Note: This content is part of a paid partnership between GEHA and Her Money Media
We’re heading into fall – the season of watching the leaves change color, pumpkin-spiced everything and, yes, open enrollment. This year, you’re going to want to pay particular attention to the latter. Changes in the health care landscape coupled with the coronavirus pandemic make shopping around for the right health plan for you and your family more important than ever. “With everything going on, people have a lot of questions,” says Louise Norris, health insurance broker.
And even in a typical year, many of us make costly mistakes. According to a recent survey from GEHA, a not-for-profit provider of health benefits for federal employees, 46% of Americans said they chose the most expensive health insurance available to them because they assume it’s the best coverage available. Simultaneously, 60% of people said their current insurance provides more coverage than they really need.
Research from the Kaiser Family Foundation (KFF) has shown that the shopping process is, in and of itself, confusing. “People really have trouble comparing plan choices and knowing what [factors] they should look at,” said Karen Pollitz, Senior Fellow at the Foundation, focusing on private insurance and health reform.
That said, here’s your guide for shopping for coverage.
Get Ready, Get Set…
If you’re purchasing your coverage via the exchanges, your open enrollment period starts November 1 and runs through December 15. If you’re on Medicare, it’s from October 15 through December 7. And if you get your health insurance via your employer, the exact period is the employer’s call, but it generally runs somewhere during this timeframe. For example, the Federal Government, our country’s largest employer, starts open enrollment this year November 9 and runs through December 14. So, talk to your benefits department and watch for announcements. Perhaps the biggest mistake made – and it’s one that happens no matter where you get your coverage – is not shopping around. “Don’t just auto renew,” Pollitz emphasizes.
Some Considerations Are Universal
Choosing a health insurance plan means striking a balance between the care you need and the price you pay. A policy for which you pay high monthly premiums will generally provide a richer menu of benefits, including fully covered preventive care, with a lower deductible (the amount you have to pay out-of-pocket before the insurance company steps in to pay). A policy with lower premiums will generally come with reduced benefits and a higher deductible. (Note: Understanding the lingo can be really helpful as you make your way through your options. GEHA breaks the terms down here.)
Three universal considerations should be the provider network you have access to, prescription medication you’re currently taking, and if you’re anticipating any life changes next year—like having a baby. Before choosing a plan, check to be sure that the doctors you care about and the hospital you’re most likely to go to in an emergency are in your plan. Do the same with medications you’ll need for any chronic conditions.
It’s also helpful to understand the basic difference among plan types.
- A Health Maintenance Organization or HMO (and almost all plans on the healthcare.gov marketplace are now HMOs) provides a network of doctors and hospitals that you can access for care that the insurer will pay (or help pay) for. If you see an out-of-network provider, your claims will not be covered. With an HMO you’ll choose a primary care provider (PCP) and will typically need a referral to see a specialist.
- A Preferred Provider Organization or PPO provides more freedom. You may or may not need to choose a PCP, but you typically don’t need referrals to see specialists. Also, if you see an out-of-network provider, your services will be covered, but you will likely pay a higher portion of the charge. PPOs are more expensive than HMOs.
- A High Deductible Health Plan (HDHP) can work with an HMO or PPO, but generally comes with a greater out-of-pocket cost before benefits kick in. Because of that, premiums are typically lower. If your deductible is $1,400 or greater for a single person in 2020 or $2,800 for a family (with out-of-pocket expenses capped at $6,900 for singles, $13,800 for families) you will be eligible to open a Health Savings Account (HSA) that enables you to pay for medical expensive with pre-tax dollars. This effectively provides a 25-30% discount (ish) on all your medical care. Often times, HDHP plans through an employer offer an automatic contribution to your HSA—which can make these plans very appealing. For example, GEHA’s HDHP plan, offered to federal employees, includes a contribution of $900 for individuals and $1,800 for families. Money contributed to an HSA, by an individual or an employer, belongs to the account holder. Even if they change employment or medical coverage.
If You Get Coverage Through Your Employer …
First, pay particular attention to your specific open enrollment dates, as they don’t always line up with the federal ones. If you’re working from home as many people are, this means keeping your eyes open for correspondence from your benefits departments. Then compare the plans you’re offered.
“Price shopping may be more important to you than ever before—but it’s important to know how to do so effectively,” notes John Patrick, Vice President at GEHA. “Pay attention to how much it costs annually to have a plan—and how much it costs to use it.” Less expensive plans might have lower premium costs because they have higher out of pocket costs. Of course, you can only sign up for what you can afford, but run the numbers to be sure that money you’re saving on premiums won’t cost you substantially more on services you’re likely to use.
Also, be particularly alert for so-called “narrow network” plans that limit your choice of providers. According to the last employer survey from the KFF, about one-quarter of employers were offering these plans. If you’re not sure what you’re getting, look to the SBC, or Summary of Benefits and Coverage. “Each plan has to provide one and it will let you compare, line by line, what’s different between plans,” says Pollitz. “Employer plans are required by law to give the SBC to you.”
If You’re Shopping on the Open Market …
On the individual market, you can expect more coverage options this year. More companies are joining the exchanges and expanding their coverage areas, experts explain, because individual coverage has become profitable again. For this reason alone, you shouldn’t assume the policy you bought last year is the right one for you this year.
You also shouldn’t assume you’re getting an accurate subsidy on coverage you buy on the exchange based on last year’s information. Go into the exchange and update your income and other information. Your subsidy will be based on the second lowest cost silver plan, and, notes Pollitz, there may be a new plan that pushed out the old one for that second position. “If you just auto renew you may find you owe a lot more money out of pocket.” It’s a good idea to look for the SBC to compare plans on the same merits. Just note, it may not be front and center. You may have to search around a bit to find it.
Finally, know the difference between shopping on healthcare.gov or an affiliated state exchange versus a private marketplace. When you shop on healthcare.gov the only thing you’ll see are ACA-qualified policies that cover 10 essential benefits and provide subsidies if you earn between 100% and 400% of the poverty level. (Some state-exchanges provide additional subsidies of their own for residents.) If you shop on private exchanges, you may also be offered non-marketplace plans including short-term insurance and specific illness (i.e. cancer) insurance. These may not offer subsidies and provide the same benefits, and it’s sometimes hard to tell the difference.
Mark Your Calendars for Next Year
Finally, Norris notes that she can hardly pick up the phone without being asked what happens if the ACA gets overturned. The message: Nothing for now. If the case on the Affordable Care Act is argued in front of the Supreme Court in November, there will be a ruling by June of 2021. “No matter which way it goes, your coverage for 2021 isn’t going to change at that point. It is a contract that goes for the whole year.”
For more insights, tune into our on-demand webinar: “How to Shop Smarter for Health Coverage.”
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