We get it. Open enrollment is a chore. At best, reading through plan benefits is about as exciting as watching paint dry. At worst, it’s like watching a foreign-language film with no subtitles and a test at the end.
But to get the most out of your health care benefit, you need to invest a little time into comparing plans. Here’s why.
If you’ve got insurance now and the same plan is offered next year, it’s easy to think you can just skip it all. But alas, it’s not that easy. Plans change, both in terms of what is covered and what it costs. And your needs change, as you get older and possibly add new family members. So you need to look each year at what is covered and what it costs.
The first step is to think about how you use your health care. Are you young and relatively healthy? Do you have a chronic condition and ongoing medical needs? What prescriptions do you take now and how are they covered?
If you’re single, you only need to think about your own health care needs. But if you’re married or have kids, consider the coverage options for your other family members. Got a DIY spouse who seems to find ways to get hurt while changing a lightbulb? Consider what the urgent care and emergency room coverage looks like.
You’ll also want to look at who your health care providers are and whether they are in-network for the plan you are considering. Even if your doctor used to take your insurance, it’s possible that they will leave that insurance network for various reasons. For some plans, an out-of-network doctor or hospital will cost you more. For others, you can’t use an out-of-network doctor or hospital at all except in an emergency.
And then there’s the cost. You might find some plans are cheaper but have very high deductibles — the total amount you have to pay out of your own pocket before your coverage kicks in. But before you dismiss that option, see if the high deductible plan qualifies you to invest in a Health Savings Account (HSA), either through your company or on your own.
Especially if you are relatively healthy, you can save money with a high deductible plan and an HSA. You can take what you save in premiums and put it into an HSA to cover your deductible for the year, as well as any additional contributions you want to make, up to the current limits. If it turns out you and your family stay healthy and you don’t pay much toward your deductible, you’ve still got that money in the HSA. It rolls forward and stays yours forever. (Unlike an FSA or Flexible Spending Account, which you must use within the year or lose it.) Best of all, it’s tax-free and any growth in the funds is also tax-free.
After ensuring the plans you are considering cover the providers you want to see and the care you think you’ll need, it’s time to do the math. Gather your health care receipts for the past year, look at your anticipated needs next year and compare premium costs, deductibles and coverage rates.
If you find yourself perplexed, know that you aren’t alone. But if you set aside some time to really look at your options, that confusion will pass and you’ll find a plan that you, and your budget, can live with.