Making the Most of Open Enrollment
Open enrollment can be overwhelming, as sorting through several options looking for the perfect health plan for your needs can feel like a job in itself. According to a 2018 survey, in fact, 93% of employees choose the same plan year after year to avoid the difficulty of making a selection — even if it’s not a good fit.
But the stakes are higher this year. COVID-19 continues its rampage across the U.S., and if there’s one thing we’ve learned in 2020, it’s that our health is unpredictable. It’s more important than ever to do some deep thinking and take the time to select the right plan for our personal and family health needs.
Here’s how to evaluate your options so make the right choice this open enrollment period.
Plan for the Year Ahead
As you plan for open enrollment, consider any potential medical expenses you may accrue in the coming year. “Adjust your insurance to what your needs are,” suggests Erika Safran, president at Safran Wealth Advisors. High-deductible plans are fine for well visits, for example, but if you have planned medical expenses coming up (like elective surgeries), then you’ll want to get a low-deductible plan, Safran says.
COVID-19 care may or may not be covered by your insurance. If you’re in a high-risk group or occupation, get the minimum you need to cover potential risks, suggests Michael Whitman, managing partner at Millennium Planning Group. A single COVID-19 event could cost $4,000 to $5,000 or more, he says.
Here’s how insurance carriers are currently responding to COVID-19. There could be provisions in an upcoming stimulus package covering the cost of COVID-19 care, although no agreement has been reached in Congress. Check back with your HR representative for updates on this evolving situation.
Consult the Experts
You may not understand the details of each option, and that’s OK. Health insurance is complicated, and it’s better to ask questions than to risk making the wrong choice. You can ask your HR or benefits representative to explain your options, Whitman says. Check out your insurance carrier’s website, too. Carriers often have tools letting you compare plan options so you can make an informed decision.
Look at the deductible, copay and maximum out-of-pocket amount for each plan. Plans with lower out-of-pocket care costs tend to have higher monthly premiums and vice versa. Out-of-network costs can run high, so check to see whether your doctors (especially specialists) are in your plan’s network. “Review the doctors that are available for the plan you select,” Safran says. “Make sure it has doctors you visit.”
Find the Plan That Fits You and Your Family
Try not to make a decision based on the cheapest plan. Since lower monthly premiums usually mean that your deductible and other out-of-pocket costs are higher, an unexpected medical scenario (like COVID-19 or a kidney stone) could run up costs and leave you responsible for a much higher bill. Consider your specific current and potential needs and all possible risks to your health — and each covered family member — before making a selection.
Explore nontraditional health care options, too. Examine Health Savings Account structures, for example. HSAs allow you to save money directly from your paycheck on a pretax basis to cover future medical expenses. Some employers will match your HSA contributions, Whitman says, much like a 401(k). If you know you’ll need a knee replacement sometime in the next five years, an HSA allows you to begin saving for the out-of-pocket costs now.
The average annual deductible in 2020 runs $4,364 for an individual and $8,439 for a family. Choosing a high-deductible plan could cost this much — or more — out of pocket before your plan’s coverage kicks in. Choosing the right plan to cover potential health risks could save you thousands of dollars this coming year alone, so be sure to make the right decision this open enrollment season.