What to Watch for During Open Enrollment

Doctor visit

What to
Watch for During Open Enrollment

It only comes around once a year. Better make the most of it.

How's your health insurance? If you're not sure or not happy with it, now's the time to change it. Open enrollment season, which covers both employer-based and federal health insurance, has just kicked off. And to say that healthcare is a topic that generally frightens most Americans is an understatement. And yet, nearly three-quarters of working adults spend only 45 minutes or less evaluating their employee benefits during open enrollment, according to research from the employee benefits firm Unum.

There's a reason why you should take this seriously: individual plans change, so do your personal needs and you won't be able to change this for another year. You should also be aware that despite a few exceptions, insurance costs are rising. The average annual deductible is now $1,655, which is double the average just a decade ago, according to the 2019 benchmark KFF Employer Health Benefits Survey. Monthly premiums rose 5% while workers' wages rose 3.4% and inflation rose 2% over the same period. That's why it's important to know the lingo and what kind of plan suits your lifestyle, along with both your financial and health needs. Herewith, five things to keep in mind when choosing your next insurance plan.

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Your Guide to
Open Enrollment

Know When and Where

to Enroll

Depending on where you live, you can either use the federal exchanges on HealthCare.gov or your state's marketplace to shop for insurance. Twelve states and the District of Columbia run their own exchanges. The federal exchange open enrollment runs through November and ends December 15, but you may have more time if you live in a state that runs its own marketplace.

Don't Just Stay With
Your Current Plan

It's tempting to skip the whole process, especially if you're happy with your current plan. In that case you'll just get rolled into the same plan (or a similar one) if you do nothing during open enrollment. But terms can change and physician groups have contracts with private insurers that get renegotiated periodically. So you'll want to go over how your plan may change and compare it to others. You may find one that suits you better or saves you some money.

High Deductibles
vs. High Premiums

This is the great debate when it comes to choosing plans—especially when you're young and relatively healthy, right? In the end, it comes down to your risk tolerance. Think of it this way: High premiums = low risk (and vice versa).

Pay more each month

Pay more each month

A plan with a high monthly premium (what your plan costs) and a low deductible (how much you pay out of pocket before insurance kicks in) can be attractive because once you've hit that deductible, the rest of your costs are covered. If you require care somewhat often (for example, you have asthma or a skin condition and regularly see doctors and pick up prescriptions for it), a low-deductible plan might be better for you. But those high premiums won't really be worth it if you don't see the doctor often enough to meet your deductible.

Pay less each month

Pay less each month

There are some scenarios where a high deductible plan, which come with much lower monthly premiums, might be worth it. If you're otherwise healthy, and don't foresee a need for much care, these plans protect you in case of a serious, unexpected medical event (like an emergency room visit). If you can afford to cover your deductible up front or within 30 days of getting the bill (and don't plan to visit the doctor much otherwise), these plans could be good for you.

Consider
an HSA

Especially if you opt for a high-deductible plan (or you work at one of the few reaming workplaces that offers only a high-deductible option), you'd be wise to open an Health Savings Account, often referred to as simply an HSA. These are often available through your insurance provider. Most plans with a deductible of at least $1,350 for an individual or $2,700 for a family offer the option of an HSA.

Unlike monthly premium payments, the contributions you make into your HSA are yours to keep. They work pretty much like any other savings account: the money is in your account, and can be withdrawn tax-free for any qualifying healthcare service—anything from deductibles and copays to testing and prescriptions. You can contribute $3,500 per person and $7,000 per family a year. What's more, you don't have to count the money as income and you take it with you when you leave your employer.

Check for Money-Saving Extras

After you've selected your plan, comb through it carefully to find potential perks. For instance, some employers provide a financial incentive or a discount on your premiums if you complete a health assessment or participate in certain screenings. There has also been a dramatic increase in the number of employers providing a telemedicine benefit, although employees have been a bit slow to sign up. Telemedicine services allow you to access a doctor or other health-care provider by phone or video usually with 24-hour access. In some non-emergency cases it can be the easiest, cheapest and fastest way to access care for ailments such as colds, flu, sinus infection or dermatology issues.

FYI

$3,500,000,000

$3,500,000,000

The amount spent annually on health care in the United States, which continued to climb in the last year counted. That works out to be an average of $10,739 per person.

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