Today's post is a guest post on how to get the most out of open enrollment. It comes to us from Deanna of Ms. Fiology.
You may remember Deanna. She participated in my interview series several months ago where she talked about recovering from addiction. She also interviewed my wife, Cathy and me on her blog.where we talked about our experience as parents of an addicted son.
In her day job, Deanna works in the healthcare field. Her experience and expertise in the area are why I invited her to write this post. With open enrollment upon us, I wanted to tap into that expertise to offer help for anyone in the midst of it.
With that brief background, let me re-introduce you to Deanna as she offers a roadmap to navigate open enrollment.
How to Get the Most Out of Open Enrollment
It’s open enrollment for health insurance for a lot of people currently. It is open enrollment for:
- The individual marketplace
Additionally, many employer-sponsored plans renew January 1st. I will touch on some things to consider when making plan selections, but firstly, I’m writing about a topic today which we can all benefit from. That topic is healthcare consumerism.
Being a Mindful Consumer
I’ve written on mindful spending before because it’s important. For many reasons most people don’t think about healthcare, in the same way, we think about everything else. This is not your fault. Most healthcare costs are not transparent.
Furthermore, providers are often far removed from the cost of things. Go ahead and ask your doctor how much that surgery will cost. I bet he/she will tell you to check with your insurance.
However, I’m going to challenge you to dig deeper. You don’t just buy the first car you see, do you? And you don’t just accept the sticker price, right? No, you probably shop around, inspect the vehicles, and then negotiate the cost.
I’m here to say the same can be done with your health care consumption habits.
Let me first say that the greatest thing health insurance does is cover the catastrophic risk. When the rubber hits the road, that’s why we have it. Moreover, the United States has some phenomenal hospitals to choose from when dealing with serious medical conditions.
However, for many of our healthcare consumption habits, we can shop smarter.
You are going to pay for it one way or another
I don’t care how you get your health insurance; you are paying for it. Health insurance comes with a premium, and if it’s a medically underwritten plan, the premiums increase each year by things such as:
- Loss ratio
- Predictive risk modeling
- The market
Sure, some of you are on a community rated plan. Community-rated plan’s premiums increase based on the market as well. They may not increase based on the medical risk of the insured, but these plans are expensive!!!
Think about it, if you go to a mechanic and say, “please give me a quote to fix my car and oh, BTW, you cannot look under the hood,” what do you think they’ll quote you? They’ll quote you high because they don’t know what kind of risk they are taking. The same thing is true with insurance.
Anyway, check out this infographic to get an idea of how you are paying for your healthcare:
How do you shop for your healthcare?
Most insurance companies have a cost comparison tool that you have access to by being a consumer of their insurance. I recommend you either call your insurance company or check with your human resource department to see if this is available.
The insurance companies which I know for certain have such a tool are:
- Anthem (known as Blue Cross and Blue Shield in some states)
- Medical Mutual of Ohio
The first step is to create your online portal with your insurance carrier. It is slightly different for all carriers but, basically, you follow these steps:
- Go to the carrier’s main website
- Enter some identifying information (i.e., ID number and date of birth)
- Create a username & a password
The comparison tool will most likely be named something like “estimate or compare your cost.” Once you locate the tool, you’ll pick the episode of care you are shopping and enter your zip code. The tool will display options within a certain radius of you and their average costs.
Examples from shopping
I logged into my Medical Mutual account and shopped for an X-ray of the chest.
The first screen gives me the average cost as well as the varying range of costs.
Then I had two pages of results. For our purposes, I'll only show several screenshots:
Interesting, huh? The cost of the same X-ray can vary widely from one facility to the next. I’ve generally found that free-standing imaging centers have some of the lowest costs.
MRI’s have an even greater range of costs:
As I understand it, your doctor can order a high-field or a low-field MRI. If scheduling an MRI with a standalone facility make sure they offer the one your doctor has prescribed. Furthermore, you’ll want to ensure the facility has a radiologist on staff who can interpret the results to send to your doctor.
Prescription costs can be outrageous, and I could write an entire series on this topic, but for the sake of this article, I will share a few consumer tips.
When new drugs are developed, the U.S. Food & Drug Administration (FDA) allows for patents to prevent copycat drugs from being created for a certain number of years. This is due to the cost associated with the research and development of these drugs.
As a result, we pay a much higher price for drugs that are still in their patent term as we only have the brand name option available.
Once the patent expires, we can opt to fill a generic version (if our doctor approves it). Generic drugs are always cheaper.
I found this Frequently Asked Question Guide on the FDA’s website regarding patents and exclusivity.
