The fourth quarter of the year is the busiest time of the year. There is Thanksgiving, Christmas, Hanukkah, Halloween, and so many other celebrations that occur during this quarter. But none of them is more important than your health and the health of your family. That is why Open Enrollment for your health insurance should be your top priority.
Open enrollment is your once-a-year chance to evaluate your current healthcare coverage for any changes or modifications you may need to make. A lot can happen over a year, so what may have worked this year may not be the best fit for next year. Whether you are evaluating employer-based plans, Marketplace plans, or Medicare, here are the top seven things to consider when making your decision.
When making this decision, consider more than the premium. Some costs are not monetary such as continuing care with your healthcare provider, the medications you take and how much freedom and flexibility you want. Below is a list of 7 things to consider during open enrollment season.
1. TOTAL COST OF COVERAGE (NOT JUST PREMIUMS) How
It’s easy to keep your focus on the monthly premiums, but you also need to consider deductibles, coinsurance, and out-of-pocket maximums. If these terms seem unfamiliar, click here to read our first post regarding healthcare. It goes over all the terms you will see in this article. FYI: If you are considering a plan from the Marketplace, it has a wonderful tool that helps you calculate your total cost for a plan. You can find that tool here. The out-of-pocket maximum is extremely important. It is a safety net that protects you from how much you will be expected to pay for your healthcare. It does not factor your premium into that amount. Side note: Deductibles reset to zero on January 1 for most plans. If you met your deductible this year, when factoring your cost for next year, you will need to consider the 2026 deductible when determining the total cost of coverage. * The new budget has not been approved by Congress, so the premiums may change for the Marketplace health plans.
2. Provider Networks: PPO vs HMO vs POS…which plan is right for you?
- · HMO plans have the least freedom and flexibility. These plans have contracted healthcare facilities and providers that must be seen in order for your service to be covered by your insurance plan. You choose a primary care physician, and they obtain a referral from your insurance company before you can see another provider. The federal government’s No Surprises Act protects you from unexpected bills due to emergency care given at an out-of-network facility and/or provider. You can read all the details here. In most cases, unless it is an emergency, HMO plans typically do not cover out-of-network services. If you knowingly see a provider that is out of network, you will be financially responsible for your care.
- · PPO plans offer a bit more freedom. They have contracted healthcare providers and facilities that need to be seen in order for your insurance to cover your healthcare services. These plans do offer a bit more freedom because they do not require a referral to a network provider. These plans may have a separate tier of coverage if you go out of network. For example, if you have a $1000 deductible when you see in-network providers. However, your deductible is $2000 if you choose to see an out-of-network provider.
- · POS plans (and no, it doesn’t mean what you think it means) have even more freedom and flexibility. These plans offer a hybrid of HMO/PPO. The member must choose a PCP, but they may not need a referral if they want to see an in-network specialist. At the time of service, you choose which type of insurance you want to utilize. Your plan will still have contracts with certain healthcare providers, and you may have to get a referral, but you have the choice to go out of network for some services or without a referral. You will usually have a higher deductible and/or coinsurance for the out-of-network providers. While the PPO plan may have a separate tier of coverage for out-of-network providers, POS will definitely have one. ‘
3. Are your current doctors in-network?
Do you have an ongoing healthcare condition, and for continuity of care, you would prefer to stay with your current provider? For Marketplace plans, you can look up providers and see if they are on the plans you are considering. If you are on Medicare, contact your providers and ask them if they take traditional Medicare or if they are members of any Medicare Advantage plans. If you are choosing an employer-based plan, your HR department may have access to a list of in-network providers.
4. Prescription Drug Coverage, aka formularies - Are my medications covered?
Are you on a maintenance or long-term medication? Formularies are a list of medications covered by an insurance company. If you are currently taking a medication that you prefer to continue taking in the new year, you want to check their formularies. Does the formulary have a tiered list? Is this medication on the list and is it on a higher tier? (Higher tiered medications typically cost more and require an authorization from the insurance company). Even if you are considering staying on your current plan, check their formulary. They may have made some changes for the next year.
5. Expected Healthcare appointments - What if I already have a procedure scheduled for next year?
Do you have a procedure that you know you will do next year? Are you pregnant this year but are not due until next year? Check the plans and see what level of benefits you have for those appointments or procedures, and the expected copay or coinsurance that you will need for that appointment. Side note: If you get pregnant one year and deliver in the new year, your deductible will more than likely start over on the 1st of January, even if you stay on the same plan for both years.
6. DENTAL, VISION AND SUPPLEMENTAL BENEFITS- How important is dental and vision coverage to me?
Check your employer plan and/or marketplace plan for dental and vision coverage. These are separate from your health insurance. Some Medicare Advantage plans offer dental, vision, and hearing coverage, whereas Traditional Medicare does not cover them.
7. Availability of HSAs, FSAs, and other Tax Advantage Accounts
Do you have access to an HSA, HRA or FSA? If you have one of these accounts, it may significantly impact your overall healthcare costs. If you are not familiar with this type of account, here is a brief description of each one.
HSA accounts are member-driven accounts. In other words, you own this account. It allows you or anyone to contribute to the account. In order to qualify for this type of account, you must have a high deductible health insurance plan either through the marketplace or with your employer. If you don’t use it all in one year, the funds can roll over to the next year. If you change employers, you can take it with you. You are not taxed on these contributions, nor are you taxed on any growth your account may have, which is tax-free for payment on medical bills.
FSA accounts are similar; however, they are employer-driven accounts. In other words, your employer must offer this type of account. Typically, you fund this account; however, some employers may contribute to it. There are no restrictions on the type of healthcare coverage you have in order to have this type of account. The funds you add to this account are tax-free, but there is a caveat. You must use the money you put into the account for healthcare-related costs. In most cases, if you don’t use it the year you contributed money, you lose it. These accounts are not allowed to grow beyond the funds contributed.
HRA accounts are employer-driven accounts. In other words, not only must your employer offer this type of account, but they are the only ones that can contribute to it. If you leave your employer, the money stays with your employer. You are not taxed on the funds contributed by your employer. These funds are not available if you leave your place of employment.
While we worry about all the parties we will attend, holidays we will celebrate, school performances we will visit, we cannot forget open enrollment season. You have the power to make changes for the coming year regarding your healthcare coverage. The cheapest premium may cost you more in the long run. Do the work now so you aren’t surprised later.
Medigap: A short note about Medigap
This is supplemental insurance to Medicare to help offset some of the costs. When you initially enroll in Medicare, the member only has 6 months to choose a Medigap plan. It is not recurring. It is a once a lifetime choice. See link for more information and exceptions.
Helpful links
How to choose a Market Place Plan
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