How to Save on Health Insurance, Part 1: Open Enrollment

Late September marks the beginning of "open enrollment," the multi-week period when employees can select their employer-offered benefits, including health care plans. "It's an opportunity to shop, so to speak, with regards to health care," explains Yasmine Winkler, a senior vice president at UnitedHealthcare (UNH), one of the nation's largest private health insurers.

While many Americans groan at the prospect of reviewing our benefits -- so much paperwork, so many confusing terms -- open enrollment is an important chance to ensure we're getting the most bang for our health care buck. To that end, I spoke with Winkler and Michael Mahoney, vice president of consumer marketing at the insurance broker GoHealthInsurance.com, for tips on the most cost effective ways to select benefits.

In the first installment of this two-part series, the experts discuss how to save money on employer-offered benefits. In the second part, we'll consider cost-saving strategies for people who don't have employer-offered health insurance, and instead purchase individual plans.

1. Learn the Lingo

Health insurance terminology is vast and complicated, so find a website that can provide you straightforward definitions and explanations that you can refer back to as you work through your benefits. Good ones include Wisegeek.com, AARP and Bankrate.com,

2. Identify Which Benefits You Need ... and Which You Don't

"A lot of people take employer benefits for granted. They don't dive in on the details, they just know they've always had insurance through work," says Mahoney. "But it may be that you have benefits you don't need. For example, if you're not planning to have a kid soon, you may not need maternity coverage." In instances where your employer's plan offers benefits you don't need, Mahoney suggests pricing an individual plan that only includes your needed benefits, and comparing the two.

However, the opposite is also true. If you know that you need certain benefits, your employer-offered plan may be the cheapest way to get them. "I have three kids," says Winkler, "and everyone in our family wears glasses, so it would be foolish for me to pass on the vision benefit given the cost of contacts, glasses, annual eye exams." According to Winkler, many employers offer additional benefits such as vision, dental, disability and critical illness coverage for relatively low-cost premiums.

3. Establish Your Priorities

Once you know what you need, you can determine how important various aspects of your coverage are to you. You might have a certain doctor you want to use, or a specific medical facility. Is that more important to you than saving money on your monthly premium? These are questions you have to answer as you select your plan. For example, most employers offer access to both an HMO or a PPO plan. "Traditionally the HMO is cheaper but has fewer options," explains Mahoney. "They have a smaller list of providers that insurance will pay for, and they won't cover the service if it's out of network." In contrast, a PPO costs more, but has a wider range of providers and will cover some portion of the cost of service even if the provider is out of network (say, for example, that you require medical assistance while traveling out of state).

4. Compare Treatment Costs

Like most everything else in the world, the cost of medical services varies by provider and insurer. This is due in part to the fact that different providers negotiate different rates with different providers, and in part because each provider determines its own prices. As a result, most insurance providers offer tools that allow you compare the costs of various physicians and facilities, and Winkler suggests consumers use them.

"Comparing gives you a better sense of how much is paid by you versus the health plan for various services," she says. "They give you a sense for discounts that apply that health plan has negotiated, and helps you to understand average cost of care."

5. Determine Your Risk Tolerance

"Insurance should be a financial protection product," says Mahoney. "It should protect you when you have an accident or an illness." To that end, Mahoney stresses the importance of thinking long and hard about your comfort with risk when you select your plan. "If you earn $25,000 a year and you have an accident and have a $15,000 deductible, that insurance really didn't provide any protection. If your deductible is $2,000, that's a lot more protection, but you have to pay more per month for that privilege."

6. Take Advantage of Preventive Care

Basic preventative care -- medical services intended to help you stay healthy -- is covered 100% by health care providers, irrespective of whether or not you have a low- or high-deductible plan. That's a great thing not only for your wallet but for your long-term health as preventative care can identify problems before they become serious. So, if you aren't currently taking advantage of these free services, which usually include annual physicals, well-baby care, immunizations, mammograms and colonoscopies, get started.

7. Know the Bells and Whistles

These days, employers are offering all sorts of extras to help employees get, and stay, healthy, and most of them can fatten your wallet while helping your health. For example, many employers are now offering incentive-based plans that "give employees the opportunity – and maybe dependents – to earn dollars for healthy actions," says Winkler. "Sometimes it's credit towards the premium, credit towards the deductible, or maybe even a gift card. We have an employer, an international company, who offers employees the chance to win a car in a raffle when they do various healthy actions." The activities can be as simple as taking a screening exam to educate yourself about "your numbers" -- that is, your cholesterol, your blood pressure, your glucose level.

According to Winkler, another popular program is the Health Savings Account. Unlike a Flexible Spending Account, the funds of which must to be used up within the year and cannot be transferred between employers, the Health Savings Account is "like a personal bank account specifically related to health expenses," explains Winkler. "Those dollars are yours, so if you leave, that money can go with you. It's interest-bearing and tax-free. There are limits on it -- for 2012, single coverage is capped at $3,100, and family coverage is capped at $6,250 for the tax year. But it can be deposited pre-tax from your paycheck, so there's a lot of tax advantage to it and it's very worthwhile."

Loren Berlin is a reporter with the AOL Huffington Post Media Group. She can be reached at loren.berlin@teamaol.com, on Twitter at @LorenBerlin, and on Facebook.



