Open Enrollment — 5 Tips in Selecting Your Health Insurance Plan

4 min readSep 1, 2015

Health insurance decisions can be a little confusing, maybe even difficult, and today’s decision support tools do not capture everything you need to know

Open enrollment is almost here, which means you have some decisions ahead of you. By now you have probably heard about about many of the recent changes in health insurance, whether it is what’s happening with health exchanges set up under the Affordable Care Act (“Obamacare”), the rise of High Deductible Health Plans (HDHP’s) or the double digit increases in prescription medicine expenses.

Take your pick, it isn’t like it used to be.

Further, while health insurance is a big decision for many, few make changes to last year’s decisions during open enrollment. This can be a costly mistake. The combination of health insurance expenses and retirement savings contributions can often equal 15% or more of a family’s monthly budget. Further, open enrollment decisions — savings commitments, in particular — can have a significant impact on quality of life later down the road.

Fortunately, making the most of both is not as difficult as it may seem. Below are five tips on selecting the best health insurance plan during enrollment season.

1. Determine what you need. Health insurance is like any other insurance, often with lots of options that can cost you more, or less. For instance, you may need a certain hospital in your network, or you might not. Generally speaking, the less provider coverage you need (referred to as “narrow networks” in the industry) the less expensive the plan.

2. Review the plan specifics. Compare the monthly premiums, co-pay, deductible, out of pocket maximums and provider coverage, both in and out of network options, including geographic restrictions. Again, the more flexibility you want with your doctors and hospitals, as well as lower deductibles and out of pocket amounts, the more you will pay in monthly premiums. Many people “over-insure” by purchasing networks and features they do not need. Know what you are buying.

3. Compare the “all-in” costs across plans. Use an online calculator like this one or one provider by your employer to consider the total costs you may be responsible for. Be aware that because of ongoing health provider consolidations your current doctor and closest hospital may no longer be in your current plan. Your prescription drug benefits may change. These details are often not be reflected by the calculators, so recognize their limitations.

4. Don’t overlook the other potential savings in High Deductible Health Plans (HDHP’s). Many people immediately see the premium discounts in HDHP’s compared with traditional PPOs (Preferred Provider plans) but are turned off by the potential for high out of pocket costs. $3,000 annual deductibles can feel scary, but if you are savings $150 each month you’ll save your annual deductible in a little over a year. As importantly, most people overlook the tax savings available through health savings account. Unfortunately, health plan comparison websites and selection tools ignore the economic value of this benefit. The tax savings with health savings accounts and the potential to build significant account balances tax free for retirement can be worth hundreds of dollars a month, sometimes far more than the difference between plans.

5. Take advantage of the incentive programs. Whether it is contributions to your flexible spending account (FSA) — recall you may have one FSA for health, another FSA for childcare and a third FSA for transportation — your health savings account, where you may also be eligible to participate in a limited purposes FSA for vision and dental, or simply participating in your wellness incentive programs, there are often significant savings available through making the right benefit elections. Don’t stop simply with your health plan selection, you may have more money available.

Open enrollment can feel like a test back in high school, one you might not have prepared for. However, by keeping a few concepts in mind you can be confident you are making the right decisions for both next year’s coverage as well as long term financial security.

Thanks for reading. Comments and suggestions for other topics welcome.

Below are a few other posts on health:

· “The Future of Healthcare is Now: My Teladoc Story”

· “Why I Questioned My Surgeon’s Advice. And Glad I Did”

· “Healthcare’s New Model: Pandora, Digital Ads, and Consumerism?”

· “Mobile Health Apps: One Parent’s Maiden Voyage with First Derm”

· “Is Blood Testing The Next Thing? Is Mark Cuban Right (Again)?

And here are my reviews of popular book titles in the health space:

· Dr. Eric Topol’s “The Patient Will See You Now: The Future of Medicine is in Your Hands” here.

· Steven Brill’s “America’s Bitter Pill: Money, Politics, Backroom Deals and the Fight to Fix Our Broken Healthcare System” here.

· Athenahealth Co-Founder and CEO, Jonathan Bush, “Where Does It Hurt: An Entrepreneur’s Guide to Fixing Health Care” here.

· Dr. Marty Makary’s “Unaccountable: What Hospitals Won’t Tell You and How Transparency Can Revolutionize Healthcare” here.