I still have more than two decades until I’ll be eligible for Medicare and hence eligible to shop for Advantage or Medigap coverage. But I’ve been close enough along the periphery of commercial Medicare coverage that it has become clear to me that selecting a Medicare Advantage/Supplement plan is incredibly complex. I also know that you can literally save — or cost yourself — thousands of dollars annually if you make bad choices.
Over 65 and Retired? Here’s the Difference between Medicare Advantage and Medigap (AKA Medicare Supplement)
Understanding the way that we think and make decisions is incredibly important when it comes to thinking about your benefits and your financial goals. Our minds work in an incredible way that enables us to make sense of the world without too much undue stress, but sometimes they can lead us in the wrong direction.
To improve our decision-making process, we should try understand how we naturally interpret events using the “rules of thumb” (or heuristics) our brains are wired to make. This prevents us from stressing out about many of our small decisions, but it also means we make many decisions without really considering whether we made the right decision or not. Ideally, make a quick judgment call on the potential impact of your decision, and proceed from there. When buying your morning coffee — and especially if you are in line in front of me— just make a decision.
Zachary Tracer, who writes on healthcare policy and the healthcare business for Business Insider, wrote a great article about how he decided to eat his own dog food this year and review all of his health insurance options offered through his company — and specifically why he chose a more expensive PPO plan instead of the free plan his company offered.
A few observations…
We’ve written some articles on considerations to make for those who are selecting employer-based benefits and will write SO MANY more that you’ll not know what to do with all of them! But for today, since it’s the first day of the annual individual health plan open enrollment period (OEP for short, and it lasts Nov. 1-Dec. 15, 2018), this post focuses on those who are self-employed, contractors, gig-economy adventurers or, if you’re really lucky, already retired and way under 65 years old. If any of these scenarios apply to you, you’re likely eligible to buy an individual health insurance policy and individual-based other coverage, too. Here’s a few tips on what to look for and what to avoid.
In the cult-classic Jack Black movie, School of Rock, there is a funny scene where he “teaches” the kids to do the math. On the fly he grabs a guitar and creates a song that goes like this… “
Math is a wonderful thing
Math is a really cool thing
So get off your ath let’s do some math
Math, math, math, math, math
Do the Math, FI Style!
We had a fun idea of creating a section of the blog called “Do the Math” for benefits, healthcare, retirement, and all-around FI math illustrations.
Picking a Health Plan, Part 2: Understanding Coverage-Level Details Like Copay, Coinsurance, Prescription Drug Tiers and More
In the first part of this two-part post, we covered premium and deductible, which are the two main considerations most of us look at when deciding to pick a health plan every year through our employer or on the open market.
There’s no doubt that your FI minds should gravitate to what you might spend on an annual basis, combined with how much you’re on the hook for if you have to see a doctor or specialist. But the way health plans get priced the way they do depends on their coverage levels — copays, coinsurance, prescription drugs, mental health coverage and more. This post digs deeper into those plan variables to help you decide what’s going to be the most cost-effective and compatible plan for your and your family’s personal health needs.
Best Laid Plans? A Discussion of Which Benefits Can Protect Your FIRE Goals from Unforseen Accidents
The Benefits of FI is all about sharing our knowledge on benefits and how to make choices that align with your FI and FIRE goals. One of those choices with our employer-provided benefits is income protection — supplemental life insurance, accident indemnity, critical illness coverage and more.
It used to be that your employer presented you with a single health plan and you had a simple decision: take it or leave it. Maybe, if you were lucky, you could pick between the wonderful worlds of HMO and PPO, with one promising low costs if you don’t get any bright ideas about having options, the other promising you that you can do whatever you want so long as you pay for it.
These days, we’re in the age of “healthcare consumerism,” which among many other things means that you’re on the hook for more of your healthcare costs. It also likely means that your employer is making a consumer-driven health plan (CDHP) available to you, which is the combination of a high-deductible health plan (HDHP) and a health savings account (HSA). If these are new or confusing terms to you, you’re not alone. Health insurers specialize in actuarial risk, not marketing and communication, so they often think that the best way to get you to understand a confusing phrase is to make it an acronym. Ugh. Calling something a “CDHP” and saying it’s there to help you understand and control your healthcare spend is like promising a better understanding of your personal finances and then handing you an abacus and saying “OK, have fun!”
But, as Bob Marley might say, don’t worry about a thing, ‘coz every little thing’s gonna be alright…once you read through this primer on which health plan is best for you, your family, and your goals of financial independence.
How we think about a topic affects our decisions. When it comes to the benefits that an employer offers us we can step back a bit and get a different perspective that will help us make better decisions and hopefully improve our lives.
First of all let’s acknowledge that the entire insurance and benefits experience is pretty darn frustrating. It is so tangled up and layered with jargon that we often give up before we begin evaluating our options. When you add in the complexities of government rules and programs it gets even more difficult to comprehend.
Here are some suggestions that hopefully will help you think about your benefits in a better way.
Picking a Health Plan, Part 1: How to Weigh Premium and Deductible When Picking Your Health Insurance Coverage
The average person spends less than 15 minutes per year researching and selecting a health plan. Dang! That’s not much time to spend on something that’s worth $20,000 or more per year for you. But we get it. We’re all busy. This piece is the first in a series on what factors to consider when making health insurance coverage choices. We’re right at the top, with premium and deductible.