A cure for ris­ing health insurance costs

Daily Local News (West Chester, PA) - - BUSINESS - To learn more, visit Con­sumerRe­ports.org.

Whether you get your health insurance through your em­ployer, Medi­care or one of the Af­ford­able Care Act (ACA) ex­changes, there’s a good chance you’re pay­ing more than you need to. Ac­cord­ing to a study last year by the Na­tional Bureau of Eco­nomic Re­search, 63 per­cent of the 50,000 em­ploy­ees at a For­tune 100 com­pany se­lected a health plan that was not the most cost-ef­fec­tive op­tion.

Pick­ing an insurance plan is down­right con­fus­ing. So Con­sumer Re­ports looked at some com­mon mis­takes peo­ple make when choos­ing insurance plans.

• The big mis­take: Au­to­mat­i­cally re-en­rolling in the same plan year af­ter year. Given peo­ple’s dis­taste for re­search­ing health-insurance plans, it’s not sur­pris­ing that a 2015 study com­mis­sioned by the insurance com­pany Aflac found that nine out of 10 work­ers stick with the same ben­e­fits year af­ter year. Other re­search shows that only 13 per­cent of Medi­care users switch drug plans each year, de­spite the fact that they could save money by do­ing so.

The rem­edy: Re­view all the of­fer­ings each year; plan ben­e­fits change fre­quently. Par­tic­i­pat­ing doc­tors are added and deleted, and drug for­mu­la­ries – the lists of pre­scrip­tion med­i­ca­tions a plan cov­ers – are re­vised. Other plan ben­e­fits, re­im­burse­ment rates and pre­mi­ums may also change from year to year. Insurance com­pa­nies pro­vide much of this in­for­ma­tion on­line, but Con­sumer Re­ports says that talk­ing with an in­formed source can be more ef­fi­cient than sift­ing through all that in­for­ma­tion on your own.

• The big mis­take: Mis­cal­cu­lat­ing – or hav­ing no idea – how much you spend on health

care. You can’t choose the most cost-ef­fec­tive cov­er­age with­out know­ing how much you’re likely to spend on health care in the com­ing year. But few peo­ple take the time to cal­cu­late their med­i­cal spend­ing, or even know how to do it.

The rem­edy: No one has a crys­tal ball to see into the fu­ture, but the amount you and other fam­ily mem­bers spent on health care this year is a good indicator of about how much you’ll spend next year, says Kim Buckey, vice pres­i­dent of client ser­vices at Direc­tPath, a ben­e­fit and com­pli­ance man­age­ment firm. Af­ter you’ve de­ter­mined how much you paid last year, “think about what could be dif­fer­ent next year,” Buckey says.

-- The big mis­take: Pick­ing the plan with the low­est pre­mi­ums. “If you shop by pre­mi­ums

alone, you could spend a lot more in outof-pocket costs than if you had gone with a higher-pre­mium plan,” says Kev Cole­man, head of re­search and data at HealthPocket, a tech­nol­ogy com­pany that com­pares and ranks health insurance plans.

The rem­edy: In ad­di­tion to pre­mi­ums, con­sider the amount of the de­ductible – how much you have to spend be­fore the insurance com­pany be­gins cov­er­ing ex­penses. De­ductibles can range from about $500 to $5,000 or more, but among low-pre­mium plans, the av­er­age to­day is closer to the high end of that range. Con­sumer Re­ports rec­om­mends also look­ing at co-pays (the flat charge you pay ev­ery time you go to a doc­tor, hos­pi­tal or other health care provider) and co-insurance (the per­cent­age of the bill that you have to pay for treat­ments).

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