3 things you need to know about open enrollment

3 things you need to know about open enrollment
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We as a nation spends nearly 18% of our wealth on health care, according to data from the Organization for Economic Cooperation and Development. That’s double as a percent of national income what any other country spends.  Clearly, health care has been a tough one for us to figure out!

I have radical ideas about how I would want to provide health care going forward. But right now, we are in open enrollment for health plans for 2016 and that’s what we need to focus on.

The cost on the Obamacare exchanges looks like it’s going to be up 7% on average. But some cities and states in particular will see major increases.

For example, premiums in Phoenix are up nearly 20% year over year. In terms of states, sparsely populated places like Alaska, Montana and New Mexico are seeing big increases too. But the worst state in the country is Oklahoma, where the average cost of a plan is going up by more than a third.

In other states, the cost is actually going down. So when you put that together and mix it, you get a 6% to 7% average increase. That’s a problem when inflation is basically at about nothing, less than 2%. Here we have health care costs up 7%, well, that is not sustainable. It’s not the disaster the Obamacare haters predicted, but it’s not sustainable either.

Now that open enrollment season is here, I want to outline 3 key things you need to know about health care going into 2016.

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Pay attention to the color codes

Most individuals buying their own coverage by color codes wind up buying silver on the health care exchanges. But there’s an odd thing going on. The silver plan you have may impose big increases for 2016.

If you will go and shop either on your state’s health care exchange or off it, you may find another silver plan for next year that’s less than what you pay now. But by just doing a renewal and keeping doing what you’re doing, you will cost yourself money.

The most important caveat when you’re shopping is pay close attention to the doctors who you are allowed to see. Ditto with the facilities. You want to be sure you have access to what you want at the lowest premium possible.

Small businesses need to shop around

For small businesses, there are huge differences in the cost of similar coverage from one carrier to another. If you use a health insurance broker, you need to shop that coverage. The cost of small employer health coverage in most of the country is going down, not up.

Your out of pocket is likely to go up

Employers are benefiting from the fact that medical cost inflation has moderated. Yet at the same time, they’re increasing the amount of out of pocket you pay. So you need to be aware and be prepared to budget for it. In fact, the average employee deductible has increased 50% in the last 5 years, according to The Los Angeles Times.

Yet employers are *not* the bad guy, in my view. As a practical matter, they don’t have to provide health care; it would be cheaper for them to pay the fines under the Affordable Care Act for not doing so.  They choose to provide health care benefits to attract a strong talent pool. At many employers, there will be only high deductible plans when you go to renew.

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Clark Howard About the author:
Clark Howard is a consumer expert whose goal is to help you keep more of the money you make. His national radio show and website show you ways to put more money in your pocket, with advice you can trust. More about Clark
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