4 steps to picking the right plan during Open Enrollment
Open Enrollment is here!
Open enrollment kicks off this week for individual health insurance. It is also the time of year that many employers renew their group plans. As a result, many Nashvillians will have an array of options from which to choose. So many options, in fact, that it can be overwhelming. But, the following are four steps to maximizing the likelihood that you choose correctly for yourself and your family.
Step 1: Identify options
Create a spreadsheet that has the following rows: premium cost; deductible; coinsurance; out-of-pocket maximum; drug copays; and office visit copays.
Next, go to healthcare.gov and run quotes for each family member. Add the lowest premium plan, the highest premium plan, and then two plans from the “Silver” category to your spreadsheet for each family member. You’ll want one of the “Silver” options to be HSA-eligible.
Finally, if you’re eligible for an employer plan, you’ll want to put each option your employer provides in a column of that spreadsheet. If your spouse’s employer also provides a health benefit, you’ll want to put all of those options in the spreadsheet as well. When you do this, make a separate column for each coverage tier of each option that your employer offers. Why? This will make it much easier later to see the impact that electing a different coverage tier has on both the monthly premium your employer charges and the benefits of the plan. For example, “employee only” coverage might cost $12/month and have a $2,500 deductible but “employee + family” coverage might cost $750/month and have a $5,000 deductible.
At the end of this step, most families of four where both parents work will have four or five employer options with four coverage tiers each as well as five individual options per family member. That sounds like a lot, and it is. If you know you can “kick out” some of the options, then doing so can save you some time.
Step 2: Medical need scenarios
Once you’ve identified the options you have available, write down your family’s expected medical needs. Then, write down a “worst case” scenario.
For example, if you have a monthly prescription, write that down. If you expect to take the kids to the doctor four times each, write down those expected office visits. For the “worst case,” assume an accident or diagnosis that requires extended hospital-based care at a cost of more than $30,000.
Step 3: Calculate costs
This part can get tricky. For plans that do not have a copay, you would pay the insurance company's network-discounted rate for things like office visits and drugs. One good resource to use to identify how much that would be is Nashville-based Healthcare Blue Book, which has a free consumer tool on its website that allows you to find fair pricing in health care.
As you’re crunching the numbers, keep in mind that it may make sense to “mix and match” the different coverage options you identified in Step 1. More and more employers, for example, contribute a lot toward the “employee only” cost of coverage, but do not contribute toward the cost of the “employee + family” tier. As a result, it makes sense for a lot of families to get individual coverage for some family members even if a group plan is available.
Step 4: Check the network
The first three steps of this process are largely focused on helping you identify the right approach for your needs. For example, the analysis may help you realize that it is best for you to sign up for “employee only” coverage with your employer, but get the “lowest premium” individual policy you had identified on your spreadsheet for your spouse and children.
Once you have identified the right approach for your needs, however, you’ll want to check the medical provider networks. You might find, for example, that the “lowest premium” individual plan is missing doctors or hospitals who you want in-network access to. If you do, then look for other plans that are close to that “lowest premium” plan but that offer a network more aligned with your needs.
This is just an overview of how to approach finding the right plan. It doesn’t take into account the availability of subsidies, short-term medical plans for coverage while waiting for an individual plan to kick in, or government programs like Medicare or Medicaid, which are important options for more and more people. That said, following these steps is a good start to possibly saving thousands on healthcare.
This column originally appeared in the November 3rd edition of The Tennessean.
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