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.”
2. Your Doctors May Not Take Your Plan
Another potential challenge to navigate in 2016 is that your favorite doctor or hospital may no longer be a part of your insurance network.
Network participation is a contract negotiation between the doctor or hospital and the insurer, “and if medical providers are unhappy with reimbursement rates, and insurers won’t give them what they want, then either side might choose not to renew the contract,” Russell explains.
Finding fewer doctors on your plan is particularly common for policies purchased through the government health care exchanges. A recent study by Avalere Health found that there were 34% fewer hospitals and doctors available through the exchanges, compared to plans sold outside of them.
What to Do About It: So how do you know if your doctor or hospital takes the plan you’re considering?
You need to do a little research.
But instead of relying on potentially outdated lists on insurance company websites, Russell suggests calling your insurance company—in addition to calling each and every doctor’s office to see if they take the plan.
And do it more than once.
In fact, Russell says it’s a good idea to keep confirming network participation up until the time you actually enroll—just to be sure.
3. Domestic Partner Benefits May Be Changing
Many companies that offered health benefits to same-sex couples are likely reevaluating their offerings following the Supreme Court ruling in June that legalized same-sex marriage.
If, for example, a business requires heterosexual couples to be married in order to get benefits, many are now requiring the same for gay couples.
What to Do About It: Schedule a one-on-one session with your benefits representative to review your options and any coverage changes.
But the good news is that while some companies are rescinding domestic partner benefits in 2016, they’re offering same-sex partners a grace period to get married first, says Todd Solomon, a partner at McDermott Will & Emery and coauthor of “Domestic Partner Benefits: An Employer’s Guide.”
“They recognize that couples need an adjustment period and may not just jump right into marriage, so they’re giving them some time,” Solomon says. “Deadlines of January 1, 2016, and January 1, 2017, are pretty common.”
Work for an employer that offered domestic partner benefits to both same-sex and opposite-sex couples?
“Companies in that boat haven’t changed much and have left their benefits pretty much as is,” Solomon says.
Another thing to keep in mind: Spousal health benefits aren’t currently taxed as income the way domestic partner benefits have been. So regardless of orientation, if you’re married and take advantage of spousal benefits for your husband or wife, you won’t be taxed the way you were for domestic partner benefits.
4. New Insurance Codes Could Lead to an Uptick in Rejected Claims
There’s a sea change happening in how doctors and hospitals will need to submit their insurance forms in the coming year.
On October 1, 2015, the medical community shifted from the current set of insurance codes in use for about 30 years—called ICD-9—to a new set of ICD-10 codes.
As a result, according to the CDC, the number of code options will increase fromaround 17,000 to about 140,000, when you factor in the various diagnosis and procedure codes.
The expanded coding system allows for more specific data about a condition—getting bitten by a cow (Code W55.21) is different from getting a nasty squirrel bite (W53.21XA)—but the headache this massive switch could cause is obvious.
A survey from The Workgroup for Electronic Data Interchange (WEDI), a nonprofit focused on the use of technology in health care, found that about 50% of doctors said they wouldn’t be ready for the change when it launched.
“It’s a catastrophe waiting to happen,” Russell says, adding that the volume of clerical errors is going to increase, which will likely result in delayed reimbursements.
What to Do About It: Given this change, it’s now even more important than ever to review your medical bills—particularly the explanation of benefits you receive from your insurance company.
For starters, Russell recommends never sending a payment if the amount due numbers on your provider’s statement and the insurance information don’t align.
“Make sure you have both the explanation of benefits from the insurance company and the bill from your doctor,” she says. “If the numbers in the ‘amount you owe’ column matches on both statements, then you’re good to go.”
So what happens if totals don’t match, or if a code has been rejected and your claim has been denied?
Russell says you should call the doctor’s billing office and give them the information on the insurance company’s explanation of benefits, along with the rejection code explaining why it was denied. Then ask them to check the code they used to make sure it was the correct one.
“It’s often a clerical error with the code that was submitted,” explains Russell. “In most cases, the provider will be willing to resubmit the claim with the correct information.”
If that doesn’t solve the problem, contact the insurance company to confirm that the claim is being denied—at which point you can appeal.
Thanks to the Affordable Care Act, there’s a more transparent appeal process in place. That said, you need to make sure you follow the directions to the letter, says Russell, and meet all deadlines, since there’s a limited window in which you can appeal.
According to Russell, many denied claims are never appealed, so it’s worth it to try. And if your appeal is denied, you can ask for an external reviewer to assess the claim.
In other words, says Russell, “don’t just give up.”
LearnVest Planning Services is a registered investment adviser and subsidiary of LearnVest, Inc., that provides financial plans for its clients. Information shown is for illustrative purposes only and is not intended as investment, legal or tax planning advice. Please consult a financial adviser, attorney or tax specialist for advice specific to your financial situation. Unless specifically identified as such, the individuals interviewed or quoted in this piece are neither clients, employees nor affiliates of LearnVest Planning Services, and the views expressed are their own. LearnVest Planning Services and any third parties listed, linked to or otherwise appearing in this message are separate and unaffiliated and are not responsible for each other’s products, services or policies.
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