Choosing the right health insurance is a very important decision with significantly broad health and financial implications. You will need to sign up once a year for health insurance—during open enrollment. With so many options, and such a complex process, it’s sometimes hard to know the best route. This guide will help walk you through understanding open enrollment, assessing your options, and making the best choice for your situation.
What does open enrollment mean for health insurance? Open enrollment is a time period for signing up for a new health plan or making changes to the one you have. For most people, it is the only time during the year when they can do this. When you can enroll or make changes will depend on the respondent:
Employer-Sponsored Plans: Open enrollment typically happens once a year, usually in the fall.
Marketplace Plans: If you buy your insurance through the ACA Marketplace, the enrollment period is usually November 1 to December 15, but some states may be keeping it open a little longer.
Medicare: Open enrollment for Medicare is from October 15 to December 7.
Outside this window you can change plans only if you experience a SEP because of meaningful changes in your life, like getting married, having a baby, or losing other health coverage.
Prepping for When Open Enrollment Arrives
Preparation is essential to making good decisions during open enrollment. Some of the things you should do before the period starts are:
1. Review Your Current Coverage
Start the budget review process with an assessment of your current health insurance. Ask yourself the following questions:
How much did you actually SPEND OUT-PERSONALLY? Evaluate what was paid in premium, co-pays, deductibles and other medical expenses for the last year. Were they higher or lower than what you anticipated?
Did your plan meet your needs? Consider whether there were any gaps in your coverage. Were there services that were not covered or costs that were too high? Did you like your doctors and hospitals?
What’s changing next year? See if the premiums, deductibles, co-pays or provider networks for your current plan are changing next year.
2. Health Care Needs
Consider how your health care needs may change during the upcoming year. Are you expecting to have a significant medical procedure, have a baby, or require more prescription drugs? These expected health care needs must be factored into your choice of plan.
3. Understand some of the necessary insurance terms:
Some of the terminologies used in health insurance are quite confusing. Here are some of the terminologies which would help you make an informed decision. For instance:
Premium: the amount you will be spending on a monthly basis to purchase insurance.
Deductible: The amount you pay first, before the insurance company begins to pay its share. Copayment (Copay): A set cost you pay for specific services. For example, this could be a fixed amount for every doctor visit. Coinsurance: The percentage of the cost that you are expected to pay after you’ve met your deductible. Plans pay the remaining percentage of the cost. Out-of-Pocket Maximum: The most you are going to have to pay during a policy period, before an insurance company covers all of your costs. Comparing Your Options
You will have to compare the available plans once open enrollment begins. The following is how you can effectively evaluate your options:
1. Compare Plan Types
Each health insurance plan type has different types of rules and provider network setups.
HMO — You have to get your care from a network of doctors and hospitals with an HMO. Most of the time, you also need to have a referral from your primary care doctor to see any type of specialist. In return, HMOs usually have lower premiums and out-of-pocket costs. The model, however, entails less flexibility.
Preferred Provider Organization (PPO): PPOs offer flexibility in choosing your doctors and hospitals. You can see any doctor, but you will be better off using an in-network provider for lesser charges. PPOs generally have higher premiums and out-of-pocket costs to cover those extra expenses.
Exclusive Provider Organization (EPO): Like the HMO, you do not need a referral to visit a specialist, but, of course, you have to stick with the network for the coverage.
Point of Service (POS): This is the hybrid of HMO and PPO plans. While POS plans require a referral to see specialists, they also allow you to see out-of-network providers at an increased cost.
Pick which kind of plan you want based both on how flexible you would like to be with your choice of providers and based on what it costs and how easy it is.
2. Compare Total Costs
As much as premiums matter, compare them not in isolation. To each plan, add the total cost for:
Deductibles: Higher deductibles will reduce your premiums, but you will pay out of your pocket before your insurance starts to pay.
Copayments and Coinsurance: These can really add up, especially if you go to your doc a lot or have prescriptions you take on a regular basis.
Out-of-Pocket Maximums: Choose a plan with an out-of-pocket maximum you could afford to pay if something major happened.
Before making any comparison, remember to make sure your preferred doctors, hospitals, and specialists are enlisted in the network of the plans. If you have health care providers with whom you have an existing relationship, it is important that you make sure they are covered through your new plan.
4. Compare Prescription Drug Coverage
Prescription drug coverage varies considerably among plans. So if you take medications on an ongoing basis, check the plan’s formulary to be sure your drugs are covered. Look at the copays or coinsurance for your medications and any requirements for prior authorization
How to Put Your Best Foot Forward
Now that you’ve compared, here’s how to take action:
Use Web Tools
Most of these health insurance marketplaces and employers have online tools for plan comparisons. From your details entered, they can generate estimates of total costs, including premiums, copays, and deductibles based on your presumed medical needs. Side-by-side comparison of different plans will further help in making effective decisions.
2. Professional Guidance
If any of those options sound confusing to you, consider consulting a licensed insurance broker or a certified enrollment counselor who can help you understand the labyrinthine dimensions of the world of health insurance and let you know if you are really making the best choice.
3. Do not miss the deadline.
Remember, open enrollment is a time-limited opportunity. Therefore, do not miss the deadline, or you could be stuck with last year’s decisions, or possibly go without any coverage at all.
Conclusion
Health insurance during open enrollment year may present special challenges. Preparation with careful attention, looking at your options, may help you make the right choice for your health and for your wallet. When reviewing your current coverage with your future needs in mind, try available plans on for size including the prices, coverage, and the provider network offered. With an opportunity to think things over, you will be in a much better position to select a plan that will provide protection and peace of mind in the coming year.