Find a pen and paper, search your hard drive for that excel spreadsheet and wipe the smudges off of your reading glasses: It’s open enrollment time! Whether you’re on your own or covering your whole family, there’s a lot to know as things heat up in the health insurance marketplace.
Where should you start your research going into 2018?
HealthCare.gov, provides information about how to choose a health plan, straight from the government.
Three key things to consider are:
- What type of health insurance plan is best for your needs?
- What your premiums, deductibles and co-pays will cost under the plan you choose.
- How the plan divides costs between the insurer and you.
Compare health insurance plans
Of the many health insurance plans and coverage options, here are four of the most common:
- High-deductible health plan (HDHP): At its core, the HDHP covers severe injury or illness. Think of it almost as security blanket coverage. The other side of the coin with HDHP’s is that the out-of-pocket costs are higher than other plans. According to the Office of Personnel Management, it provides insurance coverage and a tax-advantaged way to help save for future medical expenses when combined with a health savings account.
Health Savings Account (HSA): This is exactly what it sounds like—a savings account that offers incentives for staying healthy—and is generally a better choice for people without chronic conditions. The money deposited into an HSA is pre-tax (up to a $6,750 limit in 2017) and earns tax-free interest.
You can also invest the HSA in stock markets, for even more gain on contributions. And when you use it for a medical expense, that spending remains tax free. Perfect for those who don’t have any major health concerns or need consistent visits to health care specialist. You also don’t need a PCP’s referral.
- Health maintenance organizations (HMO): An HMO is a plan that includes a network of providers, services and hospitals who oversee covered services. You choose a primary care physician (PCP) who generally oversees and manages your care. To see a specialist and have that visit paid for, you need a referral from your PCP.
According to the OPM, you have a copay for visits to your PCP or specialist. Beyond that, you usually do not have additional cost for services. Under what is called a reciprocity agreement, care from out-of-network providers under the plan might be covered. Providers outside your plan are not covered, unless you are seen for emergency care, which is covered.
- Preferred provider organizations (PPO): According to HealthCare.gov, this type of plan offers a bit more flexibility than an HMO. You can use out-of-network providers, services and hospitals, but the services will cost more. Staying within the network saves costs, but for those who need a little more flexibility, for instance when one of their physicians is not part of an HMO, a PPO is a good option.
- Point-of-service plans (POS): With this plan, your primary care provider must be in the network and acts as the primary “point of service” for any of your medical needs by providing referrals for other services. Like an HMO, you must use services within the plan’s network.
Your out of pocket expenses
Another situation: what if you know you’ll have some preventive procedures coming up in the next year, such as scheduled testing like colonoscopies or mammograms?
The long and short of it? The Affordable Care Act has required health plans to cover routine screening tests since it started in 2010. But, each insurance plan may vary in the parameters around testing frequency or any further out-of-pocket cost.
As a standard under Medicare, mammograms are covered once every 12 months for women 40 or older, and a number of different colorectal cancer tests are covered at varying intervals based on risk, starting at age 50.
Deductibles, copays, coinsurance and out-of-pocket maximums are all terms that can make trip you up. However, they are important in keeping you savvy on the true cost of your health insurance plan.
Here they are at a glance:
- Deductible: The amount you pay before your insurer pays
- Copayments and coinsurance: Your payments for medical services
- Out-of-Pocket maximum: What you have to pay before your insurance takes over paying 100 percent of the costs
Who pays for what?
As HealthCare.gov explains, the breakdown of what you pay and what the plan pays is categorized by precious metals—platinum, gold, silver and bronze. For example, on the platinum level, the insurance company pays 90 percent, and you pay 10 percent. On the bronze level, you have a 60-40 split, with you paying a 40 percent share of the costs. The website cautions that these categories “have nothing to do with quality of care.”
After speaking with Kristi Speers, director of Managed Care at Banner Health Network, she drove home a couple other familiar things to consider when choosing a health plan.
“If you have an existing medical condition and take specific medications, you want to make sure the plan you are choosing will cover them and at what cost,” she noted.
“Also, if you see certain specialists for care and are choosing a PPO or HMO, make sure they are included in the plan’s network. Looking at the medications covered (called the drug formulary) and the participating physicians, is very important for those with chronic conditions or who have preferences.”
She also noted participating providers often change, and the literature or the plan’s website may not list these providers. It’s important to call the office to double check they actually take your plan before you make an appointment.
Lastly, don’t forget to read your plan’s “Summary of Benefits and Coverage” to find out exactly what the plan covers. More importantly, it will also tell you what it doesn’t cover.