Choosing A Health Care Plan
As we prepare for the season of Thanksgiving, this is also the time of year that many employers offer open enrollment of benefits for employees. A major expense that most of us have whether employed or self-employed is health care costs. Life is filled with unexpected events, and you simply can’t plan for them all, but please listen to me when I tell you that exorbitant medical costs can bankrupt you. I’ve heard many people say, “I can’t afford insurance.” I recently selected my benefits and was quite frustrated with the amount it costs to insure a family, but I also know the risk associated with choosing not to do so. If you are in the process of reviewing your health care plan, the following tips may help you through the process:
- Identify anticipated medical expenses for the upcoming plan year. Are you planning to expand your family, or is there a medical procedure that you’ve been putting off that you can no longer delay? The answers to these questions are very important as you review your health care options.
- Review your current year medical claims. Unless you had extenuating circumstances or a one-time medical procedure, your current year claims may be a good indicator of the coming year expenses. This should be a significant consideration as you compare health care plans.
- Compare each plan’s deductible. How much can you afford to pay out of pocket? One of the worst things that you can do is carry medical insurance but be afraid to use it because you can’t afford the deductible. In order to obtain a deductible that you can afford, you may have to pay a bit more in premiums. Medical insurance premiums in most instances are a pre-tax deduction. This means it reduces the amount of taxes you’re required to pay. That being said, while you evaluate the costs before taxes, it’s also important to consider the after tax expense because this is really the best way to evaluate your out of pocket costs.
- Review the list of in–network providers. If you’ve developed a rapport with your doctor, you will want to ensure that your physician is considered in-network for any plan you select. It can be difficult to find a doctor that you are comfortable with. Don’t underestimate the importance of this relationship. After all, it is your health we’re talking about.
- Evaluate the Prescription Drug Plan. Are you or anyone in your family on any maintenance drugs? In other words, does anyone covered under your plan have prescription drugs that they are required to take on a regular basis? Your co-pay associated with your prescriptions should be factored into your decision when selecting your plan.
I hope this list of considerations will help you as you evaluate your options. In addition to selecting your health care plan, don’t forget to review your options for your Health Care Flex Spending Account. A Health Care Flex Spending Account allows you to set aside a portion of your income pre-tax for eligible medical expenses; this is a great way to help cover out of pocket medical expenses. One word of caution though – only set aside a dollar amount that you know you’ll use in your Health Care Flex Spending Account because if you don’t use it by the end of the plan year, you lose it. Next week, I will continue to discuss health care by taking a look at prescription drug plans for individuals that have Medicare benefits. Stay tuned, and make your week great!
Knowledge Hoop 