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Faisal khan Khan

This is a great article! Thanks for all the advice. I'm trying to figure out how much money spending on flex time. Please note - govt changed the rules a lot of what flex the right to ask for benefits in 2011, before submitting the 2011 budget! The OTC drugs are now available on prescription! Therefore, no request for allergy medications, aspirin, abdominal discomfort, Tylenol without a prescription!

www.funzpop.blogspot.com

October 31 2011 at 8:04 AM Report abuse rate up rate down Reply
greenterry4

emergency medical services are covered in any event. alot of hmo;s have nationwide networks.

September 29 2011 at 8:28 PM Report abuse +1 rate up rate down Reply
indisposed99999

The article has the economics correct. The problem is that our present administration believes that the one set of laws that can be consistently overlooked is the law of economics. The goal of healthcare reform was to lower the rate of growth in healthcare. The bill does precisely the opposite (Note: not a tea party idealogue, I am an economist). The bill incentivizes the young and healthy to pay the penalty rather than pay for health care (precisely the people you want buy insurance), while removing the future consequences of that decision (by not disallowing coverage in the future for a "preexisting condition").

Same thing on this newest "jobs bill". I just read that it would allow the unemployed to sue an employer if they believe that their unemployed status cost them the job. Sounds great in theory, right? The reality, employers now have even LESS incentive to interview the unemployed, because, now, if they don't offer that person the job, they can be sued.

If you want people to buy health insurance, you don't make it more expensive for them to do so, at the same time you reduce the future costs of not doing so. You also don't make it more expensive on employers to hire people during a jobs crisis.

There has to be one economics 101 textbook sitting around the west wing....can someone at least assign an intern to read the thing!

September 28 2011 at 11:45 AM Report abuse +1 rate up rate down Reply
mrbjaw

If you think health insurance is bad now, you haven't seen anything yet. When my son decided to go back to collage, I told him I would pay his health insurance, he lives in another state and is over 26. We just got his new premium for the next year, it want up 11%, 7% was for the increase for health care cost and 4% was for all the mandates put in place this, year and there will be more next year, for Obama-Care . I still don't know how much my health insurance will go up till the 1st of they year, but I gust about the same if not more. Thank you Obama and the rest of you Dems. Just remember, the next time you have to sign a contract for your own personal business, just sign it, then read it to find out what in it.

September 27 2011 at 7:45 PM Report abuse rate up rate down Reply
WILLS

Since all health care plans are about to take a substantial rise, open enrolement is a tad moot.

September 27 2011 at 6:57 PM Report abuse +1 rate up rate down Reply
phbotham

BOGUS

1. This article assumes you have a JOB.
2. This article assumes you have a full time permanent JOB.
3. This article assumes your employer offers health care benefits AT ALL.
4. This article assumes we wouldn't notice all of the above are scarce in this economic environment.

BOGUS

September 27 2011 at 5:20 PM Report abuse +1 rate up rate down Reply
3 replies to phbotham's comment
toosmart4u

If the republicans get their way we will all have to buy health insurance. Plus no more social security or medicare.

September 27 2011 at 5:05 PM Report abuse +3 rate up rate down Reply
1 reply to toosmart4u's comment
Chuck Crow

You are so stupid it is amazing you can even write.

September 27 2011 at 6:29 PM Report abuse +1 rate up rate down Reply
jamixpress

Its true, if you check out some of the low cost insurances for those that dont have it, you will find that you have to make under $200 a week, which is poverty level, and it is open to illegals as well. So some off the books worker, will get everything! It is also true if you walk into hospital and dont speak english, you will get help regardless. Speak english, and if you not dying or bleeding to death, they will let you sit there to die. I watched it myself in hospitals, and know illegals that tell me they dont need insurance, they plop themselves in the hospital, even with a cold, and they get taken. Me-I will die before they help me!

September 27 2011 at 3:36 PM Report abuse +1 rate up rate down Reply
1 reply to jamixpress's comment
alycemd

No matter what language you speak, you WILL be seen in the ER for an emergency. Language -- or national origin -- is NOT what decides if you will be seen. Every patient who presents to an ER must be evaluated first to make sure if it is a true emergency or not. If it is, by law the ER staff cannot delay care by asking for insurance/financial information. If it's not, you will wait through the registration process, etc., and be seen in order of severity of problem and you or your insurance company will be billed. If someone gives a false name, etc., they have committed fraud. Some ERs are requiring picture ID for any non-emergency patient. People who skip on their bills -- no matter what language they speak -- will cause the cost of care to everyone else to go up.

September 29 2011 at 8:42 PM Report abuse +1 rate up rate down Reply
ryanslaws

Are there still companies that offer a multitude of health insurance options? I'm impressed. Must be the same companies that still offer old-fashioned pension plans . . . all of four or five companies maybe?

September 27 2011 at 3:35 PM Report abuse +1 rate up rate down Reply
george3373

The latest tid bit from the was not read before it was passed . The head of health human services Sebelius has a new regulation and it requires that all insurance companies ie patients provide their medical records to you guessed it the Federal government. Patient confidentiality is no longer if this goes through. Get rid of Obama care

September 27 2011 at 3:15 PM Report abuse +1 rate up rate down Reply
2 replies to george3373's comment
wfreeberg

You either want good health care or patient confidentiality, you can't have both. Good health care is dependent on full communication of health records to the doc currently seeing you. Many die in the emergency rooms because the ED clinicians do not have current clinical info on the patient. They perform normal procedures and administer normal meds that might work for most but kill some.

September 27 2011 at 3:41 PM Report abuse rate up rate down Reply
savemycountry911

Pelosi said, " We have to pass it to read it." The idiot.

September 27 2011 at 4:02 PM Report abuse rate up rate down Reply