Open Enrollment Begins November 1st. 4 Tips to Consider When Choosing a Health Insurance Plan

Medical insurance open enrollment (the annual period where you can enroll in major medical health insurance plans), begins November 1, 2020 and will remain open for 45 days, or until December 15. For someone looking to change or add coverage, this offers a short window of time to decide on and select your health insurance plan. Open enrollment also provides an opportunity to review your current plan and health situation.

Before rushing a decision to meet this deadline, take some time now to review and prepare. Below we’ve rounded up our top tips for choosing the right health insurance plan for you and your family’s needs. 

Who Should Utilize Open Enrollment?

The Open Enrollment Period is for anyone looking to make a change to their health insurance coverage, whether through their workplace or the federal market. This could include looking for a cheaper plan with similar coverage, gaining coverage if you previously had none or changing your coverage altogether to better meet your needs.

Tip #1: Assess Your Current Costs 

Each year during open enrollment it is a good idea to review your healthcare-related expenses from the past year. Take a look at how much you’re currently paying per month for your plan premium as well as what sort of out-of-pocket expenses you paid over the past 12 months.

These could include:

• Routine doctor’s visits
• Specialist visits
• Prescriptions
• Emergency room or urgent care visits

Unless you foresee any major changes in the coming year, such as pregnancy or preplanned surgeries, this could be a helpful indicator when it comes to determining what type of coverage will be cost-effective and appropriate for you.

If you found your out-of-pocket expenses to be high, now’s your opportunity to search for a plan with lower deductibles, although your monthly premiums will likely rise. Alternatively, if you found that you had minimal visits to the doctor, few prescription costs, and low total out-of-pocket expenses, you could consider plans with higher deductibles to lower your monthly premiums.

Tip #2: Choose Your Marketplace

You’ll may be able to gain coverage through several marketplaces including:

• Your or your spouse’s workplace
• Federal marketplace
• Local or state marketplace
• Private exchange
• Directly through insurance providers

If you have the option to gain coverage through your employer, this will likely provide you with the lowest premiums. That’s because your employer often pays a portion of the premium, which tends to be lower anyway as a result of group coverage.

If your employer does not provide healthcare coverage or you wish to look elsewhere for it, you can purchase coverage through the federal or state marketplace. You’ll start at HealthCare.gov, which will then direct you to your state’s marketplace (if applicable). While premiums are likely to be higher than coverage through an employer, you may be eligible for premium tax credits to help offset the monthly cost.

Tip #3: Decipher Your Available Plan Types

There are four common types of health insurance plans you’ll come across when selecting coverage: HMO, PPO, POS, EPO. An option to consider within each type is a HDHP with a HSA.

Health Maintenance Organization (HMO)

Pros: HMOs tend to have lower monthly premium costs and out-of-pocket costs as compared to other plan types. 

Cons: You’re typically limited to seeing providers only in your network, and these must be coordinated by your primary care provider (unless it’s an emergency). This gives you less overall flexibility.

Preferred Provider Organization (PPO)

Pros: PPOs offer the user more freedom when it comes to choosing healthcare providers and specialists. You can see people outside of your coverage network, although this will typically result in higher out-of-pocket costs. However, you typically will not need a referral from your primary care provider to make appointments with specialists.

Cons: Out-of-pocket costs and premiums tend to be higher for PPO plans, especially when compared to an HMO.

Point of Service Plan (POS)

Pros: With a POS plan, you have the flexibility to visit out-of-network healthcare providers, but typically at a high out-of-pocket cost.

Cons: Similar to an HMO, you will likely need a referral from your primary care provider to see a specialist or have a medical procedure done. Additionally, your primary doctor will coordinate your care for you.

Exclusive Provider Organization (EPO)

Pros: An EPO will typically offer you lower out-of-pocket costs, and a referral is not needed to see specialists or have medical procedures done.

Cons: You will be required to visit specialists within your network, unless it is an emergency. An EPO will typically provide less flexibility and freedom when it comes to choosing care providers.

High Deductible Health Plan (HDHP) with a Health Savings Plan (HSA)

Depending on your personal situation, an option to consider with any of the above plan types is a High Deductible Health Plan (HDHP) paired with a Health Savings Account (HSA). A HDHP is just as the name describes - a higher deductible plan. One benefit of this type of plan is that the premiums are typically less than other plan types. A second benefit is that a HDHP can be paired with a HSA.

A HSA is a tax-advantaged account that can be used by those enrolled in a HDHP. HSA accounts are the only triple tax advantaged accounts available. Contributions are tax deductible. Earnings grow tax free. Withdrawals are tax free if used to pay for qualified health related expenses.

Balances in a HSA can be carried over year after year. Funds in a HSA can be invested for additional long term growth. For 2021, the contribution limit is $3,600 for individuals and $7,200 for families. Depending on your personal situation, a HDHP paired with a HSA may or may not be a good alternative. Estimating your medical expenses is the best place to start.

Tip #4: Account For Your Current Providers

As shown above, every plan type either requires you visit in-network providers or offers lower out-of-pocket costs for visiting an in-network specialist. If you already have doctors you prefer to see on your current plan, switching plans could jeopardize your ability to visit them in the future or cost you more to do so.

If keeping your doctor is an important consideration, make sure to check whether or not your current healthcare providers are in-network when considering switching plans. If they are in the network for the new insurance plan, you should have no problem continuing to see them as you did before. If they’re out-of-network, you’ll either have to find a new provider or prepare to pay more for every visit.

With the ever changing regulations, picking the right health insurance plan for you and your family can be tedious and sometimes intimidating. However, with some time left before open enrollment, create your plan of action now. Reduce the stress and headaches by understanding what type of plan may be right for you, what coverage you know you’ll need and determine what marketplace you’ll be buying from. When November hits, you’ll be more than ready to make a decision that’s right for your healthcare needs.