- Open enrollment is nearly here, and it’s important to carefully consider your health insurance options for 2020.
- With healthcare costs rising, your insurance selection can affect your finances, so looking at your plan every year is important — and can save you money.
- Whether you’re on an employer-sponsored plan or not, it’s worth looking at your policy and considering more than the cost of the monthly premium, whether your doctors and providers are covered, and any major upcoming life changes.
- Read more personal finance coverage.
Open enrollment is nearly upon us for 2020 health insurance plans. If you have employer-sponsored insurance, you’ll soon be seeing those emails asking you to review your benefits. And if you have your own coverage through the Health Insurance Marketplace, which includes Medicaid and Children’s Health Insurance Program (CHIP) plans, open enrollment begins November 1st and closes December 15th.
But before you automatically choose the same plan, or choose a new plan too quickly, know that your selection can affect your finances, especially since healthcare costs are rising.
For instance, large employers predicted that the total cost of covering health insurance for workers and their families would average $15,375 per person in 2020 — an increase of 5%, according to a 2019 survey by the National Business Group on Health. And that can affect how much workers pay.
Since medical bills are a leading cause of personal bankruptcy, ideally you can find a plan that works for you.
You may want to consider these four points (and any others for your situation), whether you’re choosing an employer-sponsored plan, applying via the marketplace, or considering joining your partner’s plan.
Look beyond the monthly premium
A low monthly premium isn’t necessarily the best predictor of a plan’s ultimate cost.
For instance, if the premium is low but the deductible (the amount you pay before the plan starts to pay expenses) is high, out-of-pocket costs may be more than you’d think. And with 58% of Americans having less than $1,000 in a savings account, according to one survey, these costs could put you in a financial pit.
The bottom line: Review the summary of benefits and consider the entire plan — including coverage for things like lab tests, prescriptions, and hospitalizations — and any deductible. Then evaluate costs overall.
Think about your health and lifestyle
Have you been putting off a surgery or some other health visit? See if a plan change can help.
“The first thing that I would do is make a list of all the things you’re going to need for the next year,” advises Brian Zimmerman, owner of BZI Group, an independent investment and insurance firm in Deptford, New Jersey.
Since insurance plans can have limits (say, for the number of physical therapy visits), read the fine print. If you need dental or vision coverage, find out if they’re covered.
And for you adventurous types: If you’re planning to try active sports or some other high-intensity activity, think ahead, says Alexandra Wilson, CFP and financial coach at SmartPath in Atlanta.
Even if you’re not planning to need health care, she adds, consider your “lifestyle and lifestyle changes and how that could impact your needs.” If you can find a plan that covers more of your needs, that could mean less money out-of-pocket if an accident or health issue happens.
Consider your family size and life changes
Are you planning to expand your family? Is it even a possibility? Examine your plan. The average cost to have a baby can run into the thousands, and health insurance can vary in how much of the costs you’d share.
Consider reviewing your options (including those that your partner may have) and decide which plan best suits your situation.
If you have older children, you also can evaluate plans to see which has the best coverage for your needs. Even if you have an employer-sponsored plan, if you’re paying for a spouse and children, this can get expensive, notes Zimmerman. “If that’s the case, you should definitely shop around to see if there’s better coverage for less money,” he advises.
Review your providers
Insurance won’t help if your providers don’t accept it. So if you have a favorite or critical provider, or if you (or anyone covered by the plan) has been referred to someone new, check on whether that provider participates with your plan.
Consider your income
If your income has decreased, or will, check to see if you’ll be eligible for Medicaid, which can have nominal cost-sharing for services, or a tax credit or other savings through the Health Insurance Marketplace. Visit healthcare.gov to learn more.
Also, if you have certain disabilities or will be age 65 or older, you may want to see if you’ll be eligible for Medicare. That said, in general, if you ever have a life-changing event (like a marriage or divorce, having a baby, or losing health coverage), you can apply for benefits outside of open enrollment.