- The Washington Times - Monday, November 7, 2005

Q: How do I choose a health plan?

A: Fall is the season for selecting a health plan for the next year, and this enrollment period should be especially challenging for consumers as more employers offer a relatively new product.

First and foremost, experts advise that consumers learn as much as possible about all their options and set aside time to compare and contrast plans. Experts note that most people don’t take the choice seriously enough — a mistake that can have serious financial repercussions.

“Most people spend more time picking out an appliance or planning a vacation than they do picking a health plan,” said Jennifer Murphy, health care communications leader at Hewitt Associates, a consulting firm.

This year, more employers will be offering what are called consumer-driven plans. Designed to help reduce health care costs, the plans provide employees with a set amount of money to pay for health needs. Once the fund is exhausted, a deductible sets in. When the deductible is passed, a traditional plan kicks in. These plans typically have lower premiums than more traditional options but the deductibles are also higher.

Miss Murphy said customers should look at how much they spent on health care this year and how they used the plan as a guide to a selection for 2006. Do you use the plan primarily for basic checkups and preventive care? Do you or someone in your family have a chronic condition that requires numerous doctor visits and multiple prescription drugs?

With that in mind, look at the various premiums, copayments for doctor visits and prescription drugs and deductibles to get an idea of what your out-of-pocket costs would be.

Someone who spent a lot of money on health care might not want a consumer-driven plan because of the high deductibles. People who value flexibility in choosing their doctors or hospitals might not want to join a plan with a limited number of providers and significant out-of-network costs, even though the premiums may be lower than other options with a broader selection of providers and lower out-of-network costs.

“The cheapest option isn’t always the best option,” said Jerry Ripperger, director of consumer health for the Principal Financial Group, which offers various financial products and services including life and health insurance.

Health plans have a maximum annual amount that consumers have to spend in copayments and coinsurance before catastrophic coverage begins, typically triggered by a serious medical problem. That catastrophic coverage then picks up most of the health care costs. Learn what your maximum is and compare it to your savings, Mr. Ripperger said. A plan that requires consumers to pay $10,000 in out-of-pocket costs could be a financial disaster for a family with only $5,000 in savings. Medical emergencies are one of the top reasons people file for personal bankruptcy.

“I would want to know what happens if I get hit by a bus,” Mr. Ripperger said. He said it might be worth paying more for a plan with a low out-of-pocket maximum.

Some employers have software that allows workers to gice information about their health spending and needs and then prints out the plans that may be most appropriate. Ask whether your employer provides such tools. If not, and you are really confused, don’t be afraid to contact human resources for help, specialists say.

ASSOCIATED PRESS

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