Open Enrollment is coming

The Medicare/Medicare Advantage Open Enrollment starts this weekend.

The Exchange/Individual Market Open Enrollment starts on November 1st.

My job’s open enrollment starts in ten days.

We are entering Open Enrollment Season.  Open Enrollment is when people can start coverage or change their policies with the least amount of hassle and restrictions.  There are special enrollment periods during the course of a year when life happens and circumstances change, but most people will sign up for their coverage once a year during Open Enrollment.

Each type of insurance will have their own flavor of open enrollment.  Duke University provides a small curated list of choices for me.  Medicare and Medicare Advantage will have a different list of plans offered by different insurers than the ACA Exchanges in Orange County, North Carolina.  But there are a few things that people should remember as they try to make their choices.

  1. Accept  that you will not make a perfect choice
  2. Aim to make a good choice
  3. Assess your probable health situation
  4. Know your ability to take a financial hit
  5. Ask for help

The research shows that people will choose dominated plans.  A dominated plan is one where on all salient characteristics there is at least one plan that beats the dominated plan on all characteristics.  This happens in Medicare, it happens in employer sponsored insurance and it happens on the Exchanges.  Choice is tough and health insurance choice requires making multiple projections with high variability under uncertainty and imperfect information while trying to read through jargon. I do this for a living and I get confused.  So we should not aim for an optimal choice but a satisficing choice where we aim to make a good enough decision and accept that we might be leaving something on the table.

The big challenge in open enrollment is figuring out what your possible health could be for the next year and your ability to take a hit.  For some people, it is easy, they know they have a significant chronic condition today and will continue to have that same condition throughout the following year.  At that point their search system is to find the lowest total cost plan(premiums plus out of pocket maximums) that contains their doctors and hospitals and whose customer service does not sound like fingernails scratching on a chalk board.

For most people, their decision making system is fuzzier.  I think that I will have fairly low utilization next year, I think my family will have fairly low utilization.  Duke offers two versions of a narrow network plan.  The lower premium version has higher out of pocket costs than the higher premium version.  The premium plus cost sharing math works out to be that the lower premium version is better as long as no one in my family has a $20,000 to $50,000 event.  Given our ages and our medical histories, I don’t think we’ll hit those red zones.  The bigger networks on the more expensive plans don’t offer much value to us as we’re relatively healthy and we have a comprehensive academic medical center as the flagship hospital in our narrow network.

There are a lot of assumptions bundled into the choice of one plan among a very short curated list of plans that I need to decide on.  The next biggest challenge is figuring out what type of one type hit you can take? The bigger the hit you can take, the less comprehensive coverage you really need.  Bigger deductibles are a plausible way to lower premiums if individuals have the ability to actually face a $2,000 or $3,000 or $7,000 bill without wrecking their lives.  At that point it is a trade-of between lower guaranteed costs and higher potential losses.  Other people can’t take that hit so they are constrained to buy more protection.

Finally, ask for help.  This stuff is confusing.  Talk with HR, talk with insurance brokers, talk with navigators.  Spend some time and map out scenarios and figure out what things are acceptable to you and what things must be avoided.



10 replies
  1. 1
    maye says:

    Does anyone know how Kaiser works? i.e., if I have Kaiser in California, can I use it in another state’s Kaiser facility or doctor without being out-of-network? Or does it penalize me with out-of-network just like all the other companies?

  2. 2

    @maye: Call their customer service center and ask that question. I don’t know

  3. 3
    martian says:

    Thanks for the heads up. I can think of some homework I should do to prep for the decision.

    Enrollment is always an ordeal. My daughter’s specialists and my specialists are literally never on the same plan, so we try to alternate years. Last year it was really difficult to nail down what insurance certain specialists were accepting for some reason. My surgical oncologist’s office said everything was in flux? And my daughter’s orthopedic surgeon wasn’t covered by any plan on the exchange. Bleh.

    There’s no point in complaining since Obamacare’s continued existence is almost a miracle at this point, but I’m really looking forward to the day a Democratic majority in a functional government can get back to ironing out the problems in the system.

  4. 4
    martian says:

    Uh oh. I think I’m in moderation for saying a naughty word over and over: spec**lists. I thought the spam filter was more sophisticated than that now. Oops.

  5. 5
    gvg says:

    Sigh, just got out of division meeting where it was announced Avmed insured will be automatically switched to Aetna unless they choose differently. I don’t know why yet but I assume Avmed isn’t availble next year. I have been with them 23 years since I started. 19 years of good health and no reason to know if they were really any use, then I got cancer and had no insurance problems at all and such small costs I didn’t need to deduct on taxes. I now don’t want to change. will have to find out who my doctors take and all that. I am lucky I know.
    University of Florida usually has at least 4 good choices.

  6. 6
    Monala says:

    A dominated plan is one where on all salient characteristics there is at least one plan that beats the dominated plan on all characteristics.

    A dominated plan is one that beats the dominated plan? ??? Can you explain this better?

  7. 7
    Princess Leia says:

    My Blue Shield plan has changed their outside of network out of pocket max from 5k to 20k. I recently had a colonoscopy with an in network doc at an in network surgery center. I got billed for an out of network anesthesiologist who I neither knew nor chose. Is there any way to prevent being treated by an out of network provider while I am in a hospital or having out patient surgery? And does this kind of thing mean a plan like Kaiser Perm is a more prudent bet if I can;t take an unwitting 20 K hit?

  8. 8
    Another Scott says:

    @Monala: In case David-Richard is away…

    It seems to be an economics term. E.g.:

    Asymmetrically dominated choice problems are understood as follows: Suppose there is a choice between a safe lottery S and a risky lottery R. Then a second choice problem, also consisting of a safe alternative S′ and a risky one R′, risky-dominates the first problem if R′ dominates R and S′ is dominated by S. Analogously, a third problem, consisting of a safe alternative S″ and a risky one R″, safely-dominates the first one if S″ dominates S and R″ is dominated by R. Our hypothesis is that in the presence of a risky-dominating choice problem alternative R (S) looks less (more) attractive, leading to a higher fraction of S choices. The opposite should hold in the presence of a safely-dominating choice problem.

    IOW, as I understand it, “dominated choice” means there is something about the thing that makes it more popular. So a “dominated plan” is one that has something about it that makes the choice be more popular than it would be “if all else were equal”. So, at least one thing is driving that choice.

    I agree that it’s jargony jargon, but such is life these days.

    HTH. Corrections welcome.


  9. 9
    Yutsano says:

    I’m a bit surprised I haven’t gotten the flood of e-mails about my BENEFEDS renewal yet. But as I am considering changing both eye doctors and dentists it seems worth looking into.

  10. 10
    Daddio7 says:

    I am on Medicare and decided to try a doctors assn near my home. They are a provider for Humana. Turns out they cover my part D and drug plan for FREE! Office visits and routine lab test are free. I save almost $200 a month. I pay nothing for this coverage, I keep waiting for the other shoe to drop.

    Well, one shoe is my wife still works. If she loses the ACA subsidy her Blue Cross premium will be one third of her pay. If we include the cost of the medication she needs that they do not cover it jumps to 40%, ouch.

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