A Yearly Health Insurance Review

Health plans change every year even when you change nothing. Premiums rise, deductibles move, a hospital leaves the network, a drug moves to a higher tier, an employer cuts its HSA deposit. Most people renew automatically and find out at the pharmacy counter or in the emergency room. This chapter turns everything in this book into one routine you can run each fall in a couple of hours, plus the events that should make you run it again mid-year.

Know your windows

You can only change coverage at certain times, so the first step is knowing which window applies to you.

Outside these windows, only a qualifying event opens a special enrollment period, covered at the end of this chapter. Put next year's windows in your calendar now, with a reminder two weeks before each opens so the review is not squeezed into the final days.

Step 1: look back at the year you had

Start with facts, not guesses. From your insurer's member portal, download the year's claims or Explanations of Benefits. From your own records, collect premiums, pharmacy receipts and any HSA or FSA statements. Then total:

• premiums paid
• what you paid for care: deductible, copays and coinsurance
• whether you reached the deductible or the out-of-pocket maximum, and in which month
• how many visits of each kind, and every regular prescription
• any money left in an FSA, or forfeited

This is the "expected year" from chapter 2. A year in which you never came close to the deductible points one way; a year in which you hit the out-of-pocket maximum by spring points the other.

Step 2: read what is changing

Your plan must tell you what changes next year. Employers publish a new Summary of Benefits and Coverage for each plan; Marketplace insurers send a renewal notice; Medicare plans send an Annual Notice of Change by the end of September. Read them for five things:

1. Premium, your share after any employer contribution or tax credit.
2. Deductible and out-of-pocket maximum.
3. Network. Is every doctor, hospital, lab and pharmacy you use still in it?
4. Drug list. Is each of your prescriptions still covered, at what tier, and with any new prior-authorization or step-therapy rule?
5. Accounts. What will the employer put into an HSA or HRA, and what are the new HSA and FSA limits?

Step 3: verify the network yourself

A directory listing is a starting point, not proof. For each provider who matters to you, call their office and ask whether they will be in network next year for the exact plan name you are considering. Then confirm with the insurer, and write down the date and the name of the person you spoke to. Pay special attention to the hospital you would use in an emergency and to any specialist you see regularly. If a planned procedure is coming, ask about everyone who will bill for it, not just the surgeon, and ask whether the plan requires prior authorization.

Step 4: compare total cost, not premium

For every plan open to you, compute the three years from chapter 2: a quiet year, the year you expect, and a bad year at the out-of-pocket maximum. Include the employer's HSA deposit and the tax value of any HSA or FSA money. The HDHP vs PPO calculator does this across a range of care costs.

If you buy on the Marketplace, update your income estimate before comparing: the premium tax credit, and whether you are near the 400% line, can change the answer more than any plan feature. Chapter 5 and the ACA subsidy calculator cover this. If you are on Medicare, run your exact drug list through the Medicare Plan Finder every year, since Part D plans change formularies and prices annually.

Choose the plan that does best across the three years and still covers your doctors and drugs. If two plans are close, prefer the one with the lower out-of-pocket maximum: it protects you in the year you cannot predict.

Step 5: set next year's accounts

Enrollment is also when you set pre-tax amounts, and at most employers they do not roll over automatically.

• HSA: decide the payroll amount so that yours plus your employer's reaches what you can afford up to the limit (chapter 3).
• Health FSA: elect what you are nearly certain to spend, using step 1 (chapter 4).
• Dependent care FSA: re-elect if you will have qualifying childcare costs.
• Receipts: start next year's folder.

Keep track during the year

The review is easier when the year's records already exist. Each time an Explanation of Benefits arrives, check it against any bill before paying, as chapter 6 explains, and file both. Keep a simple running log: date, provider, what the plan paid, what you paid, and from which account. It tells you, at a glance, how close you are to the deductible, which helps time elective care in a year when you have already reached it, and it is the first page of next year's review.

Events that should trigger a review now

Some changes cannot wait for the fall. Each of these usually opens a special enrollment period, and the deadline is short: generally 30 days for an employer plan and 60 days on the Marketplace.

• marriage, divorce, or a birth or adoption
• losing other coverage, including a job loss or a child turning 26 on a parent's plan
• a move to a new area with different plans
• a large change in income if you buy on the Marketplace, so the advance credit can be adjusted (report it promptly; a change that alters what help you qualify for can also let you change plans)
• turning 65, or approaching Medicare while still working (chapter 7)

A new diagnosis does not open an enrollment window, but it is a reason to check your plan's rules for the care you now need and to plan for the next open enrollment.