Caregiver choice, caps, drug coverage—it's a jungle out there.
Poring over health insurance alternatives, as millions of Americans will do this month and next, is nobody's notion of a fun time. But mulling over the various options is the only way to meet your needs without devastating your paycheck. These 10 tips will help you focus.
1. Weigh flexibility. The three main types of health plans differ in members' degree of personal choice in selecting caregivers. Someone with diabetes or another chronic condition may want a point-of-service (POS) plan or preferred provider organization (PPO), which offer unrestricted access to specialists. An HMO, which limits members to physicians in a defined network, might provide enough choice and protection for someone young and healthy.
2. Check the provider network. If physicians you use are not in the plan, switching to others will be a hassle—and if you chose them for their specific expertise, your health might even be affected.
3. Consider coupling catastrophic care with a special fund. You can cover the high deductibles in a catastrophic-care plan from a health reimbursement arrangement (HRA) set up and funded by your employer. Otherwise, you can pay the deductible from a tax-deductible health savings account you set up yourself.
4. Monitor the maximums. Most plans specify the out-of-pocket total, often thousands of dollars, that members must pay before full coverage kicks in. But employees in 20 percent of health plans are never fully covered, according to the Kaiser Family Foundation's 2008 Employer Health Benefits Survey. And copays usually don't count toward the maximum.
5. Check for caps. Many plans impose annual limits—on coverage for medications, for example, or the number of visits for physical therapy following an injury. A 2008 report by the Commonwealth Fund found that one fourth of insured adults face steep bills because of coverage limitations.
6. Review your medications. A brand-name drug for a chronic condition can be costly. The plan's list of medications, or formulary, will show your copay.
7. Get meds by mail. Many plans offer this convenient option, which often includes lower copays.
8. Cut expenses with a tax-deductible FSA. Like HRAs, flexible savings accounts are set up by employers, but unlike HRAs, they are employee funded. Contributions are subtracted from pretax income.
9. Check out wellness management incentives. Many plans offer discounts if you take a health risk assessment, stop smoking, or keep your diabetes under control.
10. Use comparison tools. Ninety percent of employers provide online cost estimators for comparing plans, but only 9 percent of employees use them, says benefits consultant Hewitt Associates.