Finding Your Way: Open Enrollment—What to Consider When Choosing a Health Plan

It’s open enrollment season, the time when millions of workers will choose the health insurance plan they’ll have next year. With premiums rising for health coverage offered by employers, it may feel more like open season on your wallet. That’s all the more reason you should understand your options.

To get the best value from your health plan, you need to understand your different coverage options and how they work. Then you need to make a choice that’s based on your personal situation, such as whether you are single or married or have a chronic health condition.

First, it’s important to consider what you get when you purchase health insurance. Insurance helps protect you from high health care costs that you probably could not otherwise afford. It helps you pay for health care and ensures that you have access to care when you need it. And research shows that having health insurance is closely tied to getting quality, timely care.

Many employers pay for most or some of the costs of insurance premiums for their workers. As a result, getting health insurance from your employer is typically cheaper than buying coverage on your own. My agency, the Agency for Healthcare Research and Quality (AHRQ), found that the majority of uninsured American families who are not covered by health insurance at work couldn’t afford to buy health insurance.

Sorting out the options

During open enrollment season, people can choose among different health plans. This can be confusing. Not all health plans pay for the same services or the same amounts for services. Different plans can include different doctors, hospitals, and other care providers.

Plans also vary in how much you’ll pay before your insurance covers you. These are called out-of-pocket costs and they usually are in the form of deductibles or coinsurance. The deductible generally is an annual amount that is not covered by your health plan. It must be paid before your health plan starts to pay for your care.

Coinsurance is the percentage of your health insurance bill that you must pay when you file a claim. This percentage is usually in addition to the deductible.

Many of the common health insurance plans today offer several choices for coverage, based on factors including cost, flexibility and how much of a role you want to play in managing and paying for your own health care. These include:

• Preferred provider organizations (PPOs). These plans contract with doctors, hospitals and other providers but typically do not manage your care. PPOs allow you to see providers outside the network, but you will pay more for your care if you do. These are the most common work-based health plans.

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