A Personalized Approach to Your Insurance Needs
Three Mistakes To Avoid When Choosing A Health Plan?
Common Questions

1. Choosing A Health Plan Based Solely on Premium


In my years of enrolling individuals and families into health care plans, I have seen a good number of folks choose a plan based solely on premium.  “I never get sick, and I hardly go to the doctor” I’m often told by those who choose the lowest-cost plans. There is nothing wrong with selecting a low-cost plan, after all, we all try to save money wherever possible, right?  However, choosing a plan based solely on premium is like gambling at the roulette table.  You spin the roulette and hope that the marble lands on your number.  Well, if you’re betting on just one number, what are the odds of that happening?  The answer is 35:1.   


When you select a plan based solely on its low monthly premiums, you will have more out-of-pocket costs when you obtain medical care.  See, a low premium plan will have higher deductibles (the amount you must pay before the insurance company starts paying), higher co-insurance (the difference between what the insurance pays, higher out-of-pocket (the maximum amount that you will be required to pay for services in any one year period), and the total invoiced amount) and higher co-pays (a pre-determined set amount for a specific service).  Co-pays will have to be paid over and above your deductible until you reach you max-out-of-pocket.


If you are a healthy individual who does not get sick often, you may be able to do just fine with a low premium plan.  However, if you have a catastrophic event or even a minor mishap that lands you in the hospital, you will end up paying all that money you saved on premiums and then some.  In cases like this, a higher premium with lower deductibles, lower cost-sharing, lower co-pays and lower max-out-of-pocket could save you money in the long run. 


2. Wrongly Assessing Your Health Care Needs


Do you have a history of recurring joint pain?  Are you diabetic?  Do you have high cholesterol? How many times did you visit your doctor last week, last month, last 6 months, last year?  These are questions that you should be asking yourselves and providing accurate answers as well.  It is essential to doing a proper assessment of your health care needs when selecting a health care plan.  No one can look into the future and see exactly what medical care will be needed in the year to come.  However, last year’s costs are a good indicator of future expenses.


Once you’ve determined what was spent in the last 12 months, consider what could change in the next following months.  What changes can you expect in the next 12 months?  Were you or anybody else in the family diagnosed with a new health condition which will require additional visits to the doctor, possible ER, and/or new drugs?  Are these new drugs covered by the current plan and will they be covered under next year’s plan?  Talk to your doctors and ask them to provide you with as much information as possible to better assess your health care needs.  Your doctors should be able to tell you approximately how many times you will need to be seen in the next 12 months and the drugs that you will most likely be prescribed.  Don’t choose a health care random; know your needs before you choose.


1. Automatically Re-Enrolling Into The Same Plan


Every year during open enrollment (currently Nov 1st thru Jan 31st) we have the option of staying with the same carrier and the same health care plan or switching to a different plan and/or a different carrier.  However, most people make the mistake of automatically re-enrolling into the same plan.  Why is that?  These are some of the reasons my clients have given me:


  • Plans are complicated and doing the research takes too much time.

  • I want to continue with the same doctor I have now

  • My premiums are paid automatically by my bank and I don’t want to change that

  • I was re-enrolled without my knowledge


Let’s address each one of these reasons:


Plans are complicated and doing the research takes too much time – Yes, plans are complicated and doing the research does take time.  However, many a times you can get the information you need by giving your insurance agent a call or by visiting him/her in person.  If you don’t have an agent, I suggest that you obtain one.  Agents do not charge you any fees (they shouldn’t anyway) for their services. Agents are paid by the carriers to help and service member accounts.  Don’t spend hours researching plans to determine which is the best one for you.  The easiest way is to talk to your agent. Let him/her know exactly what you need and let him suggest a few plans that will work for you and could possibly save you money?


I want to continue with the same doctor I have now – Doctors accept different health care plans, not just one.  For example: Dr. Jones accepts Blue Shield, Anthem, Cigna, Aetna, and Health Net.   The cost for each of those plans is not the same; some are more expensive than others but you can see Dr. Jones with any of these plans.  Furthermore, Dr. Jones can decide to stop working/accepting any of these plans at any time, without notifying his patients.  So, automatically enrolling into the same plan does not guarantee that you will continue to see Dr. Jones.


My premiums are paid automatically through my bank and I don’t want to change that ~ Switching payees at your bank is one of the easiest things to accomplish.  If you have online banking, you can log into your account and update any payee who is currently receiving automatic payments.  You can cancel, stop, and re-start payments to any payee on you list of payees.  If you are not computer literate or if you don’t feel confident doing it yourself, just visit your local branch and a bank rep should be able to set that up.


I was re-enrolled without my knowledge – Every year, prior to open enrollment, carriers mail out letters to their subscribers notifying them of their intent to re-enroll them into next year’s plan.  The letter contains next year’s plan name, the new premium, and relevant information that the subscriber needs.  If the subscriber does not respond to this notice and does nothing, the subscriber will be re-enrolled.  However, if the subscriber enrolls in a new plan, the subscriber should notify the current health care plan that they do not wish to re-enroll for the following year.  So, stay alert and watch your mail for the re-enrollment notification.