Open Enrollment Time: What You Need to Know About Your Health Insurance Plan Choices
It's a popular time of year for open enrollment--when companies allow you to pick your insurance plan and other benefits. Andrew Rubin, Vice President for Medical Center Clinical Affairs and Affiliates NYU Langone Medical Center, estimates that 25 percent of people don't even open their benefits book and just go with the default plan. But this year it's more important than ever to analyze your options. Here are a few things to know:
What's different this year?
Most employers have changed their plans this year due to the economy, say Rubin, and you'll have to foot a much larger portion of the bill. Health care costs have soared, and in flush times, employers have absorbed those increases. But when companies are choosing between layoffs or passing health care costs to employees, they often pick the latter (or both).
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What's the difference between an EPO and PPO and HMO?
It's worth nothing that all plans are different and depend on what benefits your employer has packaged together for you, but here's an overview: HMOs are typically the lowest overall cost option because the care is tightly managed and there are no out-of-network benefits, says Rubin. So if you have an HMO, but your doctor's not on the plan, you're stuck footing the entire bill. (Sometimes you will pay a little more out of your paycheck for an HMO than for a PPO because HMOs typically have lower copays, no deductibles or other savings.) An EPO is basically like an HMO, but it is open-referral, meaning you don't have to see your primary care doctor for a referral to, say, a podiatrist or other specialist if you need one. PPOs let you have some out-of-network care, so you can keep seeing any doctor--although it can still be expensive to do so. And some companies also offer high-deductible plans, which typically have very low premiums. If you're generally healthy, and paying a $5,000 or $10,000 deductible won't break you in an emergency, then these types of plans may be an option, say Rubin, "But if you can get into an HMO or PPO, I'd recommend it. High-deductible plans are risky, and you have to be able to stomach that. It's like going to Vegas--some people are comfortable in Vegas, and some aren't."
Shouldn't I just choose the cheapest one?
In a word, no, says Rubin. "Many employees only look at the rate sheets when choosing health insurance--and that's a mistake." You need to look over your last year's medical costs (ideally the last three years) to determine what is really the cheapest option for you. How many times did you go to the doctor? "If you utilize healthcare frequently, it is usually cheaper to select an 'enhanced' plan. Your premiums out of your paycheck are higher, but the out-of-pocket amounts you pay at the doctor are typically lower, so you save in the end," says Rubin. If you're a generally healthy, get-one-checkup-a-year kind of gal, you may want to go for a basic plan with a cheaper premium, and then just pay the extra copays or fees for that one visit. "Just remember, this is insurance, and you are protecting yourself from the risk of something bad happening--there are no guarantees. But this rule of thumb usually works," says Rubin.
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What is coinsurance, anyway?
For some people, this may be a new part of your benefits. "Coinsurance essentially says that you as an individual are responsible for a portion of the bill," says Rubin. Whereas in the past, you may have had to just fork over a copay and the rest of the visit was covered, if you now have a plan with coinsurance, you'll be required to pay for the copay plus a percentage of the rest of the cost. Those costs can really add up--especially if you go out-of-network.
Have more questions?
Check out rubinhealth.com. And remember, although benefit sheets can be intimidating, it's crucial to take the time to dive into the details. "You'll find it's not that complicated," says Rubin. "Just look at the plan with pen and paper, and figure out what you're utilization of services are. It could be the most important hour or two you'll spend all year."
Be honest--have you looked over your benefits this year? Are they more expensive than in the past? Are you happy with your coverage?
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