Transcript

All right, welcome back. During open enrollment season, Americans have the opportunity to choose their health insurance plan. It's important to choose the right plan that meets your needs, especially as medical debt continues to soar. Yeah, this is such a huge expense that we have to be really smart about it. Some local financial instructor, Michael Mazarin from the Retirement Education Foundation is here to talk about what to consider when you're selecting your healthcare plan. And also talk about this health savings account, which is I. Do you hear you guys hear me talk about the HHS, the health savings account. Quite a bit. So if if that's right for you because that too can give you some financial gains. Michael, welcome as always, just an easy little topic, just a little. I'll be your head, right. Could you tell us here? Let's start with if you are employed in your employer offers health insurance benefits and you're getting into open enrollment at your work, what are you looking for? What are you doing? Yeah. So typically, most employers will offer two options. And you can break it down by a high deductible and a low deductible. And deductible is when you go to the doctor's office, how much are you paying out of pocket throughout the year? So a lot of people might assume, while of course, I want to pay less out of pocket, but those lower deductible plans, those have higher monthly premiums. So if you think you might be going to the doctors. Not whether you have health concerns or you have prescriptions. If you have a lot of Health Sciences child, I found when the kids were little, young children, for sure, right. If you have a lot of visits to the doctor's office, a lot of health expenses, you might want a higher monthly premium because it's gonna save you on all those trips to the doctor's office and all those prescription costs. Now, if you're relatively healthy and don't have a lot of trips to the doctor's office, you don't have a lot of health expenses, then you can probably get by with a lower monthly premium. But the risk is if you have a lower monthly premium, a higher deductible. Man, when you go, when you do go to the doctor's office, you'll have a higher out of pocket cost. So there is no one best size fits all answer. It depends on your personal health habits and your personal health needs. But there is sort of a tiebreaker if someone's kind of on the fence of high deductible, load loaded deductible, the tiebreaker is the HSA. So a health savings account. If you have a high deductible plan, so a lower monthly premium, higher out of pocket costs, you qualify to save into an HSA health savings account. And HSA is a really powerful. Because they are the only triple tax advantage account that exists. You get a tax deduction to put the money into the account. You can invest the money and it grows tax free and it's tax free when you withdraw the money. So if you're kind of going back and forth on higher low deductible, that HS could be the tiebreaker. And they will just say, just because I have the HSA, it there's no timeline on it. You don't have to. Some of these savings accounts, you had to use them up within the calendar year or whatnot. And that is that's not the case with the HSA, correct? That is an FSA, so flexible. Savings account or flexible spending account, that is you use that money within the year. HS A it's, it's very important difference. You're right. You can invest that HSA money and let it grow, grow, grow, grow, grow to use it ten, 20-30 years down the line for health expenses. When you're 80 and you have a big health expense, you're, you're paying for it with this tax free money. This is on top of what we're getting with our health insurance. It's on top of that. So some employers will, as a benefit, they will contribute to an HSA for you. Some employers they leave up to you to contribute. The money, every employer is different in that regard. So my, yeah, my HSA account, just real quick, I when I go to the doctor, it might cost me $100 or $200 out of pocket. Somebody on the what's our other plan, an HMO or something, somebody else would go to the doctor and pay 30 bucks. So I'm paying more out of pocket. But I don't go to the doctor that often. And I'm saving and then I have this savings account that's growing. So what's the danger in just hitting renew every year? You have a lot of people who don't really think that. Their plans are changing too much. They just hit renew, renew, renew and then maybe they don't have the right coverage anymore. Yeah. So the danger is that our life changes. So for example, when my wife and I had our daughter, we were on a before that we were on a high deductible, lower premium plan. But we knew the year we'll have our daughter, we, we have a lot of doctors visits, of course, and all the, all the costs that come with having a child. And so we changed our plan that year to a higher, higher, I'm sorry, lower deductible, higher monthly payment. So that when we went to the the doctor's offices. That year, we didn't have as much out of pocket costs, right. So as your life changes, you wanna make sure you're on top of which plan makes the most sense for you for the coming year and also, you know, figure out what how to make this money work for you in some way, which would be the HSA. And not everybody can do that. Let's talk about Medicare. And that's a complicated, that's a pretty complicated issue. But people are afraid of rising costs there. What do we need to be on the lookout for? Yeah. So a couple of things here. There are a lot of misconceptions around Medicare and #1 Medicare is not free. A lot of people think that. Once they're 65 and get on Medicare, their health insurance is free. That is not the case. Part Part B has a monthly premium that's means tested based on your income and most people end up picking either Medicare Advantage plan or a supplemental plan and that has cost as well. The one thing I always tell people if we talk about the class is please do not pick health insurance based on your health today. When you're 65 years old, you're picking health insurance for what can happen to your health in the next 5-10, twenty, 30 years. And at some point, most of most people have. Something pretty serious happened to their health and when you pick that initial health insurance on Medicare, whether you picked the the cheaper Medicare Advantage plan or more expensive supplemental plan, once that happens, you're allowed to pick whatever you want and you can't be discriminated against. But once you make that first selection, you can be discriminated against down the road. So you're picking for the rest of your life. You can change, but if you have a health event that pops up, these insurance companies can deny your change. Wow. So it's really important when you're making that first election to understand what what are the. The pros and the cons of the playing you're selecting and it's often does make sense to get the better health insurance when you're younger and healthier. Yeah. So that when something bad does happen to you, it happens to everybody eventually that you have good health insurance to cover you. Wow. All right, Lots to think about. Good information, Michael. Thank you. As always. Give everybody the website edu.org. There you go. And we'll see you next hour. We'll talk more about more fun stuff to talk about. Papers are not to spend it. We'll be right back.