insurance.jpgIsn’t it ironic that there are millions of people desperate to get health insurance coverage, yet many workers who have coverage don’t seem to care enough about it?

I got some surprising numbers this week about open enrollment season. You know, the time you’re supposed to go over the health insurance options your employer offers and decide what’s right for you.

Many of you don’t even know the season is upon us or when your company’s open enrollment begins. That’s according to a new survey by eHealthInsurance and Kelton Research.

The study found that:

* 45 percent of those surveyed do NOT KNOW when their company’s open enrollment period takes place.
* Over half (53 percent) said they will simply stick with the plan they currently have, going on auto-pilot at a time when they should be exploring options.
* Less than 47 percent know what they actually contribute from their salary to their premiums.
* One quarter (25%) of those with employer-based coverage report that the longest period of time they’ve ever spent reviewing their options during open enrollment was less than thirty minutes.

This is disturbing because this year employees are going to get an unhappy surprise when they finally decide to pay attention to health insurance coverage: what’s covered and what it costs.

Employees will be handing over more of their paychecks next year for health care coverage.

According to an analysis by HR consulting giant Aon Hewitt:

* The 2012 average health care premium rate increase will be 7.0 percent, which is slightly lower than the 7.5 percent mark in 2011, and on par with the 6.9 percent increase in 2010.
* The average total health care premium per employee for large companies is projected to be $10,475 in 2012, up from $9,792 in 2011, and $9,111 in 2010.
* The amount employees will be asked to contribute toward this premium cost in 2012 is $2,306 (or 22 percent of the total health care premium), compared to $2,084 in 2011 (or 21.3 percent of the total health care premium), and $1,952 in 2010 (or 21.4 percent of the total health care premium).
* Meanwhile, average employee out-of-pocket costs, such as copayments, coinsurance and deductibles, are expected to be $2,275 in 2012, compared to $2,007 in 2011, and $1,691 in 2010.

So, it’s time to figure out what you’re being offered.

I did a column a while back offering tips on choosing the best options. Here are some highlights:

Most workers spend more time comparing airline ticket prices than they do comparing health care plans, said Etti Baranoff, associate professor of insurance and finance at Virginia Commonwealth University and author of “Risk Management and Insurance.”

That means it’s time for employees to do “a cost-benefit analysis and not just look at premiums,” she said.

First, you have to figure out the basic insurance lingo:

Copay: The flat fee you pay every time you get medical care, such as a visit to your primary care physician or lab services.

Deductible: The amount you’re responsible for paying to your doctor or for hospital visits before insurance coverage kicks in.

Coinsurance: The percentage of the medical care you’re responsible for paying that the insurer does not. For example, your coinsurance for a hospital stay may be 20 percent of the total cost, while the insurer pays 80 percent.

Maximum out of pocket: No matter how much medical care you get during the year, there is a maximum amount annually that you will have to shell out. Once you hit that number, insurance typically covers all the remaining medical expenses.

The second thing you’ll want to figure out, to the best of your ability, is how much health care you expect to use next year, said Robert Slayton, vice president of the Illinois State Association of Health Underwriters.

Slayton offered some guidance:

* To compare plans, it’s always smart to take a snapshot of a year of typical care and a snapshot of a worst-case scenario. For example, employees should multiply their portion of the medical premium by 12 to annualize it. Then take the typical number of office visits and prescription costs into account and any unique factors (such as if a person is diabetic or has another chronic condition). Then take the worst-case scenario where the patient maxes out the deductible and coinsurance, plus copays, plus annual premium amount. When employees compare plans, they will get a good feel for which one they will be most comfortable with.
* If employees will be having elective surgery, they should compare reimbursements between plans to make sure there is no cap. They also need to determine if the doctor they want to use is in the plan’s network.

Physician and hospital networks in many plans will be shrinking as a result of employers trying to ratchet down costs, Slayton explained. So that means if you think your HMO or PPO is exactly the same as last year because you see little change, you still need to look closely at the network list.

Many workers mistakenly think they can save money by keeping family members off their health plan, adding individuals later in the year if they need medical care, said Roger Sevigny, past president of the National Association of Insurance Commissioners. This can’t be done, he said.

If you just can’t afford the standard PPO or HMO being offered by your company, Sevigny added, you may want to consider a high-deductible plan, which means you’ll pay less in premiums but a higher deductible. You could potentially end up paying big time in out-of-pocket costs if you fall ill, but at least a major illness won’t likely bankrupt you.

You also might be able to reduce the monthly premium or copayments on your plan by participating in wellness initiatives if they’re available at your company, said Randy Abbott, a senior health benefits consultant for Watson Wyatt, a global consulting firm..

A so-called personal wellness assessment that identifies ways to reduce your health risks could save $100 to $1,000 a year, depending on the employer, Abbott said.

One big no-no, Abbott said, is assuming the plan you had last year is the same this year or even that it’s still the best option for you.

“We find a lot of employees are overinsured,” he said. For example, a single man in good health may be signed up for a plan that offers free gynecology visits or low-cost prescription drugs. Reading the fine print of what’s covered and what’s not could mean big savings and peace of mind, he added.

Health insurance literature is “painful to read, but it’s your health,” Abbott said.

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