Choosing your health plan
It's open enrollment season. And with costs rising, it's more important than ever to pick wisely.
By Leslie Haggin Geary, CNN/ staff writer

New York (CNN/Money) Who's going to help take care of your health next year?

That's a question millions of American workers will have to decide in coming days, during so-called open enrollment season. For the uninitiated, that's the few weeks that employers give workers an opportunity to choose a health insurance plan for the coming year.

For many of us, the process can be mind-numbing. All those health forms, plan literature, directories of physicians. Who has time to read it all?

The answer: too few of us. In fact, the typical worker spends more time making breakfast than choosing a health plan.

But with benefits being cut and rates going up, that may prove a costly mistake. After all, it's better to find out if a procedure or prescription you need is covered by your future insurer before you sign on for a plan.

So take some time and focus on what you're being offered. After all, it's your money paying the premiums, co-payments and much of the drug costs. And it's your health.

Pick a style that's best for you

The first step in choosing the right coverage is figuring out what type of plan is best for you. Unfortunately, health-care jargon doesn't make it easy. Heavy on acronyms, there's little that sheds light on, say, the difference between a POS or a PPO. Here's the run down.

Health Maintenance Organizations, or HMOs, are among the cheapest plans around. But they're also among the most restrictive. That's because providers will only pay for care that's administered by doctors who are part of their official "network" of care. If you see a specialist outside the network, you pay the tab yourself. What's more, any specialized treatment you receive must be pre-authorized by a "primary care physician," who acts as a gatekeeper to other care. So that means if you, oh, blow out your ankle during your workout and you want to see a physical therapist, you'll need to check in with your primary physician first. For many, that hassle isn't worth it. Still, because they're relatively cheap, HMOs may offer the most attractive choice for healthy individuals who don't frequently see doctors or specialists.

If flexibility is what you're after, though, you might consider a Preferred Provider Organization (PPO). Such plans allow you to see doctors who aren't in their network - and they're becoming increasingly popular as a result. What's more, a PPO generally does not require you to have a primary-care physician who signs off on your care. That makes them only slightly different than a Point-of-Service Plan (POS), which often have primary-care physicians who refer you to network care but give you the same freedom to go outside it, just like a PPO.

If you've got a favorite physician, pediatrician or other doctor be sure to check that they're included in any plan you're considering. In fact, you may find it valuable to talk to your doctor's billing office to get their opinion about which insurance plans are more generous, pay tabs quickly, and will likely give you less of a hassle about getting care.

Another option? Check the online annual report card of various health-care plans from the non-profit group, National Committee for Quality Assurance (888 275-7585).

What's it cost? Be sure to ask

You're next step is to try and determine how much you'll end up paying for care. And this year, don't be surprised if it goes up. A number of surveys, from consumer and health groups like the Henry J. Kaiser Family Foundation and the Center for Studying Health System Change note that as health care costs skyrocket, employees are being asked to dig deeper into their own wallets to pay for insurance.

As you compare costs you may find it helpful to use health plan budget worksheets to compare your potential overall costs. You can find one online from Health Insurance Association of America. (Click "comparing plans" to get to the worksheet.)

Your first item of concern should be big-ticket costs, namely the annual premium you're asked to contribute. You may get a case of sticker shock. This year, single individuals will pay roughly $454, or $38 a month, to enroll in a plan. That's up 27 percent from a year ago, according to Kaiser and Health Research & Educational Trust.

The average tab for family coverage isn't cheap, either: about $2,084 annually. That works out to roughly $174 each month.

Next, pay attention to deductibles, especially if you opt for a PPO or POS and there's a chance you're going to see a doctor who's not in their network. That's because deductibles for out-of-network care typically run higher. (The average individual will pay anywhere from $200 to $350 more a year in out-of-pocket deductibles if they go out of network than stick to doctors in their PPO or POS plan.)

You'll also have to be careful with co-payments for office visits. Individuals in HMOs still largely pay $10 every time they see a doctor. But if you're in a PPO or POS plan and you decide to get out-of-network care, you'll pay significantly more. Nearly half of both kinds of plans require patients to shoulder 30 percent of the total tab.

Drug costs also have been skyrocketing and employers are paring their bills by asking employees to shell out more for medications. In particular, health plans are using "tiered" pricing systems, which require employees to pay less for generic drugs (about $9 a prescription) and as much as $26 for name-brand varieties.

Finally, be aware that just because a health plan has prescription drug coverage doesn't mean you can't get caught short. Many restrict the kinds of prescriptions they'll cover. Oral contraceptives, for example, may not be included. Your best bet? Ask a health plan rep if specific prescriptions are included in your plan before you sign on.

Pay attention to benefits

If you're the kind of person who never sees a doctor, you can probably rest assured that most health plans will be sufficient. In fact, according to the Kaiser study, plans have become more generous about covering preventative care including such things as health-club memberships or chiropractic care. Moreover, nearly all plans pay for "routine" services such as annual check-ups, prenatal care, yearly check-ups with an obstetrician/gynecologist and well-baby care.

But the health-insurance safety net may be awfully thin when it comes time to covering treatment that's not considered routine.

Consider mental-health care. Each year, roughly 20 percent of Americans experience anxiety, depression or other effects of mental illness. And while private insurers do cover such things as, anti-depressants, therapy sessions and stays at rehab centers, individuals continue to shell out a whopping $12 billion out-of-pocket of their mental health-care tab, according to one study by the U.S. Surgeon General's Office.

They're likely to keep paying, too. That's because very few (12 percent) health plans cover unlimited outpatient treatment for mental illness, and nearly half of all plans limit benefits to 30 or fewer visits with a professional, such as a psychologist, psychiatrist or other counselor per year.

The bottom line: as you compare health plans, take the time to consider the kind of care you'll likely need in the coming year, the amount of care you've had in the past (so you can add up potential co-payment costs) and check any limits on benefits. It may take more than a few moments to do, but you could end up saving yourself a lot of hassle and more than a handful of money. Top of page