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Making Health Insurance Decisions

Transcript

What's up Internet? My name's Ian Bloom. Welcome to Nerd Finance! I'm your resident financial life planner and huge nerd.

In today's episode we are going to be covering health insurance. Before I dive in, I wanted to let you know that last year we recorded very detailed videos on each of the different types of health insurance plans and today is just going to be a recap of that. So, if you have questions about a specific type of plan like a high deductible health plan, those videos are available elsewhere on the channel. So make sure to give them a watch.

Making health insurance decisions in open enrollment in general is a lot like creating your character in Skyrim: As it turns out there are a lot of different decisions to be made and a lot of little variables you have to understand in order to get the perfect thing, but most likely you're just going to hit the confirm button and move on. So, let's take things off autopilot a little bit and talk about the different types of plans that are available.

The first is a high-deductible health plan. High-deductible health plans are always paired with an HSA and are called HD HP's. HSA stands for health savings account. HSAs are paired with a high-deductible health plan similar to how Ash Ketchum always has Pikachu on his shoulder, because as it turns out they're way better together. High-deductible health plans start off with this big deductible that really isn't that attractive, however even though they have this big deductible you are able to save the money that you need to cover that deductible in the health savings account and that money can be saved pre-tax, and will be taken out tax-free as long as you spend it on medical care. So, it's a really powerful savings tool. Here's the trick, in general, high-deductible health plans have much lower premiums than the other policies that are available. So, as a result, the money that you're saving is usually money that you would have spent on the premiums anyway. It can be used for future years, or for other things than medical care with a penalty, so you get to save your own money and spend it on what you want.

Preferred provider organizations are just what they sound like. There's an in-network group of doctors and hospitals that you can see with maybe 70 or 80% of your expenses covered. Whereas there are out-of-network groups of doctors and hospitals that you can see where you might get covered for 30 40 or 50% of your costs. Keep that in mind when you're on a PPO plan. It means that you have an in-network group that you should be seeing more often if you want to be cost-efficient.

Point-of-service plans are very very similar to PPOs in the sense that they start with a P, and in general they have in-network providers that you want to be seeing. However, the back end of a POS plan is a little bit different than the back end of a PPO plan. Instead of just having agreements with the doctors in general, they have specific rates that they will pay up to any particular doctor, regardless of what that doctor or provider charges for their care. So, instead of having it be 70% or 80% of the benefit you may have 100% of your care covered by what they pay out, or you may have 50% covered by what they pay out depending on the procedure and where you go.

Finally, we'll deal with HMOs, health maintenance organizations. Health maintenance organizations are relatively new because they came about as a result of large urban centers becoming popular. You see, HMOs will only operate typically within a geographic area where they have negotiated care with all of the medical providers in the specific category, in that area. For instance, in my area, Duke is a big hospital and medical facility owner so if Duke were to have an HMO it would say that my coverage covers 90% of costs at Duke hospitals. It's kind of like pre-paying for your medical care. HMOs do tend to have a pretty high premium, but because they're limited to geographic areas if you're in that area your care might be 100% covered. As a result, it can be pretty helpful to have one of these if you live near an urban area. Unfortunately, it does mean that rural viewers will not really have access to good HMOs. You know places like Boston, New York, LA, Raleigh, I guess...will have good HMO coverage.

That was a ton of information. As you can see popping up throughout the video, I do have A Gamer's Guide to Health Insurance linked in the description if you want to recap of some of these basic things, plus a couple little stats on how the plans size up next to each other. You can also go watch the individualized videos I talked about at the beginning of this video which dive deeper into each type of health insurance. Finally, I hope that you enjoyed the content and that it was helpful for you and I got in just enough nerdiness with the Skyrim and Pokemon jokes. I hope you have a wonderful day thanks so much for watching!

The Spookiness of Open Enrollment

Transcript

What's up Internet? My name is Ian Bloom. Welcome to Nerd Finance. I'm your resident financial life planner and huge nerd!

Today we are going to be talking about one of the most spooky times of year...open enrollment. You might have thought that I was going to be talking about Halloween and that's completely reasonable. But, unlike Halloween, where all the ghouls and ghosts are in your face, open enrollment is a time of year where you can make a lot of mistakes that will last all year and not even know that you made the mistakes until you're paying for them. So it's a pretty spooky time of year for a lot of people because there are a lot of decisions to be made and maybe not enough information disseminated about how to make them.

