Health insurance Medicare Your Coverage Options

Two tips to help you choose a health plan

Written by Diane Archer

During open enrollment season, many of us struggle to figure out which health plan to choose. People typically remain in their current health plans because that’s generally the easiest choice to make (it may also be our only choice).  But, it may not be the wisest. Your plan costs and benefits may be changing. And, there may be a better, less expensive plan, available to you.

How do you choose a health plan? If you have Medicare, most people choose traditional Medicare, the public health plan administered by the federal government, because it covers your care from virtually any doctor or hospital in the U.S. And, so long as you have supplemental coverage, almost all of your costs are covered. Here are four tips to consider before choosing between traditional Medicare and a Medicare Advantage or private Medicare plan. If you are choosing among different private health plans–employer plans, exchange plans or Medicare Advantage plans–because you generally will not know your future health care needs or what services the health plan will cover and what you will need to pay out of pocket, it’s really not possible to choose a health plan that you can be sure will meet your needs.

Here are two factors to consider:

  1. Your doctors and hospital: If you have doctors you know and trust, you likely want to call them to find out which health plans they are enrolled in and narrow down your options to those health plans. Keep in mind that doctors may switch from one health plan to another at any time during the year, so don’t assume that your doctor will remain in your health plan.  Also, if you travel a lot or live in different places at different times of the year, you probably want a health plan that will cover your care wherever you are. Traditional Medicare covers your care anywhere in the United States. Commercial (private) health insurance often limits your coverage to a particular geographic network and does not usually cover out-of-network care, except in emergencies. If you have Medicare, here are two questions to answer during the open enrollment period.
  2. The premium, deductible and copays: When you compare health plans based on costs, be sure to look at the deductible—the amount you pay out of pocket before coverage begins—as well as the premium and copays. Often health plans with low premiums have high deductibles and, if you do end up needing health care services, your costs can be far higher in one of those plans than in a health plan with a higher premium and a lower deductible. For example, a health plan with a $200 monthly premium and a $2500 deductible is effectively charging you $4900 for the year ($2400 plus $2500) if you need a bunch of health care services. A health plan with a $250 monthly premium and a $1000 deductible will cost you $4,000 for the year ($3000 plus $1000). Copays, the amount you pay out of pocket for a doctor’s visit can also add significantly to your costs if they are high and you have a complex condition that needs a lot of care. Keep in mind that your annual out-of-pocket cap can be quite high–it’s as much as $6,850 in a Medicare Advantage plan in 2016. For a crash course on five important health insurance terms, click here.

Note: If you are enrolled in a Medicare Advantage Plan and would like to switch to traditional Medicare, you can until February 14. To learn more and get free advice, call your State Health Insurance Assistance Program.

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