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Posted on Tue, Oct. 13, 2009

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Questions, answers to ponder about your health insurance

By David S. Hilzenrath

Washington Post

WASHINGTON — Confused by your insurance options this year, especially now that Congress is getting in on the act?

Her are some answers for some of the most pressing questions.

Which trends should I take into account when deciding which health insurance plan to sign up for this fall?

Employers are increasingly promoting high-deductible plans tied to health savings accounts.

Those arrangements come with potential advantages and pitfalls.

High-deductible plans offer relatively low premiums while requiring workers to pay relatively large amounts out of pocket if they seek medical services. The objective is to make employees more cost-conscious in their approach to medical care.

The plans come with ceilings on how much employees could be required to pay.

For 2010, the annual limits on out-of-pocket spending are $5,950 for individuals and $11,900 for family coverage, while the minimum deductibles are $1,200 for individuals and $2,400 for families.

Health savings accounts allow employees to set aside pre-tax dollars to cover their out-of-pocket expenses. Some employers contribute to the accounts.

The low premiums may appeal to people with low incomes. The savings accounts are most likely to benefit people who can afford to set money aside and whose incomes position them to take advantage of the tax-sheltering feature.

If I buy insurance on my own, what should I watch out for?

If you find less expensive coverage in the individual market, beware: The coverage could be thinner. Study the fine print; otherwise, if you become seriously ill, you may be shocked to discover that your insurance doesn't provide as much of a safety net as you assumed.

If you get in a dispute with your insurer over payment of claims, it might help to have an employer in your corner, though insurance brokers might serve as advocates, too.

If premiums are rising and I'm healthy, does it make sense to try buying insurance in the private market instead of through my job?

Almost never, experts say.

If you take the coverage your employer offers, there's a good chance your employer will pay most of the premium. If you buy your own coverage, you'd be forfeiting that benefit.

Before you pass up the chance to enroll in employer-sponsored coverage for the coming year, make sure you actually qualify for individual coverage.

Even if you think you're in good health, insurers may find grounds to reject you.

If my employer offers multiple options, how should I assess them?

First, take the time to study your choices. Even if you like your current plan, don't assume it will stay the same next year, says Nancy Metcalf, an editor at Consumer Reports.

Look beyond the premium at features that affect both the value of the coverage and its affordability. Are the doctors and hospitals you favor in the insurer's network? How much would you pay out of pocket for office visits, hospital stays and drugs? Find out how each plan would handle any medications you take regularly.

Note the difference between co-payments, which are fixed amounts you pay out of pocket for certain items, and coinsurance, which requires you to pay a percentage of the bill.

What services, if any, require advance approval by the health plan?

Are there annual or lifetime limits on what the health plans would pay? Are there limits on what you could be required to pay? Are any expenses excluded from such limits? For example, do co-payments and deductibles count toward your out- of-pocket limits?

Figure out how the competing plans would cover any predictable medical needs, but don't stop there. Plan out what would happen if you suffered a catastrophic illness or injury and suddenly required hundreds of thousands of dollars of coverage.