Choosing Health Insurance Plans: Key Considerations for Enrollment

Choosing the right health insurance plan requires analyzing premiums, medical needs, employer incentives, and tax benefits.

### Choosing the Right Health Insurance Plan During Open Enrollment
* 📝 To make an informed decision about health insurance, start by listing your **doctors**, any **prescriptions**, and upcoming medical needs, such as **family planning** or **necessary tests as you age**.
* 💼 It's crucial to determine how much subsidy your employer contributes towards your health plan, as some employers offer **comprehensive insurance at minimal cost** while others provide **less support**.
* 📊 Compare the premiums of different plans, noting that **healthcare costs can be unpredictable**, but families often have **consistent spending patterns over time**.
* 💡 Here's a simple representation of how you can structure the spreadsheet with two columns to evaluate the **premium costs** of the Cadillac plan versus the high-deductible plan:
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| Plan Type | Premium Costs |
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| Cadillac Plan | **Higher Premiums** |
| High-Deductible Plan | **Lower Premiums** |
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You can expand this table with additional rows if you want to include **more factors or details** regarding each plan.
* 🔍 Assess your projected medical usage by considering how often you visit doctors and what medications you take to estimate your **potential expenses under each plan**.
* 👶 For high healthcare spending years, such as having a baby or major surgery, the Cadillac plan might be **more beneficial**, while healthy families may find the high-deductible plan **more economical**.
* 💰 Don’t forget to factor in employer incentives like **contributions to health reimbursement or savings accounts** and calculate potential **tax savings from HSAs**.
* 🔄 This process should be repeated **annually during open enrollment** to ensure you are choosing the **best plan based on your current health and financial situation**.

Open enrollment for health insurance is active for him right now. We currently have my spouse's premium plan through her work, but we are considering switching to a high-deductible health plan so we can get an HSA. How do you choose? How do you make this choice? You kind of started...

to touch on it. We were talking about kids just now, but can you speak a little bit more to that to help out Jeremiah and anybody else who's going to do open enrollment? You were so much better at details. I'll give the broad strokes, and then you

can kind of clean it up.  First, Jeremiah, you need to write down who your doctors are, if you have any prescriptions, if you have any upcoming medical needs—whether you're doing family planning or if you've reached a certain age that

requires additional medical tests and things like that. Just write all these things down so you have all the factors that are going to play into it. And then you also need to find out how much subsidy your employer is giving you, because we've seen employers

that give you what I would perceive as Cadillac insurance for practically free because they're absorbing all the cost. Then there are other plans where the employer's portion is much smaller. Then you need to compare and contrast the

premiums for the different plans. When it comes to healthcare, none of us know exactly what's going to happen next year. We can't plan for those ER visits or urgent care visits, but I think what

We found that for most families, it's fairly consistent through time. You don't know what it's going to be, but you can have an idea. And if you have an idea of your health care spending throughout the year, open enrollment should be kind of a

fun time. And this is the way that I approach it, and this is the way I tell clients to approach it: You want to open up a spreadsheet, and you're going to have two different columns.  There are really four things that you want to look at to determine which plan you should

choose, and it really comes down to mathematics. Thing number one is the premium: How much does this Cadillac plan cost me, and how much does the high-deductible plan cost me? Okay, there's number one. Number two: Based on my medical usage, how often do I go to the

doctor? What kind of doctors do I go see? What kind of medication—all that stuff. You have to project out: Okay, if I do these things next year, how much will I have to spend if I'm on the Cadillac plan? How much will I have to

spend if I'm on the high-deductible plan? Well, obviously, in very high health spending years—like in years that you have a baby or have major surgery or whatever—the Cadillac coverage may make the most sense. But if you're a young family or a healthy family, or not a big

healthcare user, odds are your healthcare costs are going to be pretty low, so that's not going to—uh, it's not going to be substantial on that plan. Third thing: Employer incentives. Does your employer put money into a health reimbursement account or health savings account for

You and then lastly, your tax savings. If I do the HSA and I get a tax deduction, how much accrues to my ledger? Well, you take those four rows and just add them up.  Mathematically, you figure out, oh wow, if I do the Cadillac plan and I have

a baby this year, I'm going to come out way ahead. Or, man, if I don't use a ton of medical healthcare and I don't have anything outside of just normal procedural stuff and I max out the HSA and I get the tax savings, I'm going to

come out a lot better. I would literally line up those four rows, do the math, and I would repeat that process every single year at open enrollment. That's the way that I do it.

How To Choose a Healthcare Plan

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Choosing Between Health Insurance Plans During Open Enrollment

Open enrollment for health insurance is currently active.

Consider switching from a spouse's employer plan to a high-deductible plan with an HSA.

List current doctors, prescriptions, and upcoming medical needs to factor into the decision.

Determine the amount of employer subsidy for health insurance.

Compare and contrast premiums for different plans.

Compare premiums for different plans (Cadillac vs. high-deductible).

Project medical expenses for the year for each plan type.

Consider employer incentives (HRAs or HSAs).

Compare total costs (premiums, projected expenses, employer incentives, and tax savings) for each plan.

Repeat this process annually during open enrollment.