Did you know that 80 percent of Americans typically enroll in a health plan that is not appropriate for their needs? That may come as a surprise, but when you consider some other statistics, it really shouldn’t:
83 percent of employees spend less than an hour researching their open enrollment options.
92 percent simply choose the same benefits they had the year before.
Only 4 percent can correctly define the terms deductible, out-of-pocket maximum, copay and coinsurance.
Hey, I’ll be the first to admit it; figuring out health care coverage is not easy or fun. It takes effort. But ignoring the matter can create big problems.
The are two problems. People typically overestimate their financial risk and therefore spend too much on insurance. They guarantee their spending on premiums to a greater extent then they are likely to spend on health care. The second problem is little value is placed on the time needed to evaluate coverage choices.
Conditions change from year to year. A look at past spending habits might provide a better idea of risk. Understanding the maximum out-of-pocket risk will help determine the appropriate deductible and co-pay choices.