Review your health care plan -- but don't drop it
Posted
Nov 06 2008, 07:12 PM
by
Karen Datko
Rating:
Many employers are now holding open enrollment for health insurance, so it's time to thoroughly explore your options. With rising costs and shrinking coverage, you might save significant money by changing your plan.
But please do not follow an unfortunate new trend and decline coverage to avoid paying what are likely to be higher costs. Says Consumer Reports (and we cannot emphasize this enough):
That is a bad, bad idea. The cost of even a single serious health condition -- an injury, an accident, a bout of depression, an unexpected illness or surgery -- can hit five figures before you know it and lead rapidly to financial ruin.
Health insurance is terribly complicated. Thank goodness there's help, including Andy's post at Saving To Invest called "Health care plans: 10 tips on choosing the right option" and the aforementioned post at Consumer Reports. [readmore]
Andy strongly urges you not to delay studying the paperwork your boss has given you. Health insurance truly is one of the most significant purchases you will make all year. He also provides a glossary so you can better understand what you're reading.
Among the issues to consider:
If you're young and in good health, cheaper can be better. But if you have children (or are planning to have a child) or you have a history of health needs in your family, consider a more expensive plan. Andy says that "if you end up in hospital, the out-of-pocket deductible and co-insurance could cost you much more than what you would pay in additional contributions."
A flexible spending account is a great idea. You have to use up the pretax money you've set aside in the account, usually by March 15 of the next year, or lose it, but it's not as difficult as it may seem. Andy spent the $100 left in his account last year on medicines he knew he'd need in the future. (He adds that you should keep your receipts, even if you're paying with a health credit card.)
Consider all options. That includes much-maligned HMOs, which Consumer Reports calls the "most economical type of health plan." Pittsburgh blogger Kacie at Sense to Save writes, "Our HMO has worked really well for us in the last year and we're going to keep it."
Fill out the questionnaire. The Wall Street Journal's Health Blog says many employers offer a discount on premiums or other incentives if you fill out a questionnaire about your health.
Be sure to review your other job benefits. Health insurance is one of several benefits that can be changed during open enrollment.
