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‘Tis open enrollment season: How to pick the right health insurance

Marketplace guide Stephanie Cantres works on the Healthcare.gov federal enrollment website as she helps a resident sign up for a health insurance plan under the Affordable Care Act at a Westside Family Healthcare center enrollment event in Bear, Delaware In March.Marketplace guide Stephanie Cantres works on the Healthcare.gov federal enrollment website as she helps a resident sign up for a health insurance plan under the Affordable Care Act at a Westside Family Healthcare center enrollment event in Bear, Delaware In March.
Marketplace guide Stephanie Cantres works on the Healthcare.gov federal enrollment website as she helps a resident sign up for a health insurance plan under the Affordable Care Act at a Westside Family Healthcare center enrollment event in Bear, Delaware In March.Photograph by Bloomberg/Getty Images

It’s open enrollment time … again. If it doesn’t seem like a full year has gone by since you heard about this, that’s because in many places it hasn’t. Open enrollment for insurance purchased through the exchanges created by the Affordable Care Act didn’t end until March 31 of this year (and some states got extensions until mid-April).

If you’re purchasing your own coverage via the exchanges, you won’t have as much time this year. Open enrollment begins November 15 and ends February 15. And if you want your coverage to kick-in January 1, you have to pull the trigger by December 15. Medicare Open Enrollment – the time when all people with Medicare can change their health plan or prescription drug plan – is even shorter. It began October 15 and ends December 7. And if you are choosing a health plan from a menu your employer provides, your window may be shorter still.

So, this week I’ve pulled together some tips on making the right decision no matter where you’re shopping.

The Exchanges

If this is your second go-round with the exchanges and you do nothing, in most states, you’ll be re-enrolled automatically, says Don Silver, author of Obamacare 2015. “The problem is there are [many] ways re-enrollment can hurt you. That’s why he suggests that even people who have been happy with their plans go through the enrollment – and subsidy determination – process all over again.

Why? Prices have gone up, for one thing. Monthly health insurance premiums are projected to go up by an average 8%, according to Carrie McLean, Director of Customer Care ehealthinsurance.com. That’s average, she notes. “Some rates may go down. Others may go up by as much as 20%.” In addition, your plan may change. Many plans are ending, because they don’t cover the categories of benefits they are required to cover under the ACA, explains Cheryl Fish-Parcham, Private Insurance Programs Director with Families USA. Your insurer, though, likely wants to keep you and so they’ll send you a letter telling you that if you continue to pay your premiums you’ll be transitioned into a new plan. Look at it very carefully, McLean advises. There may be a rate increase. Your doctor may or may not be in the new plan. The prescriptions you take may or may not be on the formulary. Don���t just go along for the ride.

Whatever you do, don’t go without coverage. The penalties for not having coverage are rising substantially in 2015. If you want to see how much you’ll be on the hook for if you don’t buy insurance, this calculator from insurancequotes.com will give you a peek.

Medicare

This year, we’re seeing some reduction in the number of Medicare Advantage plans nationwide, says Juliette Cubanski, associate director of the program on medicare policy at Kaiser Family Foundation. That’s not necessarily bad news, she notes. “There are also a lot of plans coming into market. A lot of plans leaving market tend to be at or below average in terms of quality. People might have access to a higher quality set of plans in 2015.”

Bottom line: If the company you’re with is leaving the market, you’ll have to shop for a new plan. If the company is staying, but the plan is being eliminated, you may be shifted into the new plan automatically. For the same reasons I mentioned above, be careful of this.

Even if your plan isn’t exiting the market, Cubanski recommends taking a look at it to see if it still serves your needs. Monthly premiums on Medicare Advantage plans are going up an average of 4%. While that’s not drastic, a change in your plan’s formulary, or a change in the prescriptions you’re taking, might dictate making a change.

Finally, a bit of good news all around: One of the provisions of the ACA was the closing of the donut hole – the coverage gap that consumers had to fill – and that’s happening. “In 2015, when you reach the gap you’ll pay 65% of the cost of generic prescriptions and 45% of cost of brand name,” she says. That’s an improvement.

Employer-Based

The biggest change happening in employer-based health insurance is the shift away from traditional policies to high-deductible policies coupled with a health savings account – i.e. consumer-driven healthcare. This has been going on for several years, but it’s continuing. According to a survey from Aon Hewitt, 15% of companies surveyed now offer these plans as their only option, and another 42% of employers are looking at moving in that direction. Why are they doing this? They want you more involved, says Craig Rosenberg, Practice Leader for the Health and Welfare Benefits Group.

If your employer has jumped on board, you should know that with these plans, preventative care will be offered for free. But for everything else, you’ll need to set aside savings until you satisfy your deductible. That’s where a health savings account comes in. Some employers will make contributions to an HSA on your behalf. Others will allow you to do it with paycheck deductions. Some will do a combination of both.

Rosenberg suggests approaching the process holistically. “The price to purchase this policy is likely lower than a traditional plan. So, you could put for example some of that savings into a HSA. The HSA has a lot of tax advantages,” he notes. “Your contributions are tax free, any earnings or investment growth is tax free, and you can use it for healthcare expenses tax free.”

The other trend in employer provided healthcare is that more employers are offering incentives that promote healthy behaviors. You may be offered cash – or a lower price on your premiums – for taking a health screening or completing a health risk questionnaire. Blow these things off at your own peril. There are often hundreds of dollars there for the taking.

Arielle O’Shea contributed to this report.