How to Select a Health Plans

Kevin McCormally: I am Kevin McCormally of Kiplinger's. I am here with Kim Lankford, the Insurance Editor of Kiplinger's Personal Finance magazine to talk about open season for health plans. Kim, this is a time here that a lot of employers, let their employees pick which health plan they want. Is not anything new this year? Kim Lankford: Well, as expected premiums continue to rise, but there are also some hidden ways that employers have been increasing your cost that you really need to be careful about. Kevin McCormally: What do we need to watch out for? Kim Lankford: Well, one thing that they are changing is going from co-payments to Coinsurance. With the co-payment, for example, you would pay about $10 per doctor visit. Now you pay 10% that really encourages people to become good health care shoppers. Kevin McCormally: But how do you become a good shopper for the right policy? Kim Lankford: Well, that's the most important thing. You can't just look at premiums, you also have to look at your out of pocket expenses for doctor's visits, prescriptions, drugs and things like that. Kevin McCormally: Is there anything else that the employers are doing? Kim Lankford: Well, some employers are also offering a choice that looks like it has a lower premium, but also has a lower coverage levels and that can be big mistake. Some of these policies with $500,000 or less could leave you with big major expenses if you have a major emergency. Kevin McCormally: So what can you do to hold down premiums? Kim Lankford: Well, instead what you can do is raise your deductible and then look for a policy that has set at least a million dollar in coverage. Kevin McCormally: Okay, and higher deductible, of course, opens the door to HSAs or Health Saving Accounts.? Kim Lankford: That is an added benefit. With an HSA you can aside tax deductible money and then use a tax free to pay for some of those medical expenses, the co-payments, the coinsurance and the deductibles. Kevin McCormally: So in place you have got a lot o think about. Kim Lankford: They definitely do. Kevin McCormally: Thank you very much, Kim.