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Very soon many of us will face open enrollment for our health insurance benefits. Plan decisions need to be taken seriously as we risk not only dollars we pay into premiums, but also dollars we pay as our share of the claims we incur. So how do we best determine which plans to choose? Rich or lean, high deductible or copay based, closed network or open?

In this post I would encourage us to ponder how we have historically used our health insurance benefits. Are we frequent users or rare visitors into the system? If we are regular users is it for all services or just one area of benefits?

I hope that most of us have preventive visits annually which are now covered through federally legislated benefits. But how many more visits do we have each year that are not preventive? And what is the billed cost of each of these?

Prescription expenses are often easy to pinpoint as the retail cost of each drug is listed on the package in which it is delivered. Yet our focus on the copay cost prompts us to disregard the actual prescription expense.

Armed with the facts relative to recurring costs and frequency of these services we can start to assess which style of health insurance plan will best suit us. If we have difficulty determining the costs of various services we have used, we have only to look back at the Explanation of Benefits statements we receive from our insurance company. We may have misplaced hard copies, but electronic copies are available to us online at the carriers’ websites.

It is paramount that we get in touch with the actual costs of the services we use not only for purposes of budgeting, but also to calculate which plan design is best suited to our needs.

In the next post I will review how to apply our recurring cost information to different plan designs. We cannot predict unexpected claims, but by analyzing the expenses we have year to year we should be able to make a good faith determination of how best to spend our premium dollars. Premiums for higher deductible plans will be less costly than richer plans, but our apparent additional costs when we use benefits may not be so much greater as they initially appear to be.

Please check my next post for examples of ways to determine where the risk / reward factors fall and how to make your own determinations. Contact us at Czajkowski Dumpel & Associates, Inc. – we are here to help you!