Special Live Edition: Open Enrollment
GERRI WILLIS, CNN HOST: Good morning, everybody and welcome to a special edition of YOUR BOTTOM LINE. If you work for a living, chances are you are trying to figure out what health insurance plan to choose. In the next half hour, we'll help you understand open enrollment, likely the biggest financial decision you'll make this year. We're taking your phone calls and answering your e-mails. The show that saves you money starts right now. Chances are the health plan your company is offering for 2010 looks nothing like this year's plan, that's why we put together a topnotch team to help you understand the chances and help you make the hard decisions. With us for the half hour, CNN senior medical correspondent Elizabeth Cohen, she'll be here in just a second who breaks down the issues like no one else, and in New York, Andrew Rubin of Sirius XM Doctor Radio, and NYU's Langone Medical Center. He is a long-time friend of this show. Andrew, I want to start with you, if we could. The biggest change, no doubt about it this year is that we are paying more for our health care, 10 percent more. Tell us how they are making that much more money.</s>ANDREW RUBIN, SIRIUS XM DOCTOR RADIO: Well, it's amazing what's happening. Health care costs, as we all know, are going up and up and the corporations have to either pay that cost themselves or pass it on to employees. And what we're seeing is most cases, most large employers are passing those costs on to employees with higher co-pays, higher co-insurance amounts, higher deductibles. It's really fascinating, but it's really about the economics.</s>WILLIS: It's really about the economics and of course, we're paying so much more, 10 percent when you include premiums and co-pays or co-insurance together, all of the out of pocket costs. It's really going to cost people a lot of money. Elizabeth, I want to go to you, now. Let's back up a couple steps, because I think a lot of people out there, they're saying, yeah, I don't understand all these phrases. What is HMO? What is PPO?</s>ELIZABETH COHEN, CNN SR. MEDICAL CORRESPONDENT: Right, and you need to understand those because chances are you're going to have a choice between an HMO and a PPO. An HMO is a health maintenance organization, and it's relatively restrictive. It gives you a set of doctors, a set of fatalties that you can go to. A PPO, which is a preferred provider organization, is sort of an open HMO, that's how some people describe it. And so you've got more choices about who you choose. You will pay more if go on...</s>WILLIS: I was going to say, I hear more money, ding, ding, ding, ding, ding.</s>COHEN: Exactly. More expensive to do the PPO, but some people, they want more choices. Other people say, you know what, I don't go to the doctor much, an HMO is fine with me, I'll pay less for it.</s>WILLIS: You know, Andrew, it's all about choice, obviously, and people -- what are they willing to pay for, for that? I want to talk about a big change this year, it's co-pay and co-insurance. Most are used to co-pays, right? Twenty bucks, $10, $15 to see the doctor, it's not much money at all, but this is going to be different this year. What are a lot of people encountering?</s>RUBIN: It's amazing. I have seen it all over the place and it kind of got me by surprise. As you say, normally, you go to the doctor and you have a $10, $15, $20 $25 co-pay. And I have seen this in a lot of employer sponsored plans this year, where you no longer have co-pays apply, you're pay co-insurance and that simply means the employer is basically applying a percentage of the visit or the service that you're getting, the medical service that you're getting, and you're paying a percentage of that visit. And the problem is, the higher the cost of that visit, if it's an imaging test, a specialist visit, a procedure, a colonoscopy, you name it, the percentages are going to work out to be more money than the co-pays were. And it's really, as I said, you know, I said a few minutes ago, it's a way of shifting costs, higher costs, from the employer onto the employees.</s>WILLIS: Right. You know, I -- we've seen this ourselves here at Time Warner, they're changing as well, so we are trying to figure out what it means to us. But, another issue out there you may not be aware of is what they call mandatory enrollment. Elizabeth, 10 percent of companies this year are saying, hey, if you don't participate in open enrollment, you may not have coverage or we may default you into a coverage that you don't want. Why are they doing that?</s>COHEN: Well, I think there are probably a variety of reasons for doing that. They want people to take responsibility; they want people to make a choice. Because the way it's worked in the past is if you don't make a choice, we're just going to put you in whatever, we're going to put you in whatever you did last year. So, it's forcing people to take more responsibility. But it's also a way of saying, hey, if you get benefits through your spouse, we're going to make sure that you don't join in with us. So, if you get benefits through your spouse and you don't want them here, that's fine with us. Get your benefits through him or her and leave us alone.</s>WILLIS: Andrew, that reminds me now, a lot of companies are auditing their own employees. They're saying, hey, if your spouse has coverage somewhere else, we're going to penalize you financially if you decide to have them covered as well under your plan. Is this fair? I mean, how high can these costs go?