Jean Chatzky
Open Enrollment for 2019 healthcare coverage opened on November 1st and closes this Saturday, December 15th. And it you don’t enroll by then, you won’t qualify for coverage until next year. If you still haven’t signed up yet because picking a plan stresses you out or it’s confusing, you are not the only one. After all, healthcare is not a “one size fits all” plan. Here are some guidelines to help you pick the best plan that will fit your needs.
Understand your plan’s design
Paul Ketchel, CEO of MDsave, says that first thing you need understand is a plan’s design. The main components of all health plans are the following five things. Once you have a grip on what they are, it will be easier to compare apples-to-apples.
* Deductible: the amount you pay out-of-pocket before your benefits start covering your costs.
* Premiums: the amount you pay each month to have the plan.
* Coinsurance: a percentage of the cost of service you will be responsible for even after your deductible is met. A coinsurance charge is most common for high-cost services like inpatient care.
* Copay: a flat fee you are charged whenever you have a service. Very common when you fill a prescription or have a doctor’s visit. Usually, you won’t have to pay a copay and coinsurance for the same services, but be sure you know which procedures require which type of contribution.
* Out-of-pocket maximum: the most you can be held financially responsible for under that year’s plan.
Do your homework
“No one said it would be easy—but wouldn’t you rather put in the time and work now to do some research on what coverage is best than pay the price down the line?” says Jeff Bakke, Chief Strategy Officer of WEX Health. According to Bakke, Millennials are more likely than Gen X’ers and Baby Boomers to seek out information on healthcare costs and check whether their plan covers certain procedures. So take a hint from a Millennial and research, research, research. Use the categories outlined above to see how the different plans you are being offered stack up against one another.
Then do the math
Many exchanges, as well as employers, offer choices of different health plan options. “Usually lower-[premium] cost health plans come with higher deductibles or a more limited network—make sure you are taking all of that into consideration when you’re making your choice,” says Bakke. It’s important that you don’t just pick the cheapest policy without understanding it. “If your deductible is higher, what will that mean for your bank account for the year?” says Bakke.
Consider your past
Figuring out what you paid last year can be an important predictor of what your expenses may be in the next year says Bakke. “If you have a prescription medication that you take regularly, or if you have a chronic condition or ongoing ailment, what was the annual out-of-pocket costs to you?” says Bakke. That can provide a good guideline number to compare coverage costs for the options you have at open enrollment. It’s also a good starting number of what you might want to try to set aside for medical costs for the year. If, like many people, your options include higher deductible health plans that come with the option to open a Health Savings Account, make a plan to contribute to that account automatically throughout the year. The tax advantages of these accounts — which allow you to take a tax deduction for making contributions and use money to pay for medical care tax free — are akin to saving 25% on all the medical costs you run through them.
Think about your life stage.
Single? That removes a layer of complication when figuring out which health insurance plan to choose. “If you’re married or planning to be, then things get a little more complicated—which spouse has the better insurance plan? You don’t want to be over-insured or double insured and paying too much in premiums,” says Bakke. You also need to consider if you will be having children in the near future — because if so, you need to pick a plan with that in mind.
With Hattie Burgher
Chris O'Shea
