Understanding Insurance Open Enrollment

On December 7, 2013, open enrollment season ended for Medicare. This is a period of time that comes around once a year, when everyone currently receiving Medicare benefits is asked to review the coverage they have to see if it is the best option for their situation. If a change is in order, they are asked to make that change in preparation for the plan year beginning January 1.

For many employer sponsored plans, on the other hand, open enrollment season can be any time of year. Coincidentally, many of my clients who receive their insurance through an employer were recently in open enrollment season too, and asked me to do the following:

  • Assess what they currently had for insurance
  • Review the differences in the other plans offered to them
  • Help them select the best option, considering the level of insurance coverage they needed and the associated cost

This year, and thanks to the enactment of the Affordable Care Act, I also received many requests for assistance from people who had individual health insurance policies – that is, those they bought directly from an insurance company without an employer intermediary. These individuals were self-employed, owned small businesses or had stopped working but were not yet eligible for Medicare. I am happy to say that thanks to the new law, several of my clients were able to avail themselves of much more comprehensive plans at a reduced cost.

As I worked on each of these projects, I realized that there are some common items to understand and consider – no matter where your insurance is generated from:

  • Plan years vary. This is the date the insurance plan begins and ends. With a few exceptions, it is not possible to make a change mid-plan year.

    Therefore, you must note when your open enrollment season begins and make changes during the outlined time frames that will go into effect at the beginning of the next plan year.For example, it your plan year begins on April 1 and runs through March 31, your open enrollment season will probably be in January or February. Any changes would then become effective April 1.

  • Understand your current coverage. I’ve learned over the years that most people don’t understand the language of the industry and therefore pay minimal attention to the benefits that are offered – until it becomes necessary to use them. When I heard the president say that if you like your plan, you can keep it, I wondered how many people actually understand what they have and whether or not they should keep it.

    For many people, it is only when something happens – they become ill with a major illness, require lots of diagnostic testing and outpatient treatment, or experience a hospitalization – that they are forced to pay much closer attention to benefit levels. It is at these junctures that questions of coverage come into play.

    But, as I’m sure you’d agree, this is exactly the wrong time to be contending with what I affectionately refer to as “administrative barriers” to accessing care. And so it’s important to wade through those summary-of-benefits documents you get during open enrollment, to help make informed decisions.
  • Premiums are only one aspect of cost. Most people focus exclusively on monthly premiums. These matter, of course, but no more than the purchase price of a home matters in gauging the overall cost of living there. Many other factors come into play.

    In the case of health insurance, you need to consider things such as benefit levels (are benefits paid at 80%, 90%, 100%?), co-pays for doctor visits and medications, the difference between in-network and out-of-network costs, and the out-of-pocket maximum that you might be expected to pay in a given plan year.

    All of these, taken together, impact the overall cost of your healthcare.
  • Anticipate upcoming health events when possible. The status of your health and any planned healthcare-related testing or treatment should be considered when selecting a plan.For example, If you know you are having a total knee replacement in the year ahead, you should:
    • make sure your surgeon is part of your insurance company’s provider network so you can access in-network benefits
    • review the in-patient hospital benefit, knowing that you’ll be hospitalized for a few days
    • pay attention to the requirements for authorization for an in-patient admission so that you ensure coverage
    • look at the rehab benefit, both inpatient and outpatient, because such services may be in your future
    • review the home care services benefit, because physical therapy and occupational therapy will probably be needed upon discharge, either from the hospital or from a rehab facility

It’s time to learn the new language

I know, learning health insurance terminology is probably not high on your list of things to do. But it’s important if you hope to wade through the choices and trade-offs available to you each year.

You can do it! Remember to take a deep breath, ask specific questions and request that service providers use simple, understandable words when explaining options and benefits.