Health insurance can be complicated and perplexing, and the fact that Americans spend more per person for healthcare than the rest of the world is quite upsetting. However, unless things drastically change in 2022, you'll probably want to have some type of insurance in case you get sick or injured.
Open enrollment for the Affordable Care Act (ACA) exchange at Healthcare.gov for health insurance year 2022 runs from November 1, 2021 until January 15, 2022. Alternatively, if you have health insurance via your employer, many employers have open enrollment periods around this time.
Open enrollment, in case you didn't know, is when you can sign up for coverage or make changes to your current plan. You won't be allowed to make changes outside of open enrollment unless you have a qualifying event, such as getting married or having a child, or if you lose your current coverage.
I spoke with Lisa Lough, President of Cigna Individual and Family Plans, to get some advice on how to pick the proper health plan for you this open enrollment season, and she was really helpful. What she had to say was as follows:
Note: This is generic advice that may or may not apply to your individual situation. We recommend interacting with a financial expert for individualised guidance.
1. Start comparing plans by checking out the premiums, aka monthly payments, for the plans available to you.
The premium is the cost of your health insurance plan, which is usually paid monthly or twice a month. It's similar to the Netflix subscription cost. Premiums differ depending on the insurance carrier, the type of plan you select, and your age and region if you purchase through the Affordable Care Act (ACA) exchange rather than through an employer.
2. If you're getting a plan on the ACA exchange, see if you qualify for subsidies. These are tax credits that can lower your premiums.
If you purchase insurance through the ACA exchange, you may be eligible for subsidies — or tax credits — that can help you save money on your monthly healthcare costs by guaranteeing that your premium is based on your income level. Because of the epidemic, more people are eligible for subsidies on the individual market than ever before, so check to see if you qualify.
3. Next, take a look at the plan's deductible. That's the amount you'll have to pay out of pocket before your coverage kicks in.
A deductible is the amount you'll have to pay out of pocket for qualified medical services or prescriptions before your insurance kicks in and helps pay for them. Check to discover if the plan you're considering includes a separate deductible for medical and pharmacy services. If that's the case, you'd be in charge of each. Check to see if the deductible on the plan you chose is something you can afford. Keep in mind, however, that even before your deductible is met, certain preventative care is low-cost or free.
Depending on the plan, you may be responsible for all of your qualified expenses until your deductible is satisfied. Other plans rely on a co-pay, which is a one-time payment made when you visit your doctor or fill a prescription. If your plan requires a co-pay, those charges may be deducted from your deductible.
4. You'll also want to look at the coinsurance percentage. This represents what portion of your medical bills you'll be responsible for paying after you hit your deductible.
Once you've met your deductible, your plan will start splitting the costs with you. The way you split costs with your insurance carrier is referred to as coinsurance. For example, if your coinsurance is 20%, you pay 20% of the cost of your covered medical costs after you've paid your deductible for the year, and your health insurance plan pays the remaining 80%. The more your coinsurance percentage, the greater your cost share. You are also responsible for any expenditures that the health plan does not cover.
5. Check the out-of-pocket maximum too. This number represents the most you would pay for covered medical care within a year.
Your out-of-pocket maximum is the amount you can pay for covered medical expenses in a year, as determined by your plan. This figure includes deductibles, copays, and coinsurance payments. Once you've reached your yearly out-of-pocket maximum, your health plan will cover the balance of the year's covered medical and pharmaceutical charges.
6. Finally, take a look at the plan's network. This is the group of doctors and other providers that accept this insurance.
The network of a plan should be checked last while shopping. A network is a collection of medical care providers, such as doctors, pharmacists, and specialists, that have signed agreements to serve customers of specific insurance plans. If you don't already have a doctor, be sure that the plan's network includes your and your family's chosen doctors and pharmacies, or that you choose a doctor who is in-network for that plan if you don't already have one. If you don't, you'll end up paying extra for out-of-network services.
With the jargon out of the way, Lough went over the many types of health plans that might be available during open enrollment, as well as some advice for more particular scenarios.
7. Health plans come in a lot of varieties (with so many acronyms), but what it all boils down to is how each plan allows you to access care.
Health maintenance organisations (HMOs), exclusive provider organisations (EPOs), point-of-service (POS) plans, and preferred provider organisations are examples of distinct types of health insurance (PPOs). The key distinctions between these plans are whether you need a primary care physician, whether out-of-network coverage is provided, and whether you need a referral to access certain treatments. Always check whether your doctor is in-network when comparing plans, and consider how much freedom you require in terms of where you receive care.
8. High-deductible health plans can be a low-cost option if you're generally healthy and don't usually see a doctor more than once a year.
Health insurance plans with larger deductibles often offer cheaper insurance premiums and could help you save money if you're in good health and don't visit the doctor often. Basic preventive treatments, such as an annual physical, recommended screening tests, and vaccines, are covered at no cost by most health plans, including all plans offered via the ACA marketplace.
9. If you have an ongoing or chronic condition, you might be able to save on out-of-pocket costs by going for a plan with a higher premium and a lower deductible.
Chronic illnesses sometimes necessitate regular medication and more frequent medical visits, as well as expensive hospital stays or procedures. Consider a health plan with reduced deductibles and coinsurance to help you keep expenditures under control.
Better better, ask whether a condition-specific plan is available, as they will be more suited to your healthcare needs and can help you save money on healthcare costs. Cigna, for example, offers asthma, COPD, and diabetic plans through the ACA exchange, with low- and no-cost benefits for select equipment and supplies, preventative care, common drugs, and medical services needed to manage these disorders.
10. If mental health coverage is important to you, check the Summary of Benefits to see what a plan will cover.
You'll need to check at the Summary of Benefits to see if a plan includes mental health coverage. This is a document that outlines what services the plan covers and how much you'll pay for them. A line stating coverage for mental health, behavioural health, or substance addiction services is usually included. This could be one of the deciding elements in how you choose your plan, depending on your mental health needs.
You may also check through the plan brochures to determine if any additional plan features [such as telehealth or internet treatment] have an influence on mental healthcare availability or affordability.
11. If you and your partner both have access to health insurance plans through work, you'll want to carefully compare them to choose the best plan for both of you.
Calculate the numbers in several ways, allowing for lower and higher healthcare demands throughout the year. Examine each employer's plan to discover which ones offer reasonable premiums, low deductibles, and a provider network that includes your family's preferred doctors. Examine how the rates and deductibles differ when the employee is joined by a spouse or partner.
12. And if you're looking to add your kid to your plan, it might make sense to consider paying a higher premium to cut down on unpredictable out-of-pocket costs.
If you have children, it's likely that estimating your healthcare costs may be more difficult. An unforeseen illness or injury, such as a fall on the playground or the flu, can quickly push up expenditures. A plan with a higher premium and a lower deductible that covers a bigger percentage of your medical costs may be beneficial for your family.
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