November has officially begun.
Decisions are upon us. All of the normal holiday decisions, like which Lego set to buy the little one or which relatives to invite (or not invite) for Thanksgiving dinner, are dancing through our heads as the seasons change.
But not only are we getting wrapped up in (see what I did there?) holiday season decisions, but some of us are also figuring out how to make the right health insurance decisions as open enrollment season commences. Maybe you’re opting into a plan for the first time, or you’re now accomodating a new spouse or child, or you’re wanting to boost your plan or reduce it. Whatever it is, choosing the best plan takes a little thoughtful consideration.
More on that in a moment…
Though things are looking a little less cluttered on the tax calendar now, we are still busily helping clients make year-end adjustments for a more favorable tax return come 2022.
And one way to have a more favorable tax return is to spread the holiday cheer through some IRS-approved charitable giving. While you’re planning out all those gifts, you can plan some causes to give to as well. After two years of hard hits on the economy, there are plenty of people and places needing help. Here are some tax-break giving ideas to get you started.
And we’re always game to help you think through this for your specific tax situation, of course:
Now, back to healthcare…
Emelia Mensa EA, CPA’s Insights on How to Choose the Right Health Insurance Plan
“Master the topic, the message, and the delivery.” – Steve Jobs
It’s that time of year again. Time to find that perfect thing that everybody wants (and needs), and you have enough choices to give you a headache.
No, I’m not talking about holiday shopping. It’s open enrollment season which means determining how to choose the right health insurance plan for next year.
During these weeks, you and other workers can sign up for health coverage or change your health insurance plan.
You’ll pick a plan for yourself, and you can also choose to cover your spouse and kids. Or you can drop a plan you’re on. You can even apply for other types of insurance like Medicare (if you qualify) and coverage on the health insurance exchanges.?
Open enrollment generally runs from now to about early or mid-December or a little later. If you don’t sign up for health insurance during open enrollment, you will probably miss the window to sign up until the next enrollment period, unless you get hit with a qualifying event.
The most popular (if you want to call it that) qualifying event is the loss of a job. Other events include aging out of your parent’s health insurance or moving away from your insurance company’s service area, getting married, having a baby, or adopting a child.
Side note: One “event” that doesn’t qualify for getting another chance to sign up is not paying your premiums until your previous health insurance gets canceled.
Question and answer
Let’s assume none of that good stuff happened to you and now you have to pick a plan. You’ll generally choose between:
- an HMO (“Health Maintenance Organization), generally cheapest but with a smaller network of doctors and more rules;
- a PPO (“Preferred Provider Organization”), with more doctors and a little more flexibility – and heftier prices;
- a POS (not what you think: it’s a “Point-of-Service” plan), kind of combo of the HMO and the PPO where you have to use an in-network primary care doctor for the best rates, but you can go out-of-network for services if you want to pony up extra); and
- an HDHP (“High-Deductible Health Plan”), where you pay more upfront to see the doctor but premiums and other costs are lower.
(Often during open enrollment, you get to tack on dental and vision insurance, as well as other types of policies. Know that you can buy some of these coverages all year-round.)
Before you get stressed figuring out how to choose the right health insurance, begin by asking yourself:
- How do you feel most of the time? Do you have to go to the doctor for more than just an annual checkup?
- What kind of doctor? Any special scans go along with that? What prescriptions?
- What about your family (or whoever else the plan is going to cover)?
- What insurance do these doctors take?
Those answers give you an important start when you’re trying to unravel a puzzle this big – and this pricey.
Show them the money
Modern healthcare doesn’t like to talk about money – at least upfront – but money (mostly yours) is the favorite topic of insurance companies. And they’ll use lots of big, fancy words to talk about it.
- Premiums are your bill for coverage.
- Co-payments for certain kinds of office visits, prescriptions, or other care. You pay these at the time of service.
- Deductibles you pay before your insurance kicks in.
- Co-insurance, when your insurance company covers only a portion of your medical bill (say 80%), with you on the hook for the rest even though you have health insurance. I know, it stinks.
- Out-of-pocket maximums mean the insurance company actually starts picking up all costs – once you’ve spent that amount.
Your best defense? Run the numbers, then run them again. Insurance companies are trying to sell you something, remember.
For instance, look at HDHPs. Most folks see “high-” anything to do with money and run for the hills. But this is where running numbers looms big. HDHPs usually have lower premiums and lower co-insurance. Figure that out for each pay period (that’s when you’ll fork over your premiums) and for the number of actual doctor visits.
These plans offer tax-friendly Health Savings Accounts, too – your money to keep and grow that might even get matched by your employer (unlike Flexible Spending Accounts – a different animal altogether).
So, you could actually wind up ahead with a plan that looks more expensive.
That just proves you’ve got a brain in your head.
That pretty folder the insurance company gave you with the fancy charts and the bullet points probably doesn’t tell you all you need to know to pick a plan. If you get health insurance through your job, your HR department can field questions you may have about how to choose the right health insurance plan. As can the insurance company.
(Ask about the “Evidence of Coverage” details for how a plan works. These can be hard to get unless you’re enrolled, but some states say the insurance company has to give it to you.)
We wish such a big decision was easier, but you can work this out.
If we can help, let us know:
Stay well out there,
Emelia Mensa EA, CPA