An Insider’s Guide to Choosing Health Benefits for Your Family

health insuranceIt’s almost that time for most people – time to choose your benefits! I’ve been working in the benefits space for 10 years now, so I have amassed some knowledge that, while immensely boring, can potentially save you lots of pain and money. So here’s a little insight into the confusing and convoluted world of benefits. I hope it makes open enrollment a bit easier.

How do I figure out what the best plan is?

There is no “best” plan or hidden gem that you need to search for. There are just variations on a theme, and those variations are:
1. Cost: All else being equal, either you pay more in premiums (the amount that comes out of your paycheck monthly), or you pay more out of pocket costs (the amount you pay when you get care). Pay more now or pay more when you go to the doctor. Plans that have higher “out-of-pocket” (pay more when you go to the doctor) costs make people think twice before getting care, which generally results in people avoiding care (both care they don’t need as well as the care they do need). Plans that cost more all around (including premiums and out-of-pocket costs) either have more coverage for care, a broader network (more choice in doctors), or both. 
2. Network: Insurance companies negotiate with doctors to get “discounted” rates, which is what they pay doctors when you get care. Doctors who they contract with are in the “network.” Often, plans either don’t cover care that you get from out-of-network doctors or hospitals, or cover a smaller part. Different plans (even from the same insurance company) can have different networks to make things more confusing. So don’t assume if your doctors accepted your UnitedHealthcare plan last year, that you can switch to another UnitedHealthcare plan and keep all your doctors. Make sure it is the same network, or that your doctors are in that network too, or that you are willing to switch doctors.
3. Coverage: Plans vary widely in what they cover, including out-of-network care, certain therapies, surgeries, etc. If you have insurance from your employer (especially a larger employer), it’s often the employer that makes those decisions, so tell your employer what’s important to you. Gender-reassignment surgery. Fertility. Birth control. Sonograms for dense breasts. But accept that when a plan covers more, costs go up for everyone.

Ok, so how do I figure out what the best plan for my family is?

First, understand what you need to have peace of mind or what you need financially.
Do you want a broad network (more choices of doctors) so you know you can go to almost anyone you want? If so, make sure you are not picking a narrow network plan. A broad network will definitely cost you more.
Do you want “first dollar coverage?” That means the plan starts covering costs from the first visit rather than after you meet your deductible. If so, make sure you don’t pick a plan with a deductible. This too, will definitely cost you more in terms of premiums. It may not cost you more in the long run, depending on how often you go to the doctor.
Do you want something more affordable, so you’re not paying a crazy amount in premiums? Go for a high deductible plan or one with a narrower network.
If you want to figure out the best (expected) deal for you, create a simple spreadsheet with your plan options listed in columns and the following rows: annual premiums, expected number of PCP visits, expected number of specialist visits, expected Rx, expected other care (hospital, etc.). Then, price it all out with the information in your benefits booklet to estimate your costs for the year. Of course, care needs are unpredictable, so do all the guessing you want, and then something like COVID comes along, and you might not see much of the doctor at all (or you may see them a whole lot).

Why is insurance so expensive?

Insurance is expensive because healthcare is expensive. Insurance covers the pool of health care costs, plus an administrative fee of roughly 15 percent, to process all that paperwork, run the call center, comply with all legal requirements, build the member portal, send you the confusing paperwork, and more. The rest goes to pay the doctors and hospitals. Yes, you are generally paying way more per year than you get, but it’s insurance. The main point is to be there for you if you ever need a lot of care and have astronomical costs, so insurance costs so much. You are helping to pay for your community and colleagues when they need it.

What’s this HSA/FSA stuff I hear about every year but still don’t understand?

An HSA (Health Savings Account) is a bank account that you can put tax-free money in (think of it as a 401k for health care expenses). It’s a smart choice because it’s tax-free, and you can roll it over from year to year, even into retirement. If you have enough money in the account, you can even invest it. Now, you can only contribute to an HSA if you are in a “high deductible health plan,” a plan with a deductible of $1,400+ for an individual or $2,800+ for a family. You can USE your HSA money no matter what kind of plan you are in. So it’s always yours and always accessible. If you’re like me, logistics are a big deterrent. If you are smart with finances, you won’t let that get in the way.
An FSA (Flexible Savings Account) is also a bank account, but the main differences between that and the HSA are: 1) you don’t have to be in a high deductible health plan to contribute to an FSA, and 2) you can’t roll it over from year to year (with some exceptions). So be careful how much you put in because it’s use it or lose it.

Why is health insurance so confusing?

Because it’s hard to know what’s covered before you get care, so you go to the doctor and hope for the best when the bill comes. You can try to call your insurance company to ask whether procedures or treatments are covered, but they will often tell you they need the specific billing codes to figure that out, and there are many multitudes of codes. Your doctor’s office will rarely give you codes because they don’t know what the doctor will do until you come (which makes sense), and many offices and hospitals hire billing specialists to figure out how to code to get the most money reimbursed. So they can’t tell you what codes they’ll charge. Until we fix that crazy system, we can only guess what we’ll pay for an office visit, but not much beyond that.
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Ruth Berkowitz lives in Scarsdale with her husband and two girls (born in 2005 and 2009), a Havanese named Scout (a Corona puppy), and beta fish, Lilly. During the day, Ruth works in marketing at a health insurance start-up. By night, when she's not driving her kids around, she plays tennis and mah jongg, volunteers for various organizations, and updates the family calendar. She immensely enjoys sitting in front of the TV with chamomile tea, an ice cream sundae, and a chewy cookie in hand.