Cut Your Health-Care Costs
Declare open season on hidden fees and higher deductibles during your employer's open enrollment period. Last year's choice, or the cheapest premium, may not be your best option.
By Kimberly Lankford, Contributing Editor, Kiplinger's Personal Finance
September 6, 2005
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Think you're having a tough time paying for health insurance? Your employer may be struggling too.
That's why many are encouraging employees to get their health insurance elsewhere or looking for creative ways to boost your share of the costs. You may not notice the price increases at first, but the extra costs certainly add up -- employees are paying about 125% more for their health-care coverage in 2005 than they were in 1999, a figure that includes premiums and out-of-pocket expenses, says Linda Cushman Ruth, senior health-care strategist with Hewitt Associates, a human resources consulting firm.
That's why it's so important to look carefully at all of your health insurance options during open-enrollment season this fall. The plan with the lowest premium may actually end up being the most expensive by the end of the year. Here's how to pick the best plan for your family.
Compare hidden costs
How your payments are structured will depend on the type of health coverage you choose: HMO, PPO or fee-for-service. For descriptions of these and other options, see Understand Your Health Insurance Options.
When you look at your health insurance options this year, no matter your choices, don't be surprised to see higher deductibles and greater out-of-pocket costs for:
- Prescription drugs. Many health plans introduced tiered pricing for prescription drugs -- charging a $10 copayment for generic drugs, $21 for preferred drugs and $33 for nonpreferred drugs.
- Doctor's visits. You may see lower limits on the number of visits plans will cover for mental health and other types of specialized care.
- Hospital stays. Some plans are starting to apply that tiered pricing to hospital stays -- charging a lower copayment for certain preferred hospitals.
When picking a plan, compare premiums as well as the out-of-pocket costs for your family's typical medical and drug expenses. But also compare the potential cost of catastrophic care, says Gary Claxton, vice president of the Kaiser Family Foundation.