Open Enrollment? Credit Counseling Pros Advise to Roll Up Your Sleeves and Dig In!

We know what you’re thinking: It would be easier to ignore this gigantic pile of forms and doctor directories. Why not just do nothing? Keep your insurance as it is and maybe it will take care of itself.

At our Consumer Credit Counseling Service (CCCS) agency, our debt management professionals recommend another approach: When you hear the words “open enrollment,” that means it’s time to roll up your sleeves and get to work. There may be savings opportunities lurking in that frightening stack!

Did you know that 16% of Americans have no health insurance? That figure may not sound too high, but it amounts to 47 million people – nearly a million in every state! So, if you’re hearing the words Open Enrollment, it means not only that you have health coverage but that you’re among the most fortunate of all: You’re participating in an employer-sponsored plan.

Of course, the majority of Americans are also within this group. Some 60% of us purchase coverage through our employers. Still, it’s something that many take for granted. But we shouldn’t! For one, there are financial planning and household budgeting opportunities available during Open Enrollment season. The debt management professionals at our Consumer Credit Counseling Service (CCCS) agency provide some useful things to know when it comes to insurance coverage plans:

Let’s Learn a Few Useful Initials!

To begin, let’s review three insurance terms you’ve probably heard before but may not have compared in the past. Have a look:

POS. We’ll begin with the Point of Service plan. It’s the most straightforward, and likely most expensive, option available to many employees. That’s because it works like this: You simply visit any doctor you want. Sounds great, of course. However, as stated, the cost for such convenience lies in higher premiums. And actually, it’s a bit more complicated than described here. For starters, there may be reimbursement paperwork to fill out.

HMO. This is probably the most common term we’ll look at in this article. Health Maintenance Organizations are fairly commonplace in this country. When you sign up with an HMO, you must select a primary care physician. This is your main contact with the system for all services. As such, you’ll need to obtain approval from your primary care physician before being referred to any specialists (who are also almost always in-network). Likewise, you will likely require precertification (from your doctor or your plan) for any necessary hospitalizations. While the HMOs take care of the insurance claims, you will face additional out-of-pocket costs if you visit physicians or healthcare service providers that are outside of the HMO network.

PPO. Finally, let’s look at Preferred Provider Organizations. These are popular because they allow members to seek services from physicians outside of the network. As expected, in-network physicians (the “preferred providers”) offer preferred rates for PPO members. However, while seeing an out-of-network physician or specialist might cost you more out-of-pocket, many people opt for this type of plan for the increased flexibility.

So, now that you’ve been educated on the major types of plans out there, let’s move on to some plan specifics. These will help you match your needs with the most appropriate plan.

Weigh Plan Features Side-by-Side

Now it’s time for you to examine specific coverage features of each plan. Even if your employer offers only one plan, it’s still important to understand your benefits. So, take some time to consider the following questions. As you do, think about whether you may be affected by them.

• What steps do you need to take to receive care? Will you be able to receive prompt care?
• Could you keep your regular doctor if you switched?
• Do you have a preferred location for receiving care (e.g. a local doctor's office)? If so, is that doctor in your plan's network?
• Does the plan cover immunizations, regular physicals, mammograms, and other routine visits?
• How do you go about seeing a specialist? What are the costs involved?
• When would you need to get preapproval or precertification for services?
• Do you have any chronic conditions that will definitely incur costs in the coming year (things like diabetes, heart disease, and asthma)?
• What about preexisting conditions (things you’re already seeing a doctor for and expect to continue over the near-term)?
• Do you envision any significant life changes in the coming year (e.g. retirement, marriage, pregnancy, etc.)?
• What are the costs for lab work?
• Which drugs are covered by the plan's prescription formulary? Do you anticipate needing prescription meds next year?
• Does the plan cover physical therapy and other specialized services?
• Are vision and dental offered? If so, what are the features and premiums for those plans?
• Are psychiatrists and psychologists included?
• How about chiropractors, acupuncturists, and massage therapists?
• Have you reviewed a listing of the plan's exclusions and limitations?
• Will you need to submit your own paperwork for insurance claims?

Obviously, we can’t list every nuance of every plan here. But, make a list of your healthcare priorities as you’re reviewing the plan documents and compare features and costs if you’re thinking of switching.

What’s It Going to Run Me?

This is an area of expertise for the debt management professionals at our Consumer Credit Counseling Service (CCCS) agency. Because health care represents such a major portion of the average household’s budget, it’s important to crunch the numbers from time to time in search of savings opportunities. Of course, this must be done with your peace of mind as a priority as well.

For any plan you’re considering, you’re naturally going to want to place a lot of consideration on the premiums themselves. After all, if you’re 100% well for the next year, you’re still going to have to pay the premiums as your base cost. So, this is a good place to begin.

Next, when considering which services you may require, take a closer look at your out-of-pocket costs – items such as copays, deductibles, and costs for prescriptions.

Here are a few further financial considerations:

• Make a side-by-side listing of premium costs.
• If considering a more expensive option, consider the new premiums in light of your household budget. Can you afford to upgrade?
• If you’re switching plans, look back at your historical out-of-pocket expenses and, under the new plan’s guidelines, try to estimate what you’ll spend next year? Did the amount change significantly? (Don’t forget to consider the difference in deductibles between plans.)
• Have you wanted to see a new doctor who isn’t in your plan’s network? If you did, what would it cost you?
• Are there any opportunities you should look at related to your spouse’s insurance? This could mean obtaining coverage for yourself and/or your children through your spouse’s plan instead of yours? Also consider the reverse scenario (placing your spouse and/or children under your plan if they’re not already covered by it).
• If you anticipate new health care needs that aren’t covered by a plan you’re thinking about switching to, how will that affect your budget?
• Don’t neglect to consider annual coverage limits. Many plans have annual caps on specific services.

Time to Decide!

No one expects you to be able to predict future medical expenses. Attempting to do so is uncertain and chancy at best. But, “chance,” as Louis Pasteur once famously remarked, “favors the prepared mind.” So, congratulations… You rolled up your sleeves, dug in, and learned about your health care insurance options. Now you’re able to make the most informed decision possible.

At our CCCS agency, our credit counseling professionals routinely stress the important role that health care costs play in the household budgeting process. For those uninformed, the wrong decision about health coverage can mean financial ruin. On the other hand, it’s certainly wise to review all options available to you for cost savings opportunities.

On a related note, if your household has experienced financial hardship related to medical costs, please contact CCCS for assistance.