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Get the Most from Your Employer Health Care Program

With the end of the year fast approaching, many employees are starting to become anxious. It’s that time of year again, the time when they get to tweak their health insurance benefits. While this may be exciting to some, the responsibility to choose the right health insurance plan can be a source of tension for others.

There are many reasons for this. Personal circumstance comes into play, including additions to family. Since the days when employers offered either a low-cost HMO or an expensive PPO, the maze of health insurance options has increased significantly. With health insurance costs on the rise, it’s more important than ever to make sure you are getting the most coverage for your money. 

Here are 5 mistakes to avoid in an open enrollment benefit session: 

Mistake #1- Saying No to Health Savings Accounts

Less than 20% of those given the option of opening a Health Savings Account choose to take advantage of this potentially valuable opportunity. If you break it down, these turn out to be the equivalent of free money, and can really give you a leg up towards paying for medical expenses. 

Mistake #2- Picking the Cheapest Health Insurance Premium

It’s easy to look at a low cost and choose the cheapest health insurance plan because we may think it's all we can afford. What many fail to realize, however, is that low-cost health insurance premiums often offer significantly less coverage. This could lead to big trouble in the long run if your health care needs outweigh the coverage available. 

Mistake #3- Not Doing Your Health Insurance Research 

Nine out of ten people renew their old health insurance plans for the upcoming year. This isn’t always a bad thing, such as when your needs haven’t changed and you’ve researched the available options. However, even if your health insurance needs are the same as they were last year, review the plans available to make sure that nothing has been changed on their end. Benefits and premiums may not be the same as last year, so make sure that you know exactly what you’re signing up for. 

Mistake #4- Under-Buying

Under-insuring is one of the worst mistakes you can make, as once you’ve signed into a health insurance plan, you’re locked into it either until there is a change in family demographics or open enrollment comes up again. That’s it. There’s no in between. It would be nice to think that by the time you need it, you’ll have thrown enough money into your Health Savings Account to cover the cost of the premium, but there’s no guarantee. You could find yourself paying a large sum out of pocket.

Mistake #5- Over-Buying Health Insurance Coverage 

Throwing a high premium at the possibility of a life altering health-related disaster may provide you with quite a safety net, but financially it could turn out to be an unwise move. This is not to say that choosing the cheapest health insurance plan is always the best option for an individual with a clean bill of health, as we are all at risk for accident or unexpected illness. Finding something in the middle is ofen sufficient. Consider a high deductible with a limited network to keep premium costs low while providing coverage against a major health care expense.

Yes, open enrollment can be a source of tension, but if you play it right, as most people don’t, you’ll find that next year’s open enrollment isn’t the confusing maze that some make it out to be. Open enrollment for health insurance coverage is there to give you options that can help you. Don’t pass up a good opportunity to make a smart move. 

Do you need personal health insurance, or better health insurance for your employees?

We can help. Please contact us today: 800-947-1270

Is Affordable Care Affordable, or an Incentive to Raise Health Insurance Premiums?

A section of The Affordable Care Act requires health insurance providers to spend at least 80 percent of dollars they receive from premiums on patient care, or be forced to send a rebate to patients. This may seem like a good deal for patients, but health economists say the provision can only lead to more expensive insurance.

Economists reason that the provision merely provides an incentive to raise premiums, instead of encouraging companies to control costs. While patients may be thrilled to receive a rebate in the mail, this rebate will be a small consolation for the inflated premiums patients will have to pay as insurers let spending balloon.

Health Insurance Rebates Lead to Higher Premiums

According to Peter Suderman's Hit and Run blogpost "ObamaCare's Health Insurance Rebates May Make Insurance More Expensive," insurers rebated slightly over $1 billion this year, at an average of $151 per customer, in letters that clearly stated the rebates were coming as a result of reforms made under the Obama administration. This politically sound move lets patients know exactly where their rebates are coming from. What it doesn't tell them is that the rebates might cause premiums to rise.

"It's easier to cover someone's health costs on 80 percent of $1,000 than it is on 80 percent of $100," Suderman writes, "and because insurer profits and other administrative costs must come from the remaining 20 percent, there's a larger pool from which to draw profits and business expenses." In other words, insurers will be motivated to raise their premiums in an attempt to cover expenses.

Economists Doubtful of Benefits

NPR's Planet Money reported on the likely outcomes of the insurance rebates provision. Reporter David Kestenbaum interviewed six health economists. "No one thought the provision would do much good," he said, "and several thought it could be harmful." Among the economists interviewed by Kestenbaum was Jonathan Gruber, an ObamaCare architect and supporter.

Skewed Coverage? NPR Story Differs from ABC, CBS, USA Today

The press has widely lauded the health insurance rebates. ABC News reported that the law is "aimed at holding health insurance companies accountable for how they spend the money collected through premiums." CBS and USA Today ran similar stories, equally positive about the program that would force insurance companies to spend more on patient care or send out rebates. None of the articles mentioned that premiums would likely rise as a result of the provision. NPR's Planet Money was the first news platform to explore the potential pitfalls of the rebate program, and stumbled on a major flaw: more money spent on patient care will logically result in higher premiums.

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