Open Enrollment: Choosing a health insurance plan that is right for you.
November is open enrollment time for most Americans and the pressure of making the right health plan choices for you and your family can be very overwhelming. It’s easy to get confused by all the information, especially if your employer offers a variety of health plans with different options. It is important to understand the difference between the three most common health insurance options: an HMO/PPO plan and a high-deductible health insurance plan with a Health Saving Account (HSA). Knowing how each plan works is the first step in making an informed decision about your coverage for the upcoming year.
Breaking down HMO vs. PPO plans
A Health Maintenance Organization or Preferred Provider Organization (HMO/PPO) plan typically consists of high monthly premiums and lower deductibles with associated coinsurance and copays until you hit your out-of-pocket max. but have distinct differences when comparing the two. HMO plans usually have lower premiums than a PPO, but the provider network is more restricted, and they usually require you to coordinate medical care through your primary care physician (PCP) to receive coverage.
To break down the average cost of an HMO plan, The Kaiser Family Foundation 2018 Health Benefits Survey states that the average monthly premium was $572 for a single person and $1,620 for a family compared to PPO with an average monthly cost of $596 and $1,694 respectively. If you are trying to decide between the two, an HMO plan usually has lower monthly costs/deductible and the lowest out-of-pocket costs but the downside is a more limited network meaning that if you see a provider that is not part of the network, you will be 100% responsible.
- Affordability with lower monthly premiums and lower deductibles.
- Often require a PCP for referrals to see specialists.
- Plan comes with a list of in-network providers.
- If you choose to go out-of-network there is the possibility of no coverage at all.
- More flexibility when selecting providers.
- Fewer restrictions/covers more of the cost when using out-of-network providers.
- This is a more common option offered by employers.
The other option is choosing a High Deductible Plan with a Health Savings Account (HSA).
An HDHP plan usually has the lowest monthly premiums and a higher deductible. This means your first dollar isn’t covered until you hit your deductible, and then you are responsible for coinsurance and copays until you hit the out-of-pocket max. A high-deductible plan allows you to have a health savings account where you store tax-free dollars to fund your health care expenses, and the money rolls over so you can use it whenever and continue to add to it each year.
Athos Health CEO Jon Hess offered insights to Minneapolis based News Network KARE11 in 2019 in a segment called Healthcare Hacks. On the topic of picking your plan, Hess suggests choosing the high-deductible plan for most, especially if you’re a young and healthy family as you’ll be saving money every month on premiums while putting away tax-free dollars that you can spend on the high deductible. While it may seem counter-intuitive to choose something with “high-deductible” in the name, Hess points out that the out-of-pocket maximum is typically similar to HMO/PPO plans, meaning that you’ll be paying approximately the same dollar amount in the end with the high deductible plan.
Hess suggests that selecting an HMO/PPO plan would only be a better option if you know you will make frequent visits to the doctor as you will pay higher premiums but pay less for each office/hospital visits. For example, this might be beneficial for someone with a chronic condition, upcoming surgery, or a family planning to have a baby.
Athos is here to guide members in choosing the plan that will best fit each family’s unique situation and needs. If you are looking for some guidance in selecting a plan, don’t hesitate to reach out to email@example.com with questions big or small during open enrollment.