Health-insurance lowdown

Health insurance is a lot like health care—it’s full of acronyms and specialized terms, its costs vary, and one size doesn’t fit all. As a result, December can be a particularly tricky month, because this is when many employers hold open enrollments and individuals elect to get coverage for the coming year.

How should Butte County residents ensure they’ll get the right insurance? The CN&R talked to some local experts to find out.

The bottom line, expressed concisely by Michelle Niven, human-resources specialist at Allevity HR & Payroll in Chico: “It’s going to depend on your individual needs.”

Some people need intensive medical care. Others hardly ever go to the doctor. Some can afford high premiums in exchange for low deductibles and co-pays. Others can afford only a high-deductible policy.

It’s important to take an inventory of personal and family patterns before diving into policy or plan information guides.

“A lot of people take what the cheap thing is and forget to think, ‘Am I going to go to the doctor?’” said John Dahlmeier, president of the Dahlmeier Insurance Agency in Chico and Oroville. “A good example is if you have a family—the kids are going to get sick from going to school and being around everybody, and you’re going to take them to the doctor a lot more.

“That’s where you look at what the deductibles and co-payments are. You may want to pay a little more up front [in premiums], which will save you in the long run.”

For individuals who don’t go to the doctor much, Niven highlights a type of policy known as an HSA—health savings account. It’s a low-premium, high-deductible plan in which the subscriber places pre-tax earnings into a savings account from which she or he can withdraw money to cover medical, dental and vision expenses.

Unlike an FSA—flexible spending account—that also banks pre-tax money, an HSA balance doesn’t expire at the end of the year, so the subscriber can build up a hefty reserve during healthy years in the event of a medical bill down the road. Plus, an HSA offers catastrophic coverage even if the account balance is low.

“I describe a health savings account as more of a consumer-driven health plan,” Niven explained, “because you pay, dollar for dollar, whatever the negotiated rate is for prescriptions and office visits up until you hit the deductible—and at that point you are covered. … Because you’re responsible for those dollars, you are going to want to research your medical care much like buying a new car.

“Most of us aren’t going to walk onto a lot and buy the first thing we see. We’re going to research who’s got the great financing, who’s got the great deals out there. I feel if you’re going to be a good user of the HSA, you need to approach your medical care similarly.”

For instance, if your doctor recommends a hospital procedure, you may wish to check with Enloe Medical Center, Feather River Hospital in Paradise and Oroville Hospital—not just for their rates but for their successful outcomes.

“I often joke that if you’re a hypochondriac, an HSA is not for you,” Niven said, “unless you can fully fund your HSA to the legal limit of that year and draw on it when you need it.”

Besides your health history and balance sheet, other considerations will determine what policy—or carrier—is right for you.

A key criterion is the provider network; that is, the list of doctors who accept that particular insurance. “You could sign up with XYZ plan,” Dahlmeier said, “and find out they have only one doctor, and the doctor doesn’t have any appointments.”

He continued: “Kaiser is a good plan, for example, but they’re not up this way [in the North State]—so you could join Kaiser, but you’re going to have to drive down to Sacramento to get health care.”

Another consideration is timing. Even at a company with open enrollment, the start date of the policy rarely coincides with the day you sign the paperwork. The delay can be months, particularly for someone establishing an individual policy that requires underwriting.

“Plan ahead,” Dahlmeier said. “You can’t really come to an insurance company and say, ‘My house is on fire, so I need insurance for my home.’” It’s the same with health insurance.

Finally, look carefully at the plan’s coverage for prescription drugs. Some plans count medicines as part of the medical-care deductible; others have separate deductibles for drugs and office/hospital visits. By the same token, check to see if there’s a difference between individual and family deductibles, as well as the difference between deductibles and out-of-pocket maximums.

“I think you want to talk to somebody—whether it’s an agent, a company person or an HR consultant where you work—to help work through those waters,” Dahlmeier suggested. “It can be a little muddy, and when you have choices, there are a lot of issues that need to be thought about.

“I don’t mean this to sound bad, but most people just look at how much they can afford and how they can save money. The economy is still in a difficult position, and health care is a large cost. But it could be a lot larger if you’re injured and don’t have any health insurance.”