Consumer profile part 2: finances
Open Enrollment / By Lance De Peralta / October 8, 2021
Let me preface this 5-part blog series with a friendly disclaimer:
- The information presented is intended for general education purposes about health benefits.
- All terms, concepts, and lessons have been simplified for easy viewing and consumption.
- Each person’s situation is different. Please talk to your Human Resources department / representative(s), along with the appropriate vendor(s) & insurance broker(s) responsible for offering and administering your company’s health benefits, about your circumstances and available options.
No health plan decision is complete without factoring in cost.
No consumer decision is.
As you review the cost of a health insurance policy, ask yourself:
- What is your current income and monthly expenses?
- How much is the premium?
- What are the copays, coinsurance, deductibles, and OOP max?
As you look at your current expenses, think about the ways you can adjust your budget to purchase your preferred health insurance choice or pay for an unexpected medical bill.
Also, evaluate the cost implications of not getting the appropriate care for a particular condition or illness. To understand why, let’s revisit my previous discussion about basic categories of care and networks.
Categories of care
- Preventive care: free / low-cost
- Urgent care: moderate cost
- Emergency care: high cost
Most health plans cover eligible preventive care services at no additional cost to you (i.e., no out-of-pocket expenses). Your premiums pay for this care.
At the other end of the cost spectrum is emergency care. When it’s a true emergency (e.g., you get into a serious car accident), your plan - regardless of network coverage (which I'll go over next) - is supposed to help pay for the associated costs. Otherwise…prepare yourself for sticker-shock!
Check out this post from our Chief Technology Officer (CTO), Daniel Sherer, about the pitfalls of going to the ER.
Seeking healthcare services from in-network providers is often cheaper than seeking them from out-of-network providers.
I liken this arrangement to a wireless company's roaming charges - remember those?! (I have to confess that I don't know whether or not they're still a "thing", but I'll go with it!) Anyway, unless roaming is included in your wireless plan, those charges can add up quickly if you're not careful.
Or here's another - more relatable - analogy. You bought a new Camry and it came with a warranty from Toyota, but you decided to take your car to a Honda dealership. The result? Money down the drain.
Ok, I'm done with the analogies.
Remember my cost-sharing scenario?
Click here for a refresher.
Instead of a $50,000 surgical procedure, it now costs $40,000.
Because the insurance carrier negotiated the cost down on your behalf. Assuming (again) no other healthcare costs for the year, your share would still be $5,000 (i.e., your OOP max), but that's significantly lower than what you would be obligated to pay otherwise.
Let's say your plan only offered in-network coverage but you went to an out-of-network provider for your non-emergent, surgical procedure. You could be liable for the full $50,000 bill NOT $40,000!
Because the out-of-network provider doesn't have a contractual arrangement with your carrier.
$5,000 vs $50,000 – for a SINGLE procedure!
Now imagine yourself seeking additional services and procedures outside of your plan’s network.
Are you beginning to see the importance of selecting the right coverage during Open Enrollment?
Something else to consider…expense accounts
Have you ever come across these acronyms - FSA's, HRA's and HSA's? They all refer to special accounts intended to be used to cover specific healthcare expenses.
- FSA: flexible spending account
- HRA: health reimbursement account
- HSA: health savings account
I won't go over them in detail here - they deserve their own blog post(s). Instead, what I will say is to find out if your employer offers (any of) them. If so, you might want to explore them during the Open Enrollment process. Talk to Human Resources. Ask colleagues, friends, and family members if they've ever used them and to describe their experiences (good or bad).
I'll end this post (and series) with this final piece of advice.
If you think about it, when you’re selecting coverage, you're making an important financial decision. So, I urge you to:
- Ask a TON of questions (before, during, after Open Enrollment).
- Take advantage of education materials provided by your employer. If none are available, have your employer give us a call (wink, wink).
You owe it to yourself (and your family) to make an informed decision about your next health plan.