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Rx for finding right health plan

Updated: May 3, 2013 12:14PM



Last week's column mentioned the importance of the "open enrollment" period for corporate health plans, and generated a few questions. In fact, many employees spend only a few minutes reviewing their options, and this year-end task gets relegated to the bottom of the "to-do" list. That could be an expensive mistake.

So this week's column offers some resources for those who would like to make informed decisions about their employer's health plan alternatives, but simply don't know where to start.

It's worth spending the time to understand your options, because your company might have added new choices, including a Health Savings Account. Or your plan might have switched PPO (Preferred Provider) options, eliminating your favorite physician from the list. Or your own personal and family health needs might have changed, as you age or with the birth of a child, so that a different portion of the company's health care plan might be better suited to your needs.

Choices might include:

HMO: Health Maintenance Organization. On the plus side, the costs are low, with one fixed or a very low payment required for office visits. On the minus side, you will be limited in your choice of physicians and specialists. And the HMO must authorize diagnostic tests.

PPO: Preferred Provider Organization. You'll have your choice of a wide range of physicians in the plan -- and might be able to choose a provider outside of the plan, if you pay for a substantial portion of the cost. You might be required to pay larger out-of-pocket expenses for co-payments and diagnostic tests, or a higher monthly premium will be deducted from your paycheck.

HEALTH SAVINGS ACCOUNT. You set aside money on a pre-tax basis to pay for health care expenses throughout the year. If you don't spend the money, you may roll it forward on a tax-deferred basis, to help with future medical expenses. The plan probably gives you a wide choice of providers, counting on your willingness to choose the most cost-effective course of treatment.

After examining the company's choices, you have to set some priorities, and decide which plan is appropriate. Some of those priorities might include:

**Choice of physicians, hospitals and other providers

**Cost of premiums, co-payments and "out of pocket" expenses

**Coverage for prescription drugs

**Wellness program coverage

**Tax advantages

If you're still confused about those choices and how they meet your priorities, there's plenty of help online. Many of the most informative sites are offered by health insurers. They have both the money and the vested interest in creating educated health care consumers, so they're worth checking out in spite of the abundance of logos!

Humana offers www.FamilyHealthBudget.com to help you calculate how much you're really spending on health care, when you include premiums and out-of-pocket expenses.

This site will help you take a realistic look at costs, no matter whether you are covered by your employer's plan, a spouse's plan or Medicare. And there's advice even if you don't have insurance coverage. Plus, you'll find in-depth explanations of the kinds of plans mentioned earlier in this column.

Aetna serves up www.PlanforYourHealth.com, which offers both a "health benefit priorities" tool and a "health expense calculator." The link to Navigating Health Benefits on the home page is especially useful in this open enrollment period to help you make choices based on premium costs, co-payments and plan limitations.

Unfortunately no one has developed the perfect tool to make the decision for you. That still requires your own logical thinking.

But you can't make a sensible decision if you don't take the time and make the effort to carefully examine your choices. And that's The Savage Truth.

Terry Savage is a registered investment adviser. Distributed by Creators Syndicate



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