Every year, fall brings the opportunity to review your health insurance options. Whether you have coverage under an employer plan, the Affordable Care Act marketplace, or Medicare, now is the time to review your coverage and plan for the next year.
If you are still working, start by creating a list of your healthcare expenses for 2024. This will help you create a baseline for next year. Compare this with your summary of benefits. Determine how many times you visited a primary care physician versus a specialist. Look at the expenses covered and what you had to pay. Review your prescriptions and what they cost.
Make a list of the providers and facilities that you regularly visit. See which are in-network and which are out-of-network. There may be some you want to keep working with and others you don’t mind replacing.
Consider any planned medical procedures for next year. Make sure the physician or specialist and the facility will be covered.
There are several types of plans, all designed to provide the specific coverage that meet your needs. Health Maintenance Organizations (HMO), Exclusive Provider Organizations (EPO), Preferred Provider Organizations (PPO), and point-of-service (POS) are not created equally. Ensure you understand which coverage you opt for and how it will impact the benefits you receive, the professionals you can see, and the out-of-pocket expenses you will be expected to pay.
High-deductible Health plans (HDHP) can include all the network types mentioned above. The difference is the coverage is paired with a Health Savings Account (HSA). HSAs allow you to put money into an account before tax, and then use it to pay for medical expenses without paying taxes. For more information on HSAs, see our article Getting a “Triple Tax” Benefit from our July-August issue of Money Moxie.
If you are younger than 65 and not working, you can get coverage through an Affordable Care Act plan. These plans all cover specific core benefits. There are bronze, silver, gold, and platinum plans.
The differences come from the premiums you pay and the health care cost split between you and the company. Bronze plans have the lowest premiums and the highest deductible. That changes from plan to plan, with Platinum plans having the highest premiums and the lowest deductibles.
You can see the plans and prices in your state by visiting www.healthcare.gov/see-plans. These plans require that you pay the full premium. However, you may qualify for a government subsidy based on your annual household income. To find an agent to help you understand the options, visit www.healthcare.gov/localhelp.
If you are age 65 or over, you can participate in Medicare. There are a couple of options you should understand when selecting your coverage – Original Medicare and Medicare Advantage.
Original Medicare is provided by the federal government. Coverages are broken down into Part A, which covers hospitals; Part B, which covers doctors and outpatient services; and Part D, which covers prescription drugs. When choosing Original Medicare, you will pay deductibles, co-insurance, and expenses beyond Medicare coverage. For this reason, most people get a Medigap supplement policy. These policies are provided by insurance companies and cover expenses after you pay a deductible, co-payment, or co-insurance. Medigap plans are defined by capital letters A through N. Every insurance company offering Medigap plans provides the same standardized coverage. The difference between each company comes down to the premium you pay.
If you need coverage for prescriptions, you need to enroll in Medicare Part D. Each plan has specific coverage for different prescription medications. You can visit www.medicare.gov/plan-compare to see the plans offered in your area.
Original Medicare and a Medigap supplement may provide the broadest coverage with the least restrictions. Because most doctors accept Medicare, you can continue to see the doctor of your choice. They also offer the most flexibility if you split time between different states. You can review the Medicap plans in your area by visiting www.medicare.gov/medigap-supplemental-insurance-plans.
Medicare Advantage Plans, also known as Medicare Part C, are provided by private insurance companies. They combine coverage for Part A and Part B and generally provide prescription drug coverage. They may also offer dental coverage, gym memberships, and other special coverage.
Premiums for Advantage plans are generally lower than Medigap plans. Some plans have no premiums at all. This makes them desirable to retirees who are trying to manage expenses. However, you will be required to use a specific network of doctors, hospitals, and other providers. You may also be required to get a referral to see a specialist or get pre-approval for high-cost services.
In-network doctors can change, and you may find that the doctor or facility of your choice is no longer available. Also, traveling or splitting time between other states may impact which doctor or facility you use.
Regardless of your situation, working or in retirement, taking the time to strategically choose a plan that best suits your needs can make a difference for your health and wealth. This year, make open enrollment season a priority.
