Time to Choose

Richard Quinn

IT’S OPEN ENROLLMENT season for many employer health plans, Medicare and plans offered through the health care exchanges. The window of opportunity can range from a few weeks to perhaps a month.

Sadly, in my experience, most people wait until the last day or two and then make a quick decision. Even worse, they ignore the communications they receive and make no decision, leaving in place for another year the coverage they currently have. This can be a big mistake.

Every year, plan provisions change, prices change, family circumstances change and health status can change. It’s essential to take the time to assess what coverage is best for the year ahead. Here are 10 tips:

1. Look at what you and family members actually spent on health care this year. Is there any reason to believe it will be different in 2019?

2. Do you have a chronic condition with predictable expenses each year? That’ll heavily influence the plan you choose, including which doctors it allows access to and how large your out-of-pocket costs could be. It should also guide how much you stash in any flexible spending account for medical expenses.

3. Are you aware of upcoming procedures or treatment? You may want to commit to contributing more to your flexible spending account in 2019.

4. Consider how much in out-of-pocket costs you’re willing and able to assume. Then compare that to the copays, deductibles and out-of-pocket maximums on the coverage you’re considering.

5. Look at your coverage options and compare your potential out-of-pocket costs with the premiums you’ll pay each month. You may find the potentially higher out-of-pocket costs on a less expensive policy are offset by the lower monthly premiums—and thus there’s no need to pay the higher premiums for the “best” coverage. Fear of health care costs leads many people to over-insure.

6. Contribute at least some money to a flexible spending account, if it’s available. Sure, there is a “use it or lose it” provision, but few people lose any significant money. As you consider how much to contribute, consider how much you’ve spent on medical expenses this year—and any changes you anticipate for 2019.

7. Seriously consider a high-deductible health plan combined with a health savings account (HSA), especially if there’s an employer contribution. Yes, that high deductible can be scary. But again, consider your health status and the risks you face. The tax advantages of an HSA—coupled with the ability to invest the balance and take it with you, even into retirement—are powerful incentives.

8. Before you jump to a new plan that looks financially attractive, verify that the doctors and health care facilities you want to use are participating in the plan. That means checking with both the plan and your health care providers. And be specific. It isn’t sufficient to ask, “Do you take Blue Cross?” There are many plans offered by each insurer, and a doctor may participate in some and not others. Do not rely on the last list of providers you saw online.

I remember an employee who jumped at a new plan based solely on an attractive premium. When the new coverage went into effect, he had to explain to his wife that she had to change gynecologist and the kids’ pediatrician. He pleaded with me for an enrollment do-over.

9. If you are covered by Medicare and are considering a Medicare Advantage plan—which can be attractive—check out its network of doctors, its prescription drug formulary and what sort of coverage it offers for out-of-network providers, if any.

10. Above all, don’t ignore open enrollment. It may take a few extra minutes to read the communications you receive, but it’s to your benefit. Be warned: It’s rare these days that nothing changes from one year to the next.

Richard Quinn blogs at Before retiring in 2010, Dick was a compensation and benefits executive. His previous articles include Reality CheckUnder Construction and Mini-Golf, Anyone. Follow Dick on Twitter @QuinnsComments.

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