How to Choose Health Care Plans
Unfortunately, it’s never really been easy to choose the right health care plan- and the healthcare reform has further complicated things, especially for those who are choosing plans that are offered by their employer.
In addition to considering the various premiums, deductibles, co-pays, and more- you will need to consider some of the new provisions that have been implemented that could have an effect on your coverage for the coming year. Following are a few tips that can help you clear up the confusion and help you determine the best plan for you during open enrollment.
Check for Exemptions: How to Choose Health Care Plans
If your employer doesn’t really make any changes in your insurance plan, you may be “grandfathered in.” This means that you won’t be subject to some of the provisions in the healthcare reform laws. This includes free coverage, that is- no copay- for preventative services such as mental health screenings, blood pressure checks, immunizations, and smoking cessation programs. Take time to review the plan materials, as these will advise you as to the benefits offered with the plan as well as whether or not it is grandfathered in.
Determine the Plans that Meet Your Need
When you are reviewing the healthcare plans, you should know that there are typically 3 types:
- Health Maintenance Organizations (HMO): requires that you use certain physicians, which makes the cost more affordable- but also decreases your flexibility.
- Preferred Provider Organizations (PPO): allows you to stay “in-network” or go out of network. If you choose a physician that is “out of network”, you will pay a higher fee. The out-of-pocket costs are typically higher for a PPO than an HMO.
- Point-of-Service (POS): combine elements of both PPO & HMO. You have the option to pay more for going out of network, but you typically have to choose a PCP (primary care physician) that is within the network and receive a referral before seeing a specialist.
Check for Changes
Before you re-enroll in a plan, take the time to review the plan for any changes. This could save you from being shocked by unexpected expenses if costs changed any. For example, your plan may no longer cover chiropractic care or the cost of having coverage on your spouse/family may have increased. So, it might end up being a good thing to change plans. Chances are though, any changes in your monthly premiums are due to the cost of healthcare going up across the board.
Take the time to consider how your needs have changed. For example, if you’re planning to start a family, you may want to make sure the plan you choose offers maternity coverage. Perhaps you need to add an adult child back to your policy. With the new reform laws, plans must cover children up to the age of 26- but some grandfathered plans may now exclude these individuals, especially if they have access to healthcare benefits through their own employer. Insurance plans can no longer exclude adult children for having pre-existing factors such as cancer or asthma.
Consider Your Favorite Physicians
Before you switch to a new plan, be sure that your PCP and preferred specialists are included in the network. Women who are not in plans that are grandfathered do have the freedom to choose an OB/GYN without obtaining a referral. However, they do still need to make sure that the physician they choose is part of their plan’s network if they have an HMO or want to avoid any additional fees with a POS plan.
Consider the Cost
Find an online calculator to compare the total cost of various plans. For example, if you are healthy and young- you may want to trade off the pricey premiums for higher deductibles- that is, pay more out of pocket before your coverage begins. Make sure that you also factor in your co-pays (what you pay to visit a physician) and the co-insurance (what you pay out of pocket for any prescriptions or hospitalizations).
While it’s true that most of the new plans allow you to receive routine preventative care at no cost, you may not need to switch plans to get this same benefit. Most plans were already offering these services at minimal to no cost before healthcare reform was passed.
Open a Healthcare Expense Account
In order to save on your premiums, consider establishing a healthcare savings plan to pay for your prescriptions, contacts/eyeglasses, and other medical expenses. Any contributions to your healthcare savings account are subtracted from your income before taxes are taken out. However, there are also some drawbacks. You will have to pair your HSA with a high-deductible plan of $1,200 for an individual and more for family coverage. A flexible spending account (FSA) can be combined with any plan type, you will lose the leftover contributions at the end of the year.
Check the Rx Coverage
Take the time to review the prescription coverage because plans may add or drop certain medications that may have been covered/not covered the prior year. Therefore, be sure that the medications you take on a daily basis are still covered. You can find this information in the plan’s medication list/formulary- and is typically found online. In addition, ask about discounts on generics and whether you can save some money by getting prescriptions in the mail.
Take Advantage of Wellness Incentives
There are some companies that offer cash incentives to their employees for completing a lifestyle questionnaire that covers questions such as smoking habits and exercise. An employer can use these assessments to encourage their employees to participate in wellness activities such as smoking cessation, fitness programs and more. Employers can offer these wellness activities on site to make them easier for their employees to participate in.
Reconcile Your Coverage with Your Spouse’s Coverage
If you have a spouse or child that is covered under your plan, make sure that your employer is contributing the same amount towards family plans. Some of them have started charging for each independent, which can make it expensive to add your adult child back to your plan. In addition, some employers are adding surcharges for adding spouses who have employers that offer insurance. You may learn that it’s not cost-effective to keep your spouse on your plan after all.
Hope for the Best- Plan for the Worst
According to the experts, you may want to consider a plan with a lower premium. After all, if you were ever laid off, would you be able to continue your coverage through COBRA on a high premium plan? Employees who are laid off have to pay the entire cost for themselves- which is hard if you no longer have a steady income.
Choosing the right health care plan can be quite difficult, especially with health care reform complicating things. However, keep these tips in mind and you’ll easily navigate the turbulent waters of health insurance.