Is your health insurance plan working out for you? Open enrollment is the time once a year when you can change or cancel your plan or sign up for a new plan. It only lasts for a few weeks, so it’s important to check over your health insurance and decide if you want to make any changes.
- For health insurance through the Affordable Care Act (ACA) Insurance Marketplace, open enrollment is November 1, 2023 through January 15, 2024.
- Note: You’ll need to enroll by December 15, 2023 if you want coverage to start on January 1, 2024.
- For Medicare, open enrollment is October 15, 2023 to December 7, 2023.
- For Medicaid, you can enroll anytime.
- For health insurance through your job, your employer will set the dates for open enrollment. The dates are usually in the fall.
Here are answers to some key questions about open enrollment from Banner Health and Cedar, a health care financial engagement platform.
Why is open enrollment only once a year?
If you could enroll in health insurance at any time, a lot of people might wait until they get sick to buy it.
If this happened, premiums would increase since most of the people on the insurance plan would have high medical bills. If premium prices go up, even more healthy people might decide not to buy health insurance and they would continue to rise. At some point, health insurance would be too expensive for almost everyone.
By limiting enrollment to once a year, more healthy people enroll and their premiums help keep costs down for everyone.
However, if certain things happen in your life, you can change your insurance plan no matter what time of year it is. If you get married or divorced, have a baby, lose the insurance you get from your job or move away from the area covered by your health plan, you can change your health insurance.
What should you think about before open enrollment?
“You’ll want to think about your health care needs when you’re looking for the best health insurance plan,” said Emily Phillips, commercial insurance specialist for Cedar. It’s important to make sure you have the plan that’s right for you and your family, especially if your health needs have changed.
Here are some things to think about:
- How healthy are you? Are you healthy overall, or do you have pre-existing medical conditions? If you know that you will need certain treatments or care from specialists, you can factor that into your decision.
- What medications do you need? If you take prescription drugs regularly, make sure they are covered on your plan and look into how much you will need to pay for them.
- Which doctors are included? If you want to keep seeing your primary care provider or any specialists, make sure they accept your plan.
- What might happen in the next year? You might be planning to have a baby or considering something like joint replacement surgery or weight loss surgery. You’ll want to see what coverage is included in these situations.
What types of plans are available?
There are a few different types of health insurance plans. A lot of them are either health maintenance organizations (HMOs) or preferred provider organizations (PPOs).
Here’s what you’ll usually find with HMOs:
- Lower premiums and out-of-pocket costs
- Coverage for a primary care provider (PCP) who’s in the network
- The ability to see a specialist in-network, with a referral from your PCP
You may want to choose an HMO if you’d rather save money and don’t mind staying within the plan’s network of doctors and hospitals.
Here’s what you’ll usually find with PPOs:
- Higher premiums and out-of-pocket costs
- More flexibility to see providers who are in-network or out-of-network
- The option to see a specialist without a referral
You may want to choose a PPO if you can afford to spend more money, so you have the freedom to choose your doctors.
What about high-deductible health plans (HDHPs)?
A high-deductible health plan is a type of HMO or PPO that has a deductible greater than $1,400 for individuals ($2,800 for families) and lower premiums. These plans can also be paired with health savings accounts (HSAs), which offer tax benefits.
While HDHPs are usually among the most affordable health insurance options when it comes to upfront costs, it's important to understand how deductibles work and the potential out-of-pocket costs associated with them.
What types of costs are part of health insurance?
It’s important to understand all of the costs of health insurance. That way, you can estimate how you might use your health insurance and choose the plan that fits your needs.
“There are a few different costs to consider when you're deciding which health insurance plan is best for you,” Phillips said.
- Premiums are the monthly fee you pay for your health plan. If your premium is lower, your out-of-pocket costs (deductibles, copays and coinsurance) are likely to be higher. Your premium will impact your monthly budget, so choosing the right plan can save you money.
For example: You might be deciding between two plans. Plan A has a monthly premium of $100, so you pay a total of $1,200 for the year. Plan B has a monthly premium of $200, so you’ll pay a total of $2,400 for the year. However, Plan B might cover more medical expenses. So if you can estimate your medical costs for the year, you can decide which plan might be better in the long run.
- Copayments (copays) are set amounts that you pay when you see a doctor, stay in a hospital or have other medical expenses.
For example: Your plan may have a copay of $20 when you see your primary care doctor, $30 when you see a specialist and $15 when you fill a prescription. If you know how often you expect to see doctors and fill prescriptions, you can estimate these costs for the year.
- Deductibles are the amount you pay before your health insurance plan starts to chip in. Usually, when your premium is lower, your deductible is higher.
For example: If you choose a plan with a $1,000 deductible, you pay the first $1,000 of your medical bills, even for covered services. After you have paid $1,000, your insurance plan will start to pay these fees.
When you understand your deductible, you can budget for your known upcoming medical expenses.
- Coinsurance is the amount you pay for covered health care services after you have met your deductible.
For example: Let’s say you have 80/20 coinsurance. If you have paid your deductible and your plan’s allowed amount for a doctor visit is $100, then health insurance would pay $80 and you would be responsible for the remaining $20.
It can be complicated to figure out how much health care you might need in a year and add up how much it would cost. But it’s important since it can make a big difference in how much you pay.
Here’s how it could play out. Suppose you’re comparing two health plans:
- Plan X has a $100 monthly premium, a $1,000 deductible and a $30 copayment for doctor visits.
- Plan Y has a $200 monthly premium, a $500 deductible and a $20 copayment for doctor visits.
If you're generally healthy and rarely visit the doctor, Plan X might be the better choice. That’s because you won’t be spending much money on medical bills. You can save money by choosing the plan with the lower premium.
If you have a chronic condition and need regular medical care, Plan Y might be the better choice. That’s because even though you pay higher premiums, your deductible and copays are lower.
“It's all about finding the balance that works best for you,” Phillips said.
How do you get started?
It usually makes sense to review your current health insurance plan and see how well it meets your needs. Then you can compare it with other plans.
As you compare, be sure to check what the plans cover. For example, you may want a plan that includes the mental health support you need.
Check the network as well. Choosing a plan where your preferred doctors, hospitals, labs and specialists are in the network will be less expensive.
You may also want to consider additional benefits, such as dental or vision coverage or wellness programs.
The bottom line
During open enrollment, you can make changes to your health insurance plan. By understanding things like premiums, deductibles and copayments and estimating your health care expenses for the next year, you can decide whether it makes sense to stay with your health insurance plan or switch to a new one. Your best choice is one that balances the coverage you need with the amount you spend.