Do your homework before selecting a health care plan

PERSONAL FINANCE

October 05, 2003|By EILEEN AMBROSE

OPEN ENROLLMENT is here again, the time when many workers are called upon to wade through thick information packets and expected to choose a health care plan.

It's not easy reading. Doctors and hospitals are called providers. Terms like co-payments, co-insurance and deductibles are another way of the employer saying, "That's what comes out of your pocket."

The decision can be difficult. It requires workers to predict their own health care needs for the next year, and that of any family member covered under the plan.

"It is very hard. Even those of us doing it for a living find it very hard to navigate the terms of our own policies," said Kathleen Stoll, director of health policy for Families USA, a health care consumer advocacy group.

Still, it's well worth the time to slog through the information - even if you're happy with your current plan - because there are likely to be changes as employers grapple with the rapidly rising costs of health care.

This year, workplace premiums rose 13.9 percent, the third year in a row of double-digit percentage increases, according to a study by Kaiser Family Foundation. Employers say they have been passing higher costs on to workers, and expect to do the same next year.

Not only can workers expect higher premiums, but they likely will be asked to shoulder a bigger share of other medical costs.

"You may have less choice," said Jonathan Weiner, professor of health policy and management at the Johns Hopkins Bloomberg School of Public Health in Baltimore. "Most [employers] want to provide health care coverage, but they are trying to find the sweet spot between good benefits and affordable service."

If it's any consolation, employers are still bearing the brunt of the costs. The typical policy covering a family costs $9,068, and employers pick up 73 percent of that, according to Kaiser.

One of the first steps to choosing a plan is understanding your options.

Rare are the old-fashioned indemnity plans that put no limits on your choice of doctors, specialists and hospitals.

A likely option is a health maintenance organization where workers must choose a primary care physician from a network of doctors and bear all the costs of seeing a doctor outside the plan.

Other frequent options include a preferred-provider organization and a point-of-service, a type of HMO, where in both cases workers can visit doctors outside the plan's network, although they will pick up more of the tab than if they stayed inside the network.

A newer option that workers might hear more about in time is a consumer-driven health plan, which tries to get workers to be better shoppers of health care services. One of the causes of skyrocketing health care is that consumers don't know the true cost, Weiner said.

For example, if a doctor suggests a $1,500 test that's fully covered by insurance, you're likely to say, "Why not?" said Weiner. But if you're buying a car and an add-on costs $1,500, "rest assured you would think very carefully about the cost benefit," he said.

That's what consumer-driven plans try to get workers to think about. Plans vary, but generally workers each year are given a certain amount of money in an account, say, $1,000 for a single person, that they can spend on health care, experts said. In some cases, check-ups, mammograms or other preventive care might be fully covered at no cost to workers.

If they don't use up the money, it can often be carried forward for future medical costs.

But if workers use up the account's money during the year, they will be responsible for any additional costs up to a certain point, say $1,000 or $2,000. After that, insurance kicks in, working like any other HMO or PPO plan, Stoll said.

One concern is that the plans will attract only healthy workers who don't spend much on medical care, leaving those with chronic ailments under other plans whose premiums would likely shoot up, Weiner said.

Other factors to weigh when choosing a plan:

Health care needs. As much as possible, try to predict what medical care you expect for the coming year and compare how you would fare under each plan. More companies offer online programs that make cost comparisons for workers.

If you have a chronic condition, for example, how will that be covered under each plan? Some plans offer "disease management," where professionals help workers with preventive care in dealing with a chronic ailment, experts said.

Some plans are dropping coverage for certain drugs, so if you take regular medication see if it's covered, experts said.

Doctors. Of course, for many people the key concern is whether their doctor is in the plan's network.

Confirm that your doctor will be in the plan next year, said Tom Billet, a senior consultant with Watson Wyatt Worldwide in Connecticut. Physicians' contracts often change in January, and printed and online directories of plan doctors can be inaccurate, he said. If a doctor isn't in the plan, find out how much more you will have to pay to visit him or her, Stoll said.

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