Consumers face confusion when picking health plans

by Lesley Politi on December 2, 2008

NEW YORK (AP) _ Millions of people are receiving letters in the mail this month notifying them of the open enrollment period for their health care plans — the period when they can change their coverage for next year if they act by a certain deadline. And that deadline might be one of the few things in the letter that is easy to understand.

If you’ve received information about open enrollment that isn’t clear, there are a number of sources you can turn to for help. One place to start would be your health insurance company’s Web site.

For broader information, look to a number of online resources. America’s Health Insurance Plans and the federal government’s Agency for Healthcare Research and Quality put together a consumer guide, “Questions and Answers about Health Insurance,” which can be accessed on the group’s Web site,, and then found by clicking on “Consumer Information.”

A similar effort prepared from the consumer perspective, “The Managed Care Answer Guide,” can be found on the Web site of the Patient Advocate Foundation,, by clicking “PAF Publications” on the home page.

Judith Stein, executive director of the nonprofit Center for Medicare Advocacy, said seniors using the government program need to make sure they understand their choices, especially for Medicare’s Part D prescription drug program and for Medicare Advantage coverage, which is private insurance that takes the place of the government coverage.

“People need to make a choice every year because the plan they’re on this year may well not be best for next year,” Stein said. Moreover, different plans can cover different treatments and drugs, and need to be examined before they are picked. “You cannot just choose on the basis of premium,” she said.

Medicare open enrollment runs from Nov. 15 to Dec. 31. Seniors can find information about Medicare’s various plans at or by calling 1-800-MEDICARE.

There are several nonprofit organizations that also offer helpful information regarding Medicare coverage requirements and definitions, including Stein’s group, which can be found online at or by calling 860-456-7790. AARP also offers an interactive tool at that helps answer questions about the government program and a separate guide to the prescription drug program under Medicare Part D.

Seniors who do not have access to the Internet should seek assistance when trying to decide, Stein said, because it can be difficult to choose without using Medicare’s online plan finder.

Some of the common terms you need to know as you’re choosing your health coverage are:

— Creditable Prescription Coverage — A term used to describe third-party prescription drug coverage, typically from an employer or union, that is at least as good or better than Medicare’s standard prescription coverage. Retirees or people who are old enough to qualify for Medicare may get a letter that states whether their employer’s or union’s plan provides creditable prescription coverage, and allows them to make a choice to stay in that plan and not to enroll in the Medicare drug plan.

— Coinsurance — A provision under which both the insured person and the insurance plan share charges for covered health care in a specified ratio, like 80 percent by the insurer and 20 percent by the individual. In many plans, coinsurance payments start after the insured person has paid their deductible, a set amount they must pay each year before insurance coverage kicks in.

— Co-payment — The amount an insured person must pay to visit a provider or have a prescription filled. The amount, or amounts, are spelled out in an insurance plan and don’t vary based on the charges, the way coinsurance does.

— Formulary — The list of drugs covered by an insurance plan.

— Health Savings Account (HSA) — A tax-free savings account for people who have high-deductible insurance plans for medical expenses. These are similar to a Flexible Spending Account, but can be set up by individuals or employers, and the money can roll over and accumulate if not spent.


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