By Jill Schlesinger
Tribune Content Agency
Just in time for the upcoming benefit enrollment period, the Kaiser Family Foundation has released its annual survey of employer health plans, which cover more than half of the non-elderly population, or 147 million people.
Costs are up 4 percent in 2015 from a year ago. That may seem modest, but it's still twice the pace of inflation and more than the average wage gains for most families. A family plan now costs $17,545, of which workers pay $4,955. That's up 83 percent from a decade ago and up 24 percent since 2010. Deductibles are also higher - on average now they are $1,077 per individual, up 67 percent from just five years ago and 255 percent over the past decade!
With more of the cost burden shifting to you, the consumer, it is imperative that you take control of your health care decisions. Start by figuring out what each plan covers, how much it costs (premiums plus out of pocket costs for deductibles, coinsurance and copays) and whether your preferred doctors are in the network.
The most widely used plans are health maintenance organizations (HMOs) and preferred provider organizations (PPOs). In an HMO, you select a primary care physician, who directs your health care decisions and makes any necessary referrals. In most cases, the plan will not cover care outside the network. A PPO provides more flexibility, because you can see any health care professional without a referral, either inside or outside of your network. The enhanced choice comes with a heftier price tag.
Many large employers are offering high-deductible health plans (HDHP), which offer lower premiums. These plans are usually paired with health savings accounts (HSAs), which allow you to set aside pretax money to pay for unreimbursed costs. If you're generally healthy and want to save for future health care expenses, this may be an attractive choice. But if you think you might need expensive medical care in the next year and would find it hard to meet a high deductible, it might not be your best option.
Another way to pay for health care costs with pretax dollars is a flexible spending account. Health FSAs are set up through your employer and have an annual contribution limit of $2,550. You can carry over up to $500 of unused balances to the following year, but you will lose other unused funds.
Although most health care providers are mindful about limiting patient costs, it doesn't hurt to ask whether a generic/cheaper version of a prescription drug exists and whether the test/procedure/prescription is really necessary. And, of course, it is important to check every medical bill for coding errors.
I should also mention that Medicare open enrollment begins October 15 and runs through December 7. This is the only opportunity for people currently in Medicare Advantage and Prescription Drug plans to switch to a new plan for the following year.
While most Medigap supplement policies can be switched throughout the year, Schererville, Ind.-based financial planner Greg Hammer notes: "Your initial enrollment is the one opportunity to enroll on a guaranteed basis. If you want to enroll in a traditional Medigap policy later in the year, you will be subject to medical questions, and your medical history could prevent you from qualifying for the traditional plan."
And just as employees need to read the fine print, so do retirees who are selecting prescription drug plans. Hammer advises: "Your decision should not be driven by premium alone. Because of the differences in formularies and tier coverage, you need to look at your out-of-pocket cost. A lower premium doesn't always result in the lowest out-of-pocket cost." He recommends that, before making the decision, participants should use Medicare.gov, where they can enter their prescriptions and zip code and be guided to the best program for their needs.
Contact Jill Schlesinger, senior business analyst for CBS News, at askjill@JillonMoney.com.
(c) 2015 JILL SCHLESINGER
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This article was printed in the November 29, 2015 - December 12, 2015 edition.