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What are my alternatives to my existing healthcare insurance, where do I go to shop, and how do I know what’s best for me and my family?

The answer to this question is unique to you and your family’s past medical history, anticipation of future healthcare needs, and the insurance coverage you have now. Keep in mind that with the exception of a significant event – a change in your employment or marriage status – you will only be able to make changes at the end of a calendar year to take effect on January 1 of the following year.

 

Do I have alternatives?

If you currently have Employer Sponsored Health Insurance (as do ~50% of us) …

Your alternatives are:

  • Stay with your employer sponsored plan
  • An individual plan from the private or public Exchanges
  • If available in your state, go to a co-op plan
  • If you have a child with exceptional health care needs, a separate CHIP policy for them

 

If both you and your spouse have employer sponsored health insurance plans …

Then you have a number of options to consider;

  • The entire family on either yours or your spouses’ employer sponsored plan
  • One of you on their employer sponsored plan, and the rest of the family on the other employer sponsored plan
  • One of you on their employer sponsored plan, and the rest of the family on a commercial or co-op plan
  • The entire family on a commercial or co-op plan
  • Any of the above with one family member on a High Risk Pool plan

 

If you currently have an individual plan purchased from a commercial carrier or co-op directly (~5% of us) …

Then your alternatives are:

  • Stay with your current individual or co-op plan
  • Other commercial individual or co-op plans from the private or public Exchanges
  • If your employer offers one, an employer sponsored plan
  • If you have a child with exceptional health care needs, a separate CHIP policy for them

 

If you currently have Medicare (~25% of us) …

Then your alternatives are:

  • Make sure you understand and take advantage of Medicare Part D
  • Review supplemental Medicare policies.
  • Consider Medicare Advantage alternatives if available

Note: The State Health Insurance Assistance Program (SHIP) provides free benefits counseling service for Medicare beneficiaries and their families or care givers to educate, advocate, counsel and empower people to make informed Medicare benefits decisions based on their local (state) markets and conditions. You can get contact information specific to your state at http://www.seniorsresourceguide.com/directories/National/SHIP/ .

 

If you currently have Medicaid (~10% of us) …

Then your alternatives are:

  • A subsidized plan from your state or the federal Exchange
  • A catastrophic health plan

 

If you are currently uninsured (~10% of us) …

Then you are legally obliged to select one of the alternatives:

  • A subsidized plan from your state or the federal Exchange
  • A catastrophic health plan
  • Your state’s Medicaid program

 

If you have one family member with one or more chronic conditions …

You might consider a High Risk Pool Plan for just that person, and another policy for the rest of the family.

 

If both you and your spouse have employer sponsored health insurance plans …

Then you have a number of options to consider;

  • The entire family on either yours or your spouses’ employer sponsored plan
  • One of you on their employer sponsored plan, and the rest of the family on the other employer sponsored plan
  • One of you on their employer sponsored plan, and the rest of the family on a commercial or co-op plan
  • The entire family on a commercial or co-op plan
  • Any of the above with one family member on a High Risk Pool plan

 

How do I evaluate my alternatives?

Presuming you have options (as do most of us not on Medicaid), the path to finding out how your alternatives stack up and what you consider best for your future consists of three steps:

Step 1:   Make sure you know all the attributes of your current healthcare insurance (deductible, co-pays, co-insurance, annual limits, provider network, etc.).

Step 2: Decide what healthcare services and products (primary care and specialist office visits, predictable surgical procedures, durable medical equipment, prescription drugs, etc) you can predict that you’ll use in the coming year.

Step 3: Based on your existing healthcare coverage, calculate the total of what you will pay for monthly premiums in the coming year, plus what you can predict you’re Out of Pocket (OOP) expenses will be for the anticipated care from step 2 above. This will be the sum of co-pay’s, co-insurance, and all other physician fees and other expenditures up to your annual limit, if any. Consider this your ‘most likely’ financial forecast for next year.

Step 4:      Calculate your OOP expenses for a ‘worst case’ scenario. This might be an auto accident or the onset of a bad illness.   If you’re unsure what kind of numbers to use, presume you’ll be in the hospital for 10 days at $1,500 per day for a total of $15,000, undergo a surgical procedure for an additional $50,000, consume $10,000 in prescription drugs and durable medical equipment, and have specialty physician fees of $30,000. Added to your ‘most likely’ financial forecast, you now have an idea of what your ‘worst case’ scenario might look like.

Step 5:   Say an extra prayer that you’ll never use the information from Step 4 once this little exercise is complete.

Step 6:   Ask yourself where the money to cover your OOP expenses forecasted in Step 3 or Step 4 will come from. Do you have sufficient money in a health savings account? A normal savings account? Do you have enough discretionary cash flow monthly to just pay it? Will Mom and Dad loan it to you? If the answers to all of these is ‘no’, then you may need to either prioritize setting aside enough savings, or look carefully at an alternative with a higher monthly premium but lower total OOP expenses and/or a lower annual OOP limit.

Step 7:   Ask yourself how satisfied (or not) you are with your existing primary care and (if needed) specialty physicians.   Ask yourself if any of the other intangible factors (see the Pros and Cons of ‘Who Provides Healthcare Insurance?’ above) are important to you.

Now we’re going to take a break and think about how to define the important attributes that we’ll use to compare different options, and will help us decide the best possible health insurance plan for us or our family.

Likely Total Out of Pocket Costs (TOOP). This is the combination of monthly premiums and forecasted OOP expenses for the year.

Included/Excluded Benefits. What benefits are covered, and what’s your best prediction as to how they match you and your family’s needs?

Relative Financial Exposure. This is the cap on the maximum of OOP expenses for the year.

Intangibles. This includes participation by our favorite physicians, hospitals, and other providers, as well as any other non-financial factors that are important to us. If you have strong feelings about using a certain PCP, specialty physician, or hospital, check to see if they’re in the plan’s network. Even if you don’t have strong feelings about this, be cautious with narrow networks, as they include a higher risk of accidental use of an out of network provider, which can be extremely costly.

Step 8:      Decide what options are available to you, and go to the appropriate source to find details on different options. For the federal and state public exchanges (which will also indicate whether you qualify for a subsidy), go to https://www.healthcare.gov . Note that about 13 states have their own exchanges, but if you go to healthcare.gov and enter your zip code, you’ll be redirected to your state exchange if appropriate. If your employer offers coverage, go directly to your employer (usually their Human Resources department) for details on employer sponsored plans. For details on Medicaid and CHIP, go to https://www.healthcare.gov/medicaid-chip/getting-medicaid-chip/ .

Step 9:   For each option available to you, repeat Steps 4 and 5 above and check each option’s network of providers and other financial and intangible benefits that differentiate that option. Be sure to pay attention to benefits that may differ from your current option. For example, your current plan may not offer an incentive to use generic prescription drugs, or even telemedicine. A new option may offer free generic prescription medications or ow cost telemedicine services with a financial incentive to use them, since they’re likely to decrease overall expenses over the longer term.

Step 10: Assess all options against your own weighting of Total Cost of Ownership, Relative Financial Exposure, and Intangibles.

Step 11: Decide which option best suites you and your family’s needs.

 

Remember:  We coach, support, educate, and empower.  We illuminate options you may not have known you had.  But we don't decide what's right for you in your unique circumstances; only you can do that.  And we don't provide medical, financial, or legal advice; nor do we replace the valuable counsel of those who do.