Tools for shopping prescriptions
Good Rx is a tool that can be utilized to help lower your prescription costs. You can find the lowest cost pharmacy for your specific prescription. Furthermore, you may find manufacturer’s coupons which may be cheaper than filling the Rx with your insurance.
I’ve had people tell me that they used this app (available on desktop or phone) and discovered certain doses of the same Rx are drastically cheaper. They’ve been able to tell their doctor who changed their prescription to take advantage of the lower cost dose and have them double up.
Drug manufacturers often release coupons for high-cost drugs which are still under patent. Here is another good website to check for manufacturer’s coupons: NeedyMeds.
Additionally, your pharmacist may be aware of coupons or co-pay assistance programs for high-cost drugs. Take advantage of their knowledge. The bottom line is don’t simply pay the sticker price!
Alright now that you’ve been equipped with some tips on being a smart consumer of your healthcare, I’m going to switch gears and give you a few pointers on open enrollment.
Firstly, if your employer provides insurance, make sure you know when your open enrollment period is. Commonly it is one month before the renewal month.
- Medicare open enrollment for 2019 is October 15, 2018, through December 7, 2018
- The individual marketplace open enrollment for 2019 is November 1, 2018, through December 15, 2018.
Open enrollment is an annual period where you can elect to change your coverage and enroll if you formerly waived.
Otherwise, you’ll need a qualifying event to make changes throughout the year. Qualifying events include:
- Involuntary loss of coverage
- Birth or adoption of a child
Things to consider
If you are choosing between plans, you’ll want to pay attention to the following things before making your decision:
- Deductible (single/family)
- Health Savings Account (HSA) qualified plan versus traditional plan
- Maximum out of pocket
It is hard to predict our future healthcare consumption so we make the best decisions we can with the information on hand. Typically, I’d advise choosing a plan with a cost analysis based on your previous year’s healthcare consumption habits.
Keep in mind that preventative care is covered at a zero dollar cost to you per Healthcare Reform. Preventative care includes:
- Annual physical exams
- Women’s well exam
- Child immunizations
- Flu Shots
- A lot of the testing recommended for men & women at age-appropriate times
The buyer beware is if you inquire about a condition at your wellness visit, the provider could code it as diagnostic and then it will be either subject to your deductible or co-pay.
Comparing plans based on your consumption
Estimate how many episodes of care you consumed over the past year and break it out by:
- Doctor visits
- Urgent care visits
- Emergency room visits
- Prescriptions (generic or brand)
- In-patient stays
- Out-patient surgeries
- Major tests (blood work, x-rays, MRIs, CAT scans, Ultrasounds)
Now you will do a cost comparison analysis based on your plan options with “the things to consider” I mentioned above. You’ll need to know the allowed amount for each episode which can be found on your Explanation of Benefits.
If you are comparing an HSA qualified plan versus a traditional plan, you’ll need to be mindful of the following:
- Everything is subject to the deductible on HSA qualified plans.
- Only major medical episodes of care are subject to the deductible on traditional plans.
- Major medical includes major testing, out-patient procedures, and inpatient stays
- Traditional plans typically have co-pays for the following episodes of care:
- Office visits
- Urgent Care
- Emergency Room
- Be aware of the appropriate co-pay for specific co-pay episodes of care
HSA qualified plans generally have a cheaper premium and allow you to contribute pre-tax dollars to an HSA account. Be sure to include these perks into your analysis.
Furthermore, your employer may allow you to contribute pre-tax dollars to a Flexible Spending Account (FSA). You do not need to be on an HSA qualified plan to contribute to an FSA. However, you cannot contribute to both an HSA and an FSA simultaneously.
Differences between HSAs and FSAs
- HSA dollars roll over every year
- You can invest HSA dollars
- You only have access to the amount of money in your HSA account at any given time
- The IRS sets HSA & FSA contribution limits each year
- FSA dollars are, basically, use it or lose it
- Your employer may allow you to roll over a small amount each year or give you a grace period in the new year to use up the previous year’s dollars
- With an FSA you choose your annual contribution, and it’s taken out in increments via your pay periods. However, you can use the full contribution on day 1.
This was a broad brush of things to consider as I certainly could not include every factor in one article. However, I hope this helps you in your consumption habits as well as open enrollment decisions.
Now it's your turn. Are you prepared for open enrollment? Was this guide helpful in understanding the process? Will it make you a better consumer? We welcome your feedback and comments.Follow us
Fred is the Founder and President of Leamnson Capital. He helps people preparing for and in retirement with financial, retirement, Social Security, and estate planning.
At Money with a Purpose, he focuses on three primary areas: Personal Finance, Overcoming Adversity, and Lifestyle. He has been quoted in Forbes, USA Today and appeared in Money Magazine, MarketWatch, The Good Men Project, Thrive Global and many other publications.