Open enrollment season is underway: The Affordable Care Act health insurance exchanges will close on January 15, 2022, and Medicare open enrollment wraps up on December 7. November is also when many companies let workers make health insurance and other benefit decisions for the upcoming calendar year.
It's not an easy undertaking. One in three millennials and Gen Zers say they have made a mistake during a prior open enrollment, according to a new survey from ValuePenguin of nearly 1,800 Americans. The most common errors among all respondents were not exploring their options (28%), and missing the enrollment deadline (26%).
Picking the right plan can save you money and ensure you have the coverage you need. "It's really important for you to look and decide based on how you use health care," says physician-turned-financial-advisor Carolyn McClanahan, a CFP and the founder of Life Planning Partners in Jacksonville, Florida.
Here are three questions McClanahan and other doctors recommend asking yourself when choosing a 2022 health insurance plan.
Whether you're switching plans or not, check that your current doctors accept that insurance, says Dr. Davis Liu, chief clinical officer at Lemonaid Health, and the author of "The Thrifty Patient." It's important to know if your doctors are in network or not. Being in network means the medical professional you're seeing has agreed to accept the insurance company's approved amount for their services.
The easiest way to find out: Pick up the phone and ask. This can make a big difference in the cost of your future care.
Review each potential plan's coverage related to any current or ongoing health conditions, says Liu. What treatments and prescriptions are covered can vary, and so can the costs.
One of the difficulties with choosing the right health insurance is understanding the terminology. The majority of plans fall into two categories:
- HMO plans, which stands for health maintenance organizations. With an HMO, you have to see your primary care doctor in order to get a referral for a specialist. HMOs often get a "bad rap," Liu says, but they tend to have lower premiums, and your primary care provider may be able to treat your issue without sending you to someone else.
- PPO plans, short for preferred provider organizations, offer more flexibility. With a PPO, you can see a specialist without a referral. The downside is that these plans tend to be more expensive.
Insurance plans are often categorized as either "pay now" or "pay later." Pay later plans are often known as high-deductible plans. You'll save with a cheaper monthly premium compared to "pay now" plans, but when you do have to pay, costs are higher, Liu says. The deductible, or the portion you pay before coverage kicks in, is higher, and so is your annual out-of-pocket maximum.
Users of high-deductible plans "have to understand they're on the hook for that annual deductible if they get into a bad accident or something," he says. "Understand that trade-off."
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If you don't have the ability to pay a high deductible and you see doctors a fair amount, a traditional copay plan, or a pay now plan, is probably preferable, McClanahan says.
While you're comparing plans, there's a free resource you can use to make sure the plan you're getting is well rated. To get a report card on potential health-care plans, Liu recommends the National Committee of Quality Assurance website NCQA.org. The site is updated monthly and, according to the organization's website, offers a "detailed assessment of insurers' structure, process, performance and consumer satisfaction."
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