Open enrollment season.
Those three words can conjure up images of long and boring HR presentations, endless forms to fill out, and hard-to-decipher health insurance fine print.
And let’s be honest—these days, health plan changes are rarely for the better.
According to a 2016 Segal Health Plan Trend Cost Survey, medical costs will increase for most medical plans, with Fee for Service plans expected to rise 10.4%, and high deductible and Preferred Provider Organization plans rising about 8%. Prescription drug costs are also expected to jump by double digits.
To help keep your blood pressure from rising during this year’s open enrollment period, we asked benefits pros to give us the scoop on four key changes on the horizon in 2016.
1. Your Medical Costs Will Probably Go Up
If there’s one thing that most pros agree on, it’s that your total medical costs—insurance, doctor’s fees, prescriptions, tests and other expenses—are expected to rise.
If you have coverage through your employer, you’ll probably see an increase because many companies are being hit with higher costs—and they’ll raise what employees pay to help manage them.
In addition to rising premiums—which will increase about 4.2% for 2016, according to the Mercer’s National Survey of Employer-Sponsored Health Plans—there are other numbers to worry about.
Elisabeth Russell, a patient advocate and president of Patient Navigator, LLC, explains that increased out-of-pocket costs are all but inevitable in 2016—and have been building for some time.
According to the latest Kaiser Family Foundation analysis of employer health benefits, average deductibles have risen 255% since 2006. And a recent Consumer Reports study shows that prescription expenses have also skyrocketed—some people surveyed saw their monthly costs spike from $39, on average, up to $100 and more.
“One of the goals of the Affordable Care Act was to force consumers to have more skin in the game,” Russell says. “[As a result], perhaps your premium may more or less stay the same or increase by a small percent, but your deductible and copay will probably go up.”
It’s a way to control medical costs, explains Russell, since some consumers may think twice before heading to the doctor if the copay is now $195 and the deductible is $7,000.
What to Do About It: While you can’t prevent these escalating costs, you can help protect yourself from unexpected surprises by reviewing all of your plan options—including premium fees and out-of-pocket costs not covered—to pick the plan that makes the most money sense for you and your family.
“During open enrollment season, be sure to carefully review what your insurance plan offers—the formulary (what drugs are covered and in what tier), deductibles, copays and coinsurances,” suggests Russell. “Scrutinize what the different plans offer. And think not only about what medications your family needs now but what you might anticipate in the coming year.”
You can also consider signing up for a Flexible Spending Account (FSA) or a Health Savings Account (HSA), so you can take advantage of tax savings.
A Flexible Spending Account (FSA) is a pretax savings account that you can tap to cover certain deductibles, prescription eyeglasses and other qualified out-of-pocket costs. But there’s a caveat: You have to use the funds within a set time period, or you could risk forfeiting that money.
A Health Savings Account (HSA) is a medical savings account for people with a high-deductible insurance plan. An added feature of HSAs is that your pretax or tax-deductible contributions can rollover for years.
An added tip to help keep prescription costs in check: Whenever you go to the doctor, ask if a generic option is available, says Russell.
“Also compare prices at different pharmacies, especially the big-box stores, which try to find ways to offer medications at lower prices,” Russell adds. “And see if mail order service is available through your insurance company, which could save you money.”