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Healthy Living: Hard Picks With Insurance Costs Jumping

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Put aside the Shakespeare, the Toni Morrison, the Terry Kay, or whoever might be your favorite author. Your reading material this month needs to be your employer's open enrollment insurance information.

While it might not be the most exciting text, it may be shocking. And it definitely is the among the most important information health care consumers will read this year, experts on health care benefits are saying.

"What you're going to see this year is very different than what you've seen in the past," said Brent Layton, president of Layton & Associates, an Atlanta health care consulting firm. "We're on the absolute cusp of major change in health care, and it's driven by one factor --- costs."

Insurance costs will rise on average 12 percent to 14 percent this year. Contrasted to cost-of-living raises of 3 percent or no raise at all due to budget freezes, that increase is particularly steep.

How that plays out in insurance benefits will vary greatly from employer to employer, and so it is impossible to say what changes will apply to all Georgia employees. The important thing to know is that this is a watershed year for selecting benefits, and health care experts stress the importance of going to any company-sponsored sessions your employer might have.

Be prepared to see higher deductibles, higher co-payments and higher out-of-pocket costs. Second, expect to be more active in your health care, including knowing more about costs, illnesses, and the drugs and procedures used to treat them. Experts advise some general guidelines to stretch your health care dollars: > If your employer offers a flexible spending account for medical expenses, this is the year to begin using it. Employees can set aside up to $3,000, pretax, a year to spend for health care costs not covered by insurance --- braces, contact lenses, eyeglasses and orthotics, for instance. A September ruling by the Internal Revenue Service expanded the list of expenses that can be covered. Now, even over-the-counter drugs like ibuprofen, cough syrup and antacids can be reimbursed through an FSA. (Please see information on how to use a flexible spending account, E5) > Read all options in the enrollment information provided by your employer. Prices on your old plan may not be the only thing that changed; coverages may have changed, too. Also, married couples or those who have domestic partner benefits should assess their spouse's or partner's plan carefully. Maybe the other plan now becomes a better deal.

Be ready to assess one of the higher deductible, lower cost options being offered by some employers called a defined-contribution plan, or health care reimbursement accounts. These allow an employer to allot a worker a set sum of money each year for health care costs, say $500. The worker is offered insurance at a high deductible --- $1,000 or even higher --- and can use the allotment to offset out-of-pocket costs until the deductible is met. After the deductible is met, the insurer pays for medical costs at a determined rate, between 70 percent and 90 percent.

Analysts said these plans work best for people whose health care costs are low --- young, single or those with no dependents. Health plan options

An HMO, or health maintenance organization, still works well for families with young children who take small children to the doctor several times a year for well child care and routine illnesses such as ear infections and sore throats, experts said. Be prepared to see the price of co-payments go up. But don't assume the HMO is the best option just because it has worked in the past. Increased prices or change in health may be reason to look at other options.

Preferred provider organizations, or PPOs, will still be an option for most people and will offer the flexibility that consumers have said they want. These are good choices for older people and those with certain illnesses, such as a mental health condition, that HMOs limit. The catch will be that the price will go up in what an employer charges for it and also in co-payments. > Be prepared for efforts by your insurer to cut down on drug costs. Most insurers now offer a three-tier plan that reimburses less for certain drugs than others and that offers lower prices on generics. While this may not mean you need to go to medical school, you will need to learn about drugs. Read about drugs prescribed for you and your family. Talk to your physician about prescriptions and ask for cheaper options, such as a generic or a drug that might be equally effective but less expensive. Take advantage of savings through mail-order plans for maintenance drugs, like blood pressure medication, anti-depressants and blood thinners. Family changes

Lora Magnuson of Alpharetta received her open enrollment information two weeks ago. She and husband William Miller are parents of a 1-year-old, Ellie. Their first year of parenthood led them to more carefully scrutinize their insurance options for this year. Magnuson, who works in Alumni Relations at Georgia Tech, said the family is staying with its health maintenance organization, but she and her husband did decide to enroll in a flexible spending account for the first time.

"Since she's [Ellie] having those well visits and immunizations, we're having more co-pays," Magnuson said. "Plus, for prescriptions, I noticed the co-pay is going from $20 to $25. That'll save us $7 to $8 a person."

Magnuson has figured out the basic math on the FSAs. Because the money is deducted pretax from a worker's paycheck, a person stands to save one-third on out-of-pocket expenses, up to $3,000. If a person fully funds an FSA, a savings of about $1,000 can be realized.

"If an employer does offer a flex plan, people should take full advantage of that," said George Wilson, vice president of sales at Kaiser Permanente.

Hundreds of thousands of employees insured by the state's largest insurer can expect a wider array of choices than in previous years. Blue Cross and Blue Shield of Georgia is introducing its version of a defined benefit plan and a bigger push for wellness. It also has expanded online medical information to help consumers learn about certain medical procedures and hospital expertise and complications. In addition to its own site, it has linked up with a consumer health site that will allow consumers to compare hospitals by procedures.

Web sites are becoming more valuable for learning about drugs and drug costs, too. Rxaminer compares drug prices and drugstore prices for free. Rxaminer President Toby Rogers said he came up with the idea for the Web site from his father, a cardiologist, who realized he was prescribing the same drugs over and over again, largely in response to marketing efforts by drug companies. With a little research, Joseph Rogers, Toby Rogers' father, realized such practices were costing his patients money.

Looking for ways to save on health care costs at every turn will continue to be crucial to maintaining high levels of care and choice for years to come, the experts agreed.

"There are changes happening across the board," said Kaiser Permanente's Wilson. "That just underscores the need to be careful about your choices." ONLINE

Compares drug prices

Tips by Food and Drug Administration for buying prescriptions online

Verifies online pharmacies

Web site of Blue Cross and Blue Shield

Copyright 2003 The Atlanta Journal-Constitution

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