00:00Okay, so if you just got that dreaded open enrollment email from your employer, you've
00:05come to the right place.
00:07Today, I'm going to give you an in-depth breakdown of the different types of healthcare
00:10plans, fill you in on that healthcare lingo, what is a deductible anyway, and try to help
00:15you walk away knowing which plan might be best for you.
00:18Now, I'm not saying this will be the most exciting topic, but I am going to give you
00:22some crucial information to use when thinking about your overall financial situation.
00:27Healthcare can have a massive impact on this.
00:29I mean, for many of us, medical emergencies might be the most expensive purchase you
00:34make in any given year.
00:36So, if you want our finances to stay on track, don't let a medical emergency derail you.
00:41Keep watching this video.
00:43What is open enrollment?
00:45Okay, so first off, what is open enrollment?
00:48This is the time when you have to decide which healthcare plan you're going to choose for
00:51the following calendar year.
00:53It's typically November 1st through January 15th.
00:56Once you choose that plan, you're pretty much set for the next year, unless there's
01:01a major event like a new job or a child.
01:03So, it's really important you do a bit of extra research right now to choose something
01:07you might be stuck with for a full year.
01:10Types of plans
01:10There are other types of plans available, especially for non-employer group plans, but today we'll
01:28just cover these.
01:28Basic healthcare lingo
01:30Premium
01:31This is what you'll pay each year just to have insurance.
01:35Usually, this comes out of your paycheck, and employers typically cover around 70-80%
01:40of it.
01:41Think of it as your subscription fee for having insurance.
01:44Deductible
01:45This is the amount of money you need to spend on healthcare, not including your premium,
01:49before your insurance starts to pay.
01:51Preventative care is usually covered before you hit the deductible, so this really applies
01:56to care beyond routine checkups.
01:59Co-insurance
02:00This is the percentage of healthcare costs you pay after hitting your deductible, but
02:04before reaching your out-of-pocket max.
02:06Many plans require you to pay around 10%.
02:10Out-of-pocket max
02:11This is the most you'll spend on healthcare in a year, not counting your premium.
02:16After you hit this, your insurance covers 100% of your costs.
02:20Co-pay
02:21This is a fixed amount you pay for a covered medical service.
02:25For example, you might pay $20 to see a doctor, and the rest is covered by insurance.
02:31HMO
02:32HMO plans require you to choose a primary care physician, PCP.
02:36That doctor manages all your care and referrals.
02:40These plans usually have lower premiums because they have deals with certain providers.
02:45The trade-off?
02:46Less flexibility
02:47You generally have to see your PCP before you can visit a specialist.
02:51If you like structure and saving money, and don't mind going through your PCP first, HMO
02:57might be a good fit.
02:58PPO
02:58PPOs are the most common plan type by enrollment.
03:02You don't need referrals to see specialists, and you can go straight to in-network providers.
03:07Just try to stay in-network.
03:09Going out of network can be expensive and complicated.
03:12PPO plans typically have higher premiums but lower deductibles.
03:17You'll often pay a co-pay per visit or meet a small deductible before insurance kicks in.
03:22PPOs also tend to have broader coverage and more provider options, which is why they cost more.
03:28FSA
03:28An FSA, or Flexible Spending Account, is a tax-advantaged account for medical expenses.
03:34It's often paired with HMO or PPO plans and funded through pre-tax payroll contributions.
03:41But here's the catch.
03:43It's use it or lose it.
03:45Whatever you don't use by the end of the year, or if you change jobs, you lose.
03:50Planning ahead is key to making this work for you.
03:53HDHP
03:54High deductible health plans have higher deductibles but lower premiums.
03:59The big perk?
04:00You can use an HSA health savings account with them.
04:03HDHPs are good for people who are generally healthy and don't expect many medical expenses.
04:09But it's risky.
04:10If something unexpected happens, you're paying a lot out of pocket before coverage kicks in.
04:16According to IRS rules, HDHPs have a minimum deductible of $1,400 for individuals or $2,800 for families.
04:25Out-of-pocket maxes are capped at $7,000 for individuals or $14,000 for families.
04:32HSA
04:33An HSA is a health savings account only available with an HDHP.
04:38Like an FSA, you contribute pre-tax dollars.
04:42But unlike an FSA, unused funds roll over year after year, and you can even invest them.
04:48HSAs are triple tax-advantaged.
04:51Contributions lower your taxable income.
04:54Earnings grow tax-free.
04:55Withdrawals are tax-free when used for eligible medical expenses.
05:00If you max out your HSA for 20 years and invest with a 7% return, you could have over $160,000 saved.
05:09That's huge, especially considering health care is often the biggest retirement expense.
05:15Conclusion
05:16So, how do you choose the right plan?
05:19If you value lower premiums and are healthy, consider an HDHP with an HSA.
05:25If you want flexibility and don't mind higher premiums, a PPO might be your best bet.
05:30If you want lower costs and don't mind sticking with a single provider network and referrals, an HMO can be a cost-effective option.
05:37Think about your current health, expected medical needs, your financial goals, and don't forget to review which providers are in-network.
05:45It's not fun, but taking a bit of time now can save you a lot of money and stress later.
