Making a Smart Health Insurance Decision

smart-choice
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The health insurance market is confusing! Open enrollment for both Medicare and the Health Insurance Marketplace starts soon and with so many ads on television, many consumers who are not covered by an employer’s health insurance plan are confused about which process to use and which plan to pick.

The Medicare insurance program is a federal program open to people 65 and older or for those under 65 with disabilities. Medicare provides a certain level of insurance coverage and many people choose to buy additional supplemental (Medigap) plan and prescription drug plan that increase the breadth of coverage. Open enrollment is from October 15 to December 7 and this is when all people with these supplemental plans can change their coverage for the following year to better meet their needs. It is important to review your current plans each year because Medicare supplemental health and drug plans often change cost, coverage, and what providers and pharmacies are in their networks.

The Health Insurance Marketplace (in Delaware, this can be found at www.choosehealthde.org) was established through the Affordable Care Act and since 2014, individuals under age 65 have had this venue to choose health insurance plans. Open enrollment runs from November 1 to January 31, 2017. These dates are for both on and off the Health Insurance Marketplace plans – meaning you can purchase plans through the Marketplace and potentially receive tax credits and premium subsides, or you can purchase your plan independently from a broker or health insurance provider. In Delaware, the deadline to enroll in a plan with a January 1, 2017 start date will be December 15, 2016.

health-insurance-policyNo matter what your age or ability, making a decision about which plan to enroll in does take a little time, so start now to begin this process. Most people make a decision based on the premium and whether or not their doctor is in the network. While these two criterion are an important place to start, there are a few other things to consider. Here are a few additional steps to take in order to make an effective choice:

  • Who you have to cover and what are the health care needs. Make a list of who you need to cover in your family and from there, identify what their health care needs are. For example, what kind of doctors are they seeing and how often; what types of services are they using or might they use (i.e. mental health, hospitalization, emergency room or urgent care, maternity, surgical, specialists, medical equipment, prescription drugs, dental care etc.). Creating this list will also help you estimate some additional out of pocket costs (see 3 below). Also consider if you travel and if you are likely to use out-of-network providers.
  • Once you know the types of health care services you need and how often you may use them, you can begin to narrow down the type of plan you may need. If you don’t travel a lot and you would like to have a primary care doctor be the point person for all your health care needs, you might consider an HMO plan. For these plans, unless it is an emergency situation, there is only an “in-network” option; so you’ll also want to be sure your favorite doctors or services are within the network. An Exclusive Provider Organization (EPO) is similar to a HMO plan because there are only in-network options. However, with these plans, you have the option to see specialists without getting a referral from your primary care doctor. For the Preferred Provider Organization (PPO) plans, there are in-network and out-of-network options- though you will pay more if you use an out-of-network provider. For this plan, you also do not need to see your primary care doctor for a referral prior to seeing a specialist. For those consumers who have complicated health care needs, having a PPO will give you the ability to seek treatment out-of-network.
  • Determine the monthly premium but also what the other out-of-pocket costs might be. Ways that health insurance companies share the costs with consumers is through the deductible, copayments and coinsurance amounts. When the deductible is high, you as the consumer are taking on more of the costs, because for most plans, you will be paying the full amount of the deductible before the health insurance company pays for anything- unless it is for certain preventative care services (like your annual checkup or immunizations). In step 1, you counted up the number of times you and your family visited the doctor or used services. Use these numbers to estimate your usage for next year and do a little math using the deductible and copayment amounts provided in the plans you are considering. For example, if you and your family went to the doctor 10 times last year and the copayment amount is $25 per visit, then you can guess that next year you may have $250 worth of copayments on top of the deductible and premiums.

Once you know these figures, you can match it with your savings and your monthly budget. For example, one plan may have a $250 monthly premium ($3000/year), a $6000 deductible and $250 ($25 x10 visits) worth of copayments. That would be a total of $9250 per year if the worst happens and you need to pay out the full deductible amount.

Another plan may have a $400 a month premium ($4800/year), a $1000 deductible and $300 worth of copayments ($30 x 10 visits) totaling $6100 per year.

You see, premium isn’t everything. You need to crunch some numbers. Finding $400 per month for the premium may feel really uncomfortable on a monthly basis, but in the long run if the worst happens, your bottom line will be better off.

  • Learn more! If you want to learn more about making a Smart Choice about Health Insurance, you can tune in to our upcoming webinar: You and Health Insurance Making a Smart Choice. It is free and will be offered from noon -1:30 pm on both Oct 25 and Oct 26th. You can go to our website to register: http://extension.udel.edu/fcs/insure/ or click here to register.

On our Cooperative Extension website is a My Smart Choice Workbook which provides more information about plans and provides worksheets that will help you work through these steps for your family.  For more information about our health insurance programs, please feel free to contact Maria Pippidis, University of Delaware Cooperative Extension Educator.

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