I thought I'd get out ahead of it this year and make some videos to help people with this time. So, over the next four weeks we're going to cover health insurance, disability insurance, life insurance, and some of the ancillary benefits that you may have available at your employer such as legal insurance and critical illness insurance. Since open enrollment is a little bit of a specter on the horizon what we're going to try to do over the course of these next four videos is level you up a little bit in order to make it easier for you to deal with some of these decisions.

One of the biggest problems with this time of year is that you have a lot of decisions that you have to make in a very short period of time, maybe without guidance, so you might just click through some of the health insurance options or the disability insurance options that you don't fully understand because you know that you have to get these things submitted or you're gonna end up with all the default plans.

The best resource that I can offer you is A Gamer's Guide to Health Insurance, which is a quick PDF you can download in the description that breaks down all of the health insurance plans and what makes them different in a stat like format. Now, obviously it's general education. I can't get specific about your employer's plans in that document because I don't know them, but that being said it covers the four main categories and breaks down some of the abbreviations that we use in the industry like PPO, HMO, HDHP, all those types of things to make them a little bit easier to understand.

Finally, if you're looking for general financial education and open enrollment videos aren't specifically interesting to you feel free to check out my book in the description. It's called A Gamer's Guide to Money: Level 1, and even though this is a little bit of a shameless plug, I don't blame you if open enrollment isn't what brought you to this channel. If you were hoping for some more general stuff click through all the other videos on the channel, subscribe to it, or download the book because all of that stuff is going to be more general education.

I hope that this video was interesting to you. I just wanted to make something to preview the series that we're going to come out with this month because I think that it's helpful to know what you can look forward to on the channel.

What About My Other Benefits?

Transcript

What's Up Internet? My name is Ian Bloom and this is Nerd Finance. I'm your resident financial life planner and huge nerd!

After the last video you might be saying "Well what about my other benefits?" and in the wisdom of my mentor "Benefits are like air you rarely appreciate it, but when it's not there you really suffer." He's kind of like a Yoda, but if Yoda was less green, and didn't use the reverse speech, and was taller.

But, anyway so there there are lots of benefits and a few of them are very core to most employers. So we'll talk about three main ones here and we'll briefly talk about some others.

Health insurance is the main benefit that most employers that are significant provide their employees. There's usually terms associated with health insurance called a premium, which is how much you pay, a deductible which is how much you have to pay the health care providers before your insurance company covers anything, and then an out-of-pocket maximum which is the most you have to pay in any given year. Insurance policies are very difficult to evaluate in a couple of seconds, but just know that those are all factors and what you should be using to select your health insurance policy.

But do make sure [to understand] that because the health insurance market is so expensive right now, the health care market is actually more expensive. So since you get taxed anyway I would probably recommend everybody take some amount of health insurance coverage, with very few exceptions.

Disability insurance is the next benefit and it's kind of a big deal. I mean what if you get your arm chopped off by a Viking in a raid? You're gonna need to still work afterwards and you might not be able to for some time. So given that, the disability insurance company will pay while you're recovering whether it's from - you know - your arm getting chopped off or something less serious. And typically they will pay a percentage of your salary over a period of time. This income can be pretty necessary to help you get back on your feet or if you're permanently disabled to keep you going.

Then lastly, life insurance is a pretty important one as well it's usually a token amount that's given to you for free by your employer. Sort of like putting a bandaid on that viking wound from earlier. Just keep in mind that having some amount of life insurance is often pretty important to how families recover from the loss of an income earner, and usually the amount that's given to you for free - one or two times your salary - is not gonna cover all of the needs that your family has. So you might want to make sure to evaluate those insurance policies and make sure that you have the right amount of coverage.

For most other benefits offered by employers they're either optional or they are specific to one employer. So we're not going to cover most of those, but just know that with things like critical care insurance, legal insurance, and those things it can be a really good fit for certain individuals. Don't immediately write them off, but in a lot of cases you'll want to evaluate where those dollars are going and whether it's worth it to have those insurance benefits.

That's all for today. This video again [was] probably a review for some people who are very familiar with their employee benefits. But, it's pretty hard for me to cover a 401k policy and then not say well what are the other benefits that you might have so I wanted to make sure to go over that. If you have suggestions for future videos or ideas that you want to make sure get brought up somewhere, don't hesitate to reach out. Find me on social media at OpenWorldFP or email me at This email address is being protected from spambots. You need JavaScript enabled to view it.. Lastly, there's of course my website openworldfp.com. If all this seems like a lot to you go there to look at what services we offer that might be helpful. Thanks everybody, have a great day.

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