By Emily Brown, Patient Education Content & Project Manager, Patient Advocate Foundation
Health insurance helps you reduce the cost of your care, while also covering other services that can help you stay healthy. Each year when it’s time to make that critical decision on which plan to enroll in, don’t just go with the status quo. Plans can change dramatically from year to year, and you’ll want to be familiar with any changes or differences between them to make sure you have the coverage you need for the new plan year.
Know When You Can Enroll
Open enrollment is the time when consumers can sign up or make changes to their health insurance coverage each year. Once this period ends, you must wait until the next annual enrollment period to make coverage changes, unless you have a qualifying life event. Qualifying events include marriage, divorce, a new baby, moving to another state, etc.
Many commercial insurance companies are implementing open enrollment periods that match state marketplace periods, generally occurring in the fall in advance of the next calendar year. Employer-based plans can choose their open enrollment period at any point during the year, and some insurance types allow enrollment throughout the year, so it’s important to know when your open enrollment occurs.
Every insurance plan prepares their list of benefits on a standard form, called a Summary of Benefits and Coverage, which you can use to compare benefits between plans side-by-side. If you are not presented a full copy of the summary before enrollment, you can find these online or ask the insurer to send one to you. Be organized and take your time. Pay attention to the fine print and read carefully. Don’t be shy if you have questions—open enrollment is the time to ask.
In addition to total cost, there could be other special considerations that matter to you. For example, you may have a preferred pharmacy or opt to receive prescriptions by mail. Or, you may wish to consider plans that have fewer rules for step therapy or require use of generics before name brand drugs. If you travel often, you may need a plan with more coverage for out-of-network providers or that allow you to see doctors without referrals. Today, most commercial plans offer essential health benefits which include services for counseling or education for a healthy diet, and help with smoking cessation, alcohol abuse, or depression. Some may even offer extra incentives if you participate in prevention activities during the plan year.
There are the out-of-pocket costs or cost-sharing amounts that you will pay. To help you estimate these costs, make a list of recurring medical expenses, including medicines, check-ups, physical therapy, and other procedures that can be planned. It’s worthwhile to review your “Explanation of Benefits” statements and overall medical costs. These records will help you to anticipate and better estimate potential costs during the enrollment period when choosing a plan.
The formulary (drug list) sorts medications into tiers. The tier placement determines how much you must pay for the medication. Most plans have four or five tiers, with “preferred” and “non-preferred” groups designed to encourage you to choose less expensive medications. The higher the tier, the higher your costs will be. “Specialty drugs” tend to be the most expensive and may require you to have tried other options first. Compare which tiers your medications fall into on the different plans you are considering, and choose the one that maximizes your benefits and gives you the most overall savings.
Many people with a chronic disease take multiple medications to manage their condition and prevent other complications. Check the formulary to see that medicines you need are included but be aware the formulary can change during the plan year—drugs can be removed or added with or without restrictions, and coverage levels may change throughout the year as well. If the drug is not listed on the formulary, the insurance company will not pay anything towards its cost.
Insurance companies negotiate service costs with providers each year to get the best rates. That’s why visits to out-of-network providers can be very costly. Always make sure your favorite doctors and hospitals are part of the network. (It is always a good idea to check with the provider, too.) Remember that you may see changes as doctors and hospitals are dropped or added to the network during the year.
A lot of health insurance companies are now offering high-deductible health plans (HDHP), which offer a much lower monthly premium payment in exchange for a higher annual deductible which you must pay before insurance will pay their portion. To help offset the cost of a HDHP, you can open a health savings account (HSA). This type of account is only open to those enrolled in HDHPs and offers a tax-advantaged way to save for healthcare costs.
Be sure to pay close attention when open enrollment comes along—you don’t want to get stuck in a plan all year that won’t meet your needs.
Patient Advocate Foundation (PAF) is a national 501(c)3 nonprofit organization that provides case management services and financial aid to Americans with chronic, life-threatening, and debilitating illnesses. PAF was founded in 1996 by Nancy Davenport-Ennis and Jack Ennis to help address the issues faced by patients like their friend Cheryl Grimmel who had to battle not only her breast cancer but for access to affordable treatments. In PAF’s first year, a staff of two provided case management assistance to 157 patients with barriers to prescribed care. Fast-forward to 2019, we’ve helped a cumulative total of more than 1.2 million patients nationwide.