Health insurance shoppers, be wise

by Lesley Politi on November 4, 2008

Health insurance shoppers, be wise

Published Monday, Nov. 03, 2008

You thought figuring out your ballot on Election Day would be tough.

But another Decision Day looms for millions of workers across the land: open enrollment elections.

For those fortunate enough to have health insurance, let the head scratching begin: Option 1 or Option 2? Routine, Choice or Select? PPO or HMO?

Experts say the year-end ritual is an oft-neglected process that deserves focused consideration from consumers, many of whom race through the insurance paperwork with utter terror.

Their decisions have far-reaching consequences.

“It can become a very expensive mistake if they go eenee, meenee, mynee, moe,” said Patricia Feathers, a customer service agent at Placer West Insurance Services in Lincoln. “Making the right choice means staving off bankruptcy and getting the right coverage.”

Feathers has been fielding plenty of calls lately, many from employees of small firms that don’t have their own human resources departments.

“We’re getting phone calls from employees who say they can’t understand their choices,” she said.

Nearly three in five plan to spend less than an hour – or perhaps no time at all – reviewing their health benefits during open enrollment, according to a survey conducted on behalf of the Financial Planning Association and Aetna, which provides health insurance to 37.2 million people.

About a quarter of those surveyed said they were likely to make changes to their benefits during open enrollment.

An ill-informed decision during open enrollment is usually locked in for a year, sometimes more – though most plans allow modifications because of changes in family status such as marriage or a new child.

But only one in 10 people express confidence in their understanding of their health coverage, according to another survey by the insurer CIGNA, which serves 20,000 customers in the capital region.

“Sometimes, it’s as if people make decisions blindfolded because it’s too hard to agonize,” said CIGNA spokeswoman Gloria Barone.

Health costs are rising – premiums and out-of-pocket expenses are expected to increase anywhere between 5 percent and 10 percent, according to industry analysts.

Over the past decade, premiums across the country have more than doubled, according to a recent Kaiser Family Foundation study. On average, workers contribute $721 yearly for single coverage and $3,354 for family coverage.

“When I talk to people, the problem over and over again is that people don’t have the knowledge they need to make an informed decision,” said Karen Kocher, CIGNA’s chief learning officer.

She suggested consumers do their research, including going online to such Web sites as The site was developed by CIGNA.

“What’s surprising is that most workers don’t take the time to be savvy health care consumers,” said Sara Taylor, an analyst with Hewitt Associates.

Employees often “default into their existing plans, opt for the cheapest plan, thinking they will save money in the long run.”

The better strategy, experts say, is to have a realistic assessment of health care needs, including an honest look at where health care dollars were spent in the previous year.

Before picking an option, know what’s included and not included. A low-cost, high-deductible plan may not always be the right choice.

If need be, open a flexible spending account – a pre-tax pool of cash that can be used for out-of-pocket expenses, such as co-pays, deductibles and over-the-counter purchases, not usually paid by insurance. There are other pre-tax medical account options.

Of course, it could also mean reducing waste by making sure you set aside only what you need. Any money left in a flexible account won’t be returned.


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