We’ve gathered some tips to help you know what to look for during this year’s open enrollment period.
Choosing health insurance plans can feel overwhelming and confusing to many Americans. Do you choose an HSA or a PPO? What about the Insurance Marketplace? How much are you going to pay in premiums or out of pocket costs?
Wells Insurance has gathered some tips together to help you nail down what to look for during this year’s ACA open enrollment period.
Gather your insurance bills and payments as well as your bank records from the past year and tally up your total insurance costs for 2015. Get a feel for what you spent on your current health insurance, and what you spent on out of pocket costs. With this information you can more easily determine if you should be in a high deductible health insurance plan with a low out of pocket maximum, or if you should be in a low deductible health insurance plan with a higher out of pocket maximum.
Everything basically feeds into your total annual out of pocket costs – office co-pays, prescription co-pays, and your other payment responsibilities outside of your premium. So, when you hit that maximum total, your insurance then kicks in and covers the rest. The question is, what makes the most sense for your situation regarding your out of pocket costs? Here’s a few scenarios that you can start with:
Example #1 – If your health situation requires you to go to the doctor frequently, or if you take a lot of medications that require doctor’s office visits, or if the medications that you do take are name brand and cost you a lot in out of pocket costs, then each of those expenses pour into the bucket of your out of pocket responsibilities. If you are paying a lot in these expenses, you likely want a plan that will allow you to fill up that bucket as quickly as possible, so that once the bucket is full, your insurance would cover the rest of your expenses for the rest of the plan year. In this instance, you would want to look for a plan with a lower out of pocket maximum (a smaller bucket that will fill faster).
Example #2 – Using this same bucket analogy, if you are a healthier person, and you rarely go to the doctor except for your annual exams (which are 100% covered anyway), then most likely no matter what your out of pocket maximum is, you likely won’t fill that bucket up with out of pocket costs. So in this instance, it may make more sense for you to have a higher out of pocket max, which will mean a lower premium rate.
There is usually a relationship between a higher out of pocket max and a lower premium, and a lower out of pocket maximum and a higher premium. So in our first example on the left, that person who goes to the doctor more will pay more each month in premium, but will fill up their bucket of out of pocket costs faster and get more out of their insurance. The second person since they would likely not fill up a bucket, would get the most benefit by paying less each month in premium costs with a higher out of pocket plan.
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I like that you mentioned to make sure you choose a health insurance plan that will work with your current doctors. That way, you can remain where you feel comfortable, and you can be sure you won’t be charged extra for seeing him. I am trying to choose a new health insurance plan for my family, and I want to choose the best possible option. I will make sure that I keep this in mind as I search, thanks.