Open Enrollment Ahead: Which Health Insurance Plan Should You Pick?

Health InsuranceFor many workers, it's almost time for the annual ritual of open enrollment, when you get to choose a health insurance plan and other benefits for the coming year. And while wading through all those documents and details may not sound like much fun, the right decision can save you enough money to make it worth the effort.

If you have multiple health insurance plans to choose from, your first consideration should be overall cost. The most comprehensive plans likely mean less money out of your pocket for co-pays and deductibles, but you'll pay higher premiums to get that coverage. By contrast, less inclusive coverage may force you to pay your doctor more for every visit, but you'll have less money taken out of each paycheck.

Obviously, it's impossible to know in advance exactly how much you'll need to pay in medical expenses. But based on your past medical history, you should be able to get a good idea of what you've typically spent in prior years. With that information, you can project what your costs will be under each plan and make an informed decision.

In general, if you don't tend to need much health care, then a less-expensive plan with higher co-pays and deductibles will usually save you money. The savings in premiums will typically outweigh the relatively small additional cost of out-of-pocket expenses throughout the year.

Conversely, if you have adverse health conditions that require frequent treatment, then higher-cost coverage may well be worth the price. Even small savings in co-pays and deductibles can add up if you visit your doctors often enough.

Stay Flexible

The other decision involves setting money aside in a Flexible Spending Account. For plan years starting in 2013, workers whose employers offer FSAs can set aside up to $2,500 per employee in pre-tax money for medical expenses. That's down from $5,000 this year due to limitations imposed by the Affordable Care Act, but it can still save you hundreds of dollars in tax liability.

The danger with FSAs is that whatever money you set aside in them must be spent on health care expenses by the end of the year (or shortly thereafter in plans with grace periods). Otherwise, you forfeit the savings. So in deciding how much to save, be conservative -- it's much better to save too little than too much and end up losing it.

It can be tough deciding on health insurance and other benefits. But with a whole year's worth of costs riding on the decision, it's smart to take some time and figure out the best answer for you.

For more on being smart with your money: Motley Fool contributor Dan Caplinger walks his spouse through the insurance documents every year. You can follow him on Twitter @DanCaplinger.

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Romney's signature legislation while governor is the Massachusetts HealthCare Plan with an individual mandate.

September 26 2012 at 10:07 PM Report abuse +3 rate up rate down Reply

Wages have been stagnant for years. Health care costs have been on a sharp price increase especially the last 10 yrs. People are living longer. And health care insurance companies monopolize their services. Consequently cost is becoming unattainable by workers. These facts along with the housing crisis and the worst recession in generations people can't afford health care insurance. And you want to talk personal responsibility look at just hypertension, obesity and diabetes costs. Many of these people could change their lifestyles and bring the cost down.

September 26 2012 at 10:06 PM Report abuse +3 rate up rate down Reply

The Heritage Foundation started this whole health care movement back in the 90's. The significance the Heritage Foundation is conservative. That's where Romney got his health care plan from. Listen to the health care economists from Princeton and MIT that configured the Massachusetts health care plan they both say the Massachusetts plan was designed to be a national plan. Romney himself said his health care plan is a model for the nation. The plan is insure everyone so to help contain cost. Of course Romney is in a very difficult spot and he knows it. Romney has been back and forth regarding healthcare. He knows as well as other Republican talking heads know it's very difficult to criticize Obama regarding his health care plan since it comes from RomneyCare and the people that designed RomneyCare. Romney signed into law RomneyCare because obviously there's a health care cost problem. And the problen was big and growing way before Obama.

September 26 2012 at 9:56 PM Report abuse +4 rate up rate down Reply

Monday, March 24, 2008
Recent history has not been kind to working-class Americans, who were down on the economy long before the word recession was uttered.

The main reason: spiraling health-care costs have been whacking away at their wages. Even though workers are producing more, inflation-adjusted median family income has dipped 2.6 percent -- or nearly $1,000 annually since 2000.

Employees and employers are getting squeezed by the price of health care. The struggle to control health costs is viewed as crucial to improving wages and living standards for working Americans. Employers are paying more for health care and other benefits, leaving less money for pay increases. Benefits now devour 30.2 percent of employers' compensation costs, with the remaining money going to wages, the Labor Department reported this month. That is up from 27.4 percent in 2000.

"The way health-care costs have soared is unbelievable," said Katherine Taylor, a vice president for Local 1199 of the Service Employees International Union. "There are people out here making decisions about whether to keep their lights on or buy a prescription."

Since 2001, premiums for family health coverage have increased 78 percent, according to a 2007 report by the Kaiser Family Foundation. Premiums averaged $12,106, of which workers paid $3,281, according to the report.

September 26 2012 at 8:59 PM Report abuse +3 rate up rate down Reply

Pick RomneyCare the national model for ObamaCare.

September 26 2012 at 8:48 PM Report abuse +3 rate up rate down Reply


September 26 2012 at 8:31 PM Report abuse rate up rate down Reply

Warning Will Robinson, WARNING....stay away from government reps. DO YOUR OWN HOMEWORK.

September 26 2012 at 6:45 PM Report abuse -1 rate up rate down Reply

Is broken, no mony, but obammy'll take car of me. yall have god day now please. i jst loves fre stuff. by, bye

September 26 2012 at 6:29 PM Report abuse rate up rate down Reply
1 reply to jyates1936's comment

wow...thats pretty racist...

September 26 2012 at 11:26 PM Report abuse +2 rate up rate down Reply

I want to give my money to the (check-writer) that has the lowest administrative costs!! State and federal govt. and insurance companies "ALL"get their money from us (americian taxpayer)to pay our healthcare providers!! That's right, even if your employer pays your premium, they are doing that instead of giving you the cash!! I personally don't care who gets my money as long as all of my healthcare bills are paid when I get sick and have to pay doctors and hospitals, and buy medicine!!! The fact that I could lose my life savings,and home if I get sick is not what our forefathers had in mind for the citizens of this once great nation!!!

September 26 2012 at 5:40 PM Report abuse +1 rate up rate down Reply

What will people with no access to real money get this insurance with their looks?

September 26 2012 at 1:18 PM Report abuse +6 rate up rate down Reply