Jill on Money
Jill Schlesinger
It’s that time of year, when you are confronted by open enrollment packages for healthcare coverage from your employer and in some cases, from the government.
Rising coverage costs, along with near four-decade highs in inflation, means that this is the year you need to pay attention and spend the time to scour your options.
Employer-based coverage
According to a recent survey from Voya Financial, 70% of employed individuals plan “to spend more time reviewing their benefit selections during open enrollment to help make the most of their benefit dollars because of inflation.”
That’s good news because the combination of the pandemic and a tight labor market has prompted many employers to expand the menu of healthcare choices, which can be a blessing and a curse.
Before you throw in the towel and revert to whatever you chose last year, set aside time to review your current plan and determine whether there have been any changes.
For example, are your doctors and prescriptions still covered? If not, move on and start comparing replacement plans. You will need to determine what they cover and how much they cost, including co-pays and deductibles. The various plan types include:
— Health Maintenance Organization (HMO), which limits coverage to care from doctors who work for or contract with the HMO. It generally won’t cover out-of-network care except in an emergency. An HMO may require you to live or work in its service area to be eligible for coverage.
— Preferred Provider Organization (PPO), which contracts with medical providers, like hospitals and doctors, to create a network of participating providers. You pay less if you use providers that belong to the plan’s network. You can use doctors, hospitals, and providers outside of the network for an additional cost.
— Point of Service (POS) Plan, which usually costs less if you use doctors, hospitals, and other health care providers that belong to the plan’s network. POS plans require a referral from your primary care doctor to see a specialist.
— Exclusive Provider Organization (EPO) Plan, a managed care plan where services are covered only if you go to doctors, specialists, or hospitals in the plan’s network (except in an emergency).
— High Deductible Health Plan (HDHP), which has lower premiums in exchange for higher annual deductibles. These plans are paired with tax-advantaged Health Savings Accounts (HSAs), which can be an efficient was to save for current, as well as future health care expenses. For many, an HSA can serve as another retirement savings vehicle, because money in it can be used to offset costs of medical care after retirement.
Affordable Care Act (ACA)
For those who have exited the corporate world and are self-employed, are experiencing a gap in coverage between jobs, or are waiting to turn age 65, the open enrollment period for the ACA will begin November 1 and run through January 15, 2023.
The main difference among the four plan types is each has a different method for sharing costs. The government notes that “plan categories have nothing to do with quality of care.” Costs vary depending on the plan you choose and your state of residence.
Medicare
If you are over 65, Medicare open enrollment has started – and it concludes December 7. During this period, you can join, switch, or drop a plan.
Because insurance companies often change what they cover from year to year, it behooves enrollees to update coverage.
Using the same analysis mentioned above, go to Medicare.gov to compare plans and select what’s right for you. If you need financial assistance to help pay for coverage, consider Medicare Savings programs, which are administered through state Medicaid agencies.
(Jill Schlesinger, CFP, is a CBS News business analyst. A former options trader and CIO of an investment advisory firm, she welcomes comments and questions at [email protected]. Check her website at www.jillonmoney.com)
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