The phrase "open enrollment" makes many Americans cringe. It's the time of year when millions of people must make critical decisions about their health insurance plans for the coming year. It's also the time of year when many Americans make the wrong choices when it comes to their health insurance.
According to an August 2011 survey conducted for supplemental insurance company Aflac, about three-fourths of American workers who make decisions during open enrollment acknowledge they've made mistakes regarding their benefits. And 42 percent of workers say they've wasted money because of such mistakes.
Who's affected by open enrollment?
You’ll face open enrollment if you fall into one of the following categories:
• You get health insurance coverage through your employer, and your employer offers more than one choice of plans. Employers set aside a period of time each year when workers can opt to stay in the plan they have now or switch to a new plan. Open enrollment can happen at any time; at most employers, it takes place in the fall.
• You’re enrolled in Medicare. Those covered by Medicare can choose to keep their current plans or shift to new ones. In 2011, open enrollment for Medicare lasts from Oct. 15 to Dec. 7.
To make the best health care choices, avoid these eight common blunders during open enrollment.
1. Sticking with the same plan for convenience. Even if you're satisfied with your current coverage, signing up for the plan again may not bring you the same benefits in the coming year. Plans change, says Ingrid Lindberg, customer experience officer at health insurance giant CIGNA. Before saying “yes,” read carefully through the plan, checking that your current doctor will be in plan’s network for the coming year.
2. Failing to think ahead. Are you planning on having a baby in the coming year? Will you need to have surgery? Take into account how these changes will affect your health coverage needs.
Even if you’re in perfect health now, you always need to consider what would happen if you had a medical catastrophe, says Nancy Metcalf, senior program editor at Consumer Reports magazine.
3. Assuming bigger is better. Sometimes the perception is that more expensive means better coverage, says Julie Stone, senior consultant at consulting powerhouse Towers Watson. “You have to really look at the plans and details themselves," Stone says, "and then decide what’s best for you.” Depending on your situation and your family’s situation, you may decide a lower-priced plan with slightly more risk is a better option.
4. Automatically signing up family members. If you have a family member who's able to get coverage elsewhere, it’s worth your time to investigate that option. It may be more cost-efficient that including that relative as a dependent on your plan.
5. Overlooking health savings account (HSA) benefits. If you’re enrolled in a high-deductible plan with a health savings account, look into what you can contribute toward it. The amount you put in can be used to help pay for out-of-pocket expenses and offers tax advantages. The best part: it’s portable. If you switch jobs in the coming year, you can take the account with you.
6. Missing incentives. Many employers are offering perks – often in the form of cash – for participating in certain health programs, Stone says. You could get money for completing a health risk appraisal, enrolling in a stop-smoking program or participating in a program that helps manage a chronic condition such as diabetes.
7. Not looking out for scams. If you’re enrolled in Medicare, be wary of any unexpected visitors claiming to represent Medicare or the federal government, as they may be after your personal information and nothing more. In general, insurance agents may discuss Medicare products only during appointments arranged with consumer, according to the Missouri Department of Insurance.
8. Not doing online research. After narrowing down your choices, look at the insurance company websites that carry the plans you’re considering. If you’re enrolled in Medicare, visit Medicare.gov for plan comparison tips. Check out additional reviews at Consumer Reports' website. “We encourage employees to be just as diligent about comparing health plans as they are for other consumer goods they buy," Stone says.
Four more tips
Here's some additional guidance to help you navigate the open enrollment process:
1. Check for free preventive services. Ask whether your plan is “grandfathered” in. If it’s not, you may be eligible for a long list of free preventive services, including immunizations, cancer screenings and blood pressure tests. Find more information at HealthCare.gov.
2. Read carefully for hidden perks. Many health plans offer benefits such as 24-hour phone support from nurses, discounts on fitness club memberships and even coupons for over-the-counter drugs.
3. Understand the terms. Health care jargon can get complicated – fast. If you’re not sure what the terms in the plan you’re considering mean, get online, ask your employer or call your health insurer.
4. Keep your information safe. If you’re covered by Medicare, don’t share your name, Social Security number, Medicare number or credit card information with anyone who comes to your home or calls unexpectedly.