Know How To Decode Insurance Benefits?

For many workers, December means open enrollment time. To learn about the differences between an HMO and a PPO, host Michel Martin speaks with Michelle Andrews, a consumer columnist for Kaiser Health News.

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MICHEL MARTIN, HOST:

And now to matters of personal finance. Tomorrow is the last day for qualifying Americans to sign up for or make changes in their Medicare coverage during the so-called open enrollment period. But for many Americans, the door is also soon to close on the opportunity to choose and modify the type of health insurance plans they'll carry next year through their private employers.

But the thought of being trapped in a company conference room for information sessions or squinting at the small print in a bunch of insurance pamphlets is daunting for many of us, so we've called upon Michelle Andrews to help answer some common and perhaps not so common questions about open enrollment. She's a consumer columnist for Kaiser Health News. That's an independent research and policy group not affiliated with the Kaiser Permanente Health Insurance Company.

Michelle, welcome. Thanks for joining us.

MICHELLE ANDREWS: Thanks for having me.

MARTIN: Let's get some of the basics out of the way. What's the biggest decision most people have to make during the open enrollment period?

ANDREWS: Well, I guess the biggest decision is whether or not to take health insurance and that's going to depend, in part, of course, on whether your spouse has coverage, but at your own company, if you have the choice of more than one plan, you're going to have to pick a plan.

MARTIN: And, you know, we understand that - in fact, Kaiser Health News reported this - that the cost of insurance premiums seem to continue to be going up. Individuals on average will see about an eight percent rise over last year for families, a nine percent increase in cost of premiums over last year. Why is that?

ANDREWS: Well, some of it, of course, has to do with the cost of health care services. They are going up and there seems to be no end in sight. And consumers are being asked to pick up more and more of the overall cost of care as employers shift, as they have been doing for over a decade now, those price increases onto consumers' shoulders.

MARTIN: Is there any way you can not accept this? Is there any way you can push back or fight back against these increases in premiums?

ANDREWS: Well, you know, I think the key is really to examine and evaluate your own health because that's going to be the major driver. You know, if you are a pretty healthy person, like many young people, there are all of these - what they call consumer directed health plans, which have higher deductibles and, therefore, lower premiums. If you're pretty healthy, maybe that works for you. You know, maybe you can afford to spend $1,500 out of your own pocket before you really get your benefits to start kicking in.

But that's probably not a good strategy for someone who has chronic conditions, for example, because - you know, you need regular care and, in that case, even though you might be tempted by a really low premium, you know, it's just not going to pay off for you in the long run.

MARTIN: We're talking with Michelle Andrews, consumer columnist for Kaiser Health News. That's an independent research group. We're talking about managing insurance choices during open enrollment season. Many people who get health insurance through their employers are in open enrollment now. This is a period in which you have to make choices about the kind of insurance coverage you'll get over the coming year.

And one question that you have to decide - I mean, if most people just say, hey, let it ride. My family circumstances haven't changed. I haven't married, divorced, had another child, don't anticipate having another child. But there is one decision that has to be made every year, as I understand it, Michelle, and that's over the question of a flexible spending account.

Tell us what those are and what do you have to do? What's the decision that has to be made?

ANDREWS: What they are are accounts that allow you to set aside money tax-free or I should say on a tax advantaged basis so that you can cover your medical expenses, some of your medical expenses, out of that account and then it reduces your taxable income. So you need to look at your expenses and decide whether to put money into that account and usually that's a good idea. And then how much to put in.

MARTIN: Is there any reason why this wouldn't be a good idea?

ANDREWS: I can't think of one. I think that those accounts are underutilized. People kind of think, oh, taxes. I don't know if I want to get involved. And they're good to use and as I think about it, I guess the one caveat would be not to put too much in because, at the end of the year, in fact, if you don't use that money, you will lose it. But as long as you plan carefully, you should be fine.

MARTIN: Why wouldn't you use it? I'm still puzzled by - why wouldn't you use it? Because you can cover everything from what? Like eyeglasses. Right? Braces, orthodonture. Why wouldn't you use it?

ANDREWS: I think that people just - you know, they don't pay attention and they don't get their act together. But absolutely - you're right. I think people should take advantage if they can.

MARTIN: And also, wellness programs. Michelle, tell us about that. Sometimes, companies encourage employees to participate in wellness programs in the hope that that will obviously keep medical expenses down. Are there any decisions that have to be made about that in this open enrollment period?

ANDREWS: There are many ways that companies are trying to get people to be healthier because, as you say, they do hope that it's going to reduce their health care costs. And you need to take a look at those because you may actually be able to reduce your own health care costs by taking advantage. And what I mean is that, for example, a company might ask you to fill out a health risk assessment and that's just a questionnaire that says, you know, do you have diabetes? Do you get exercise? And, you know, sort of general questions.

They want you to do that because that'll help them target services to you and help you stay healthy, but they may also be willing to pay you to do that, so you know, don't give up the free money.

And then, beyond that, many companies now are beginning to offer people breaks on their health insurance premium, for example, if they participate in a wellness program or if they take it so far as to keep their blood pressure, for example, their cholesterol levels, their weight, within targeted healthy ranges. If they do activities that do that, then the company will maybe give them up to 20 percent off on their health insurance premium.

MARTIN: Finally, Michelle, what's the one piece of advice that you would give, perhaps to a family member or a friend, about navigating their open enrollment choices at this time of year? Is there something that you're just dying to tell people that you just wish they would ask you that you can tell them?

ANDREWS: You know, what I think is really important is, one, as you alluded to earlier, don't just let it ride and assume that everything's fine. You know, about two-thirds of people have a choice of health plan with their company every year. And you need to really go and take a look and see what's covered because things are changing. You know, employers are asking people to pay more for certain kinds of services. Drug lists of approved drugs are changing and if you just kind of let it ride, chances are you're going to end up in a plan that may not be the right one for you. So that would be my best advice.

And the other thing is don't wait until the night before to look at your plan materials because, you know, sometimes, these are complicated things and you really want to take the time to look at your options and make the best choice.

MARTIN: Michelle Andrews writes the column, Ensuring Your Health, for Kaiser Health News. That's an independent research and policy organization. And she joined us from her office in New York. Michelle, thanks so much for joining us.

ANDREWS: Thank you.

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MARTIN: Coming up, the Penn State scandal has cast a shadow on mentors and coaches, but kids still need mentoring relationships that are helpful, nurturing and safe. What crosses the line? We'll ask a panel of dads and veteran mentors. That's just ahead on TELL ME MORE from NPR News. I'm Michel Martin.

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