One of the most important considerations when choosing a health plan is your total costs for the year. By total costs, we mean how much you’ll pay in premiums (usually straight from your paycheck) and out-of-pocket costs for your care. Even though crunching the numbers is difficult (Decision Doc uses thousands of calculations!), understanding your total costs for each plan option will help you make an informed decision that protects your health and wallet.
But what should you do if you find out that multiple health plans are close in cost? How do you choose the right one?
Here’s six considerations for choosing between plans that are close in cost.
Do the health care providers, hospitals, and pharmacies you prefer fall within the plan’s network?
A plan’s network contracts with doctors, hospitals, pharmacies, and other health care providers to provide members of the plan with services at a discounted price. Using the doctors and hospitals that are part of your plan’s network ensures you get the best value from your plan. Importantly, out-of-pocket costs for out-of-network services may not count toward a plan’s out-of-pocket maximum, which means you’ll pay more out-of-pocket before your plan starts covering your care. By confirming that your preferred physicians and pharmacy are included in the plan’s network, you’ll protect yourself against unexpected medical costs.
Are your regular prescriptions covered by the plan?
With nearly half of Americans using prescriptions, those costs are an important factor to consider when choosing a plan. Specifically, if you’re currently taking medications, you should check to see if it’s covered and at what level (it’s drug tier).
- Coverage: Each health plan is paired with a formulary, or a list of medications covered by the plan. If a medication is not on the formulary, it may not be covered, or you may need to receive special permission from your doctor.
- Drug tier: Formularies categorize each medication into specific tiers. Tiers, or levels (like generic, brand, and specialty), determine how much money you might have to pay out-of-pocket.
Make a list of your current medications and compare it to each plan’s formulary to make sure your medications are covered, and how much.
Decision Doc does this work for you, but you can also download this template.
Are there additional perks associated with the plans?
Health insurance plans can be utilized for more than just emergency and maintenance care. Many plans offer wellness programs and incentives to promote good health or tools to make it easy to manage benefits. Those perks can include gym memberships, yoga and Pilates classes, swimming lessons, counseling sessions, video conferences with doctors, and more. Check to see if perks are included in the plan.
Do you have a chronic condition or disease?
Six out of 10 adults have a chronic disease. Chronic diseases can include diabetes, heart disease, cancer, and kidney disease just to name a few. If you are managing a chronic condition or disease, you should consult your health plans to see which offer a management care program. These programs are designed to provide specific support and guidance on the care needed to manage and plan for the costs of care when living with the condition.
Does the plan come with a Health Savings Account (HSA)?
A high deductible health plan (HDHP) refers to a health insurance plan with lower premiums but a larger deductible for medical expenses. HDHPs come with health savings accounts (HSAs) – powerful savings vehicles. You can invest pre-tax dollars into an HSA and then use those dollars to pay for qualified medical expenses. By using HSAs, employees can save thousands of dollars a year through pre-tax dollars. Additionally, everything you contribute rolls over every year, whether you spend it or not.
Often, employers invest money into employees’ HSAs, as well, so that’s even more money back in your pocket!
What is your worst-case scenario?
With an estimated 23.6 million Americans spending a large share of their income on premiums or out-of-pocket costs or both, determining your worst-case scenario is critical. The worst-case scenario cost is the maximum you would have to pay for in-network medical services under each plan in a “worst-case scenario” (such as an emergency, accident, or unexpected medical condition). These costs consider risk in addition to savings.
To determine your worst-case scenario for any given plan, add the total annual premiums plus the maximum out-of-pocket cost for each plan. These numbers should be compared between plans to understand how well you would be insured under each in the event of unforeseen medical expenses.
Decision support can help employees make an informed decision regarding their health plan options. Our personalized solution gives employees everything they need to choose a better value plan. Learn more by visiting www.myhealthmath.com