be better off looking at a PPO (preferred provider organization) option instead of an HMO (health maintenance organization),” he explains. HMOs may have more limited networks and require all care be coordinated by a primary care physician, while PPOs may provide greater freedom to pursue care without a referral.
Available perks and benefits. Many health insurance plans offer complementary resources to their members. These are most often wellness programs that help promote good health or tools to make it easy to manage benefits.
For instance, Aetna gives members of certain Medicare Advantage plans a free gym membership through the SilverSneakers program. The company also offers Resources for Living services, which connect people to community resources such as rides to doctor appointments, free counseling sessions and legal consultations. Other insurers, such as Priority Health in Michigan, have robust online portals that allow members to track claims, make doctor’s appointments and connect with health care professionals via video chats at any time, day or night.
These perks can help sweeten the deal on insurance, but Brill says people should be wary of overpaying for a policy with services they don’t need.
Your claims history and future expectations. Knowing a plan’s deductibles and network details is most helpful when viewed in the context of your health history. Stich says people should look at their claims from the previous year for guidance on the upcoming year’s enrollment. She recommends people review whether they met their deductible, which prescriptions they filled and which specialists they saw. Then, consider whether you expect the upcoming year will be similar. If you’re anticipating life events such as marriage, the addition of a baby or a major surgery, you’ll want to ensure your insurance will provide adequate coverage for costs associated with these events.
