Open enrollment starts next week. You have three options. How do you choose?
I get this question every fall. A client sends me a screenshot of their employer’s open enrollment portal – three plans, different premiums, different deductibles, different networks. They feel paralyzed. So they default to the cheapest premium. Or the plan they had last year. Or the one their coworker recommended.
Don’t do that.
Let me show you how to use the Health Plan Comparator – a tool that cuts through the noise and shows you the real cost.
Low use: You’re healthy. A few preventive visits, maybe one sick visit, no prescriptions.
Medium use: You have a chronic condition. Regular specialist visits, a couple of prescriptions, maybe an urgent care or two.
High use: You have a major event. Surgery, hospital stay, expensive medication.
You input each plan’s premium, deductible, coinsurance, copays, and out-of-pocket maximum. The tool does the math. Then you can see which plan is cheapest for low use, which for medium, which for high. And you can see your worst-case financial risk – the out-of-pocket max plus premiums.
I remember a client – let’s call her Denise – who had three options: a PPO with a about $500 deductible, an HMO with a about about $2,000 deductible, and an HDHP with a about $5,000 deductible. The premiums were about $400, $250, and $100 per month respectively. She was healthy. She assumed the HDHP was best. Then she ran the comparator.
For low use, the HDHP was cheapest. For medium use, the HMO was slightly cheaper. For high use, the PPO was cheapest because of its low out-of-pocket max. She realized that the HDHP’s about about $8,000 out-of-pocket max would be financially devastating if she had a serious accident or illness. She had only about $5,000 in savings. She chose the HMO – a middle ground. She paid about $50 more per month than the HDHP but had a about about $4,000 out-of-pocket max.
A year later, she was diagnosed with breast cancer. Surgery, chemo, radiation. Her total out-of-pocket for the year was about $4,000. On the HDHP, it would have been about $8,000. She saved about $4,000 – and the peace of mind was priceless.
So let me walk you through exactly how to use the comparator.
Step one: Gather the numbers for each plan.
You need:
Monthly premium (what you pay, not the employer’s share)
Deductible (per person and family)
Coinsurance percentage after deductible (usually 20%)
Out-of-pocket maximum (per person and family)
Copays for primary care, specialist, urgent care, emergency room
Prescription drug tiers (copays or coinsurance)
All of this is on the Summary of Benefits and Coverage. If you can’t find it, call your HR department or the insurer.
Step two: Estimate your expected use.
Be honest. Most people overestimate their risk or underestimate. Look at the last two years. How many doctor visits did you have? Any prescriptions? Any hospital stays? If you have a chronic condition, use your actual numbers. If you’re healthy, assume low use with a small buffer.
Step three: Enter the numbers into the comparator.
The tool will calculate total annual cost for each scenario. You’ll see a table or chart. It might show that Plan A is cheapest for low use, Plan B for medium, Plan C for high. Then you decide which scenario is most likely for you – and which worst-case risk you can tolerate.
Step four: Factor in network and prescription coverage.
The comparator doesn’t know if your doctor is in-network. It doesn’t know if your medication is on the formulary. So after you narrow down to two plans, check those manually. Call your doctor’s office. Log into the insurer’s portal. Don’t trust the plan’s brochure – they can change mid-year.
I had a client – let’s call him Marcus (not me, another Marcus) – who did the comparator and found two plans with similar costs. Plan A had a narrow network but included his doctor. Plan B had a broad network but his doctor was out-of-network. He chose Plan A. Then his doctor left the network six months later. He was stuck. That’s a risk with narrow networks. The comparator can’t predict that.
The Coverage Gap Calculator can help you see if your plan has network gaps.
Now, let me give you a few rules of thumb.
Rule one: If you have a chronic condition or expect high use, prioritize low out-of-pocket maximum. The premium difference is worth it. A plan with a about $500 deductible and about $2,000 OOPM might cost $400 a month. A plan with a about $5,000 deductible and $9,000 OOPM might cost $200 a month. If you hit the OOPM, the expensive plan costs $400×12 + about $2,000 = about $6,800. The cheap plan costs $200×12 + $9,000 = about $11,400. You save about $4,600 by paying a higher premium.
Rule two: If you’re healthy and have savings, an HDHP with an HSA can be a great choice. Low premiums, tax-free savings, investment growth. But only if you can afford the deductible. If you have $3,000 in savings, don’t pick a about $5,000 deductible plan. You’ll be one broken leg away from debt.
Rule three: If you have a preferred doctor or hospital, make sure they’re in-network. Call and ask. Get a name. Write it down. If your plan changes networks mid-year, you might get a “continuity of care” exception – but that’s a hassle. Better to choose a plan with a network that’s stable.
Rule four: Don’t ignore the out-of-pocket maximum. That’s your financial catastrophe cap. If you can’t afford to hit the OOPM, you can’t afford that plan. Period.
Someone I worked with – let’s call her Lisa – was deciding between two plans. Plan A: about $300 premium, about $8,000 OOPM. Plan B: about $450 premium, about $3,000 OOPM. She was healthy, so she chose Plan A. Then she got pregnant. The pregnancy was complicated – bed rest, C-section, NICU stay. She hit the about $8,000 OOPM in April. She paid $300×12 + about $8,000 = about $11,600 for the year. On Plan B, she would have paid $450×12 + $3,000 = about $8,400. She lost about $3,200. She told me “I should have picked the higher premium.”
That’s the trap. Healthy people can have bad years. Pregnancy, accident, sudden diagnosis. You can’t predict the future. So the decision is not just about expected use – it’s about risk tolerance.
The Health Plan Comparator gives you the numbers. But you have to decide how much risk you’re willing to take.
Here’s a quick decision framework.
Low risk tolerance (you hate surprise bills, you have little savings): choose the plan with the lowest out-of-pocket maximum, even if premium is higher.
Medium risk tolerance (you have some savings, you’re healthy): choose a plan with moderate deductible and moderate OOPM. Maybe an HMO or PPO with a about $2,000-4,000 OOPM.
High risk tolerance (you have significant savings, you’re very healthy, you want to invest in an HSA): choose an HDHP with a high deductible, low premium, and HSA eligibility. But only if you can self-insure the deductible.
During open enrollment, I do this for my own family every year. I pull the SBCs. I run the comparator. I check networks. It takes me an hour. That hour has saved me thousands.
Don’t be the person who picks the plan with the lowest premium and gets crushed by a surprise hospital bill. Use the tool.
P.S. Denise – the one with breast cancer – she’s in remission now. She still uses the comparator every year. She says “it’s the only way I trust myself to pick the right plan.”