</s>RUBIN: Well listen, I mean, first of all, people need to look at, if you have an employee option with your spouse, there's probably really, in most cases, not a need to carry it on your own because it's expensive for the employer, but it's also expensive for you as the employee. You have to understand, employers actually want their employees to have insurance coverage. They don't want to find that, you know, they're in some catastrophic financial situation. So, it's really two-fold. One is they don't want to pay twice and they also do want their employees to have coverage, so this is a way to make sure that their employees have the appropriate level of coverage.</s>WILLIS: All right. So, there is some good news here, though. A glimmer of hope, here. You do have flexible spending plans. Right? You can set money aside pretax, save a little dough, for some of this money you're going to be spending on health care. You know what confuses me, Elizabeth, is what can you spend that on?</s>COHEN: Right, people, I think, in general, have a way too restricted view of what to do with an FSA. They think oh, and FSA is only to help me pay for a co-payment or a deductable or something big like that. But, you would be amazed. We actually have a list of a couple things that are on FSAs that you might be surprised to see. Something like for example, aspirin. When you buy aspirin or Advil or Tylenol or whatever, you can pay for that out of pertax dollars. Even something like, and I know this sounds crazy, therapeutic horseback riding.</s>WILLIS: That's crazy. I've never even heard of therapeutic horseback riding.</s>COHEN: There are some psychiatric and other diagnoses where...</s>WILLIS: What about cosmetic stuff? Can you use that money for that, as well?</s>COHEN: No, I don't think it work for cosmetic things. But, you would be surprised -- parking. You go to the doctor and have to park and you have to pay 10 bucks for the parking, you can pay for that out of pretax dollars. So, that are a long -- if you go to the folks who administer your FSA, if you go to their Web site, they will have a list. And I know, I was surprised by some of the things on there.</s>WILLIS: All right guys, we have lots more to come. We want people to call in. Elizabeth, Andrew, hang tight. Today's show is all about you, your e-mails, your phone calls, answers to your open enrollment questions. Send me an e-mail, gerri@cnn.com. Here is the number, 866-792-3399. That's 866-792-3399. Give us a call.</s>WILLIS: Welcome back to this special edition of</s>YOUR BOTTOM LINE: understanding open enrollment. CNN's senior medical correspondent, Elizabeth Cohen, and Sirius XM Doctor Radio's Andrew Rubin, they're both here to help us with our questions. And we want to get right to the telephones. The first question comes from David in Georgia. David, what is your question?</s>DAVID, CALLER FROM GEORGIA: Yes, one question is, being a single parent, which is the better option to take, the HMO or the PPO?</s>WILLIS: HMO or PPO, we were just talking about this a second ago, Elizabeth. What do you think for David?</s>COHEN: Well, I think David needs to think about what are his medical needs and how much money does he earn? If he's really -- David, if you are really in a financial struggle right now, then you might want to think about an HMO. It's going to be less expensive. If you have lots of health needs, for example, god forbid, if you or your child has a type of unusual disease, you might want to think about a PPO because you might want to go outside of your own network in order to get specialized care. So it has to do with how much money you have and what kind of health needs you have.</s>WILLIS: Obviously, the devil's in the details, here, as we start to look at these questions. I want to go to an e-mail question. Steven of Florida is asking us: "If you have co-insurance, what is the bill? What is my tab based on?" So, Andrew, answer that for us. How do they calculate co- insurance? How does it work?</s>RUBIN: That's a great question. And you have to know there's two components of co-insurance. One, if you are in network or out of network. And first I want to say, if you go out of network, it's really expensive because the co-insurance is calculated on the physicians charge, which is usually a very high number. If you're staying within network and you have co-insurance, your co-insurance is going to be based on what the insurance company determines is the reasonable and customary charge of that service. It's sort of the in network, if you will, contracted rate that the insurance company has with the doctor and you pay your percentage share of that.</s>WILLIS: Your percentage share. Elizabeth, do you want to chime in?</s>COHEN: Yes, I think it's no secret it's actually been on the Internet that here, the company we work for Time Warner which is switching from paying 15 bucks to see your doctor to co-insurance, paying 20 percent. And so what I'm going to be doing in the next week or so is just calling. Calling my children's pediatrician and saying what's 20 percent of an appointment with you? Because, as Andrew just said, it's unclear, there's the numerator is there, you know it's a 20, you don't know what the denominator is. 20 percent of what? And so I think what you really have to do is call your doctors and say I'm going to have to start paying you 20 percent of the bill, what does it come to?</s>WILLIS: Absolutely. And you know, 159 million of us are making these decisions right now. We want to hear from you 866-792-3399. We have Estelle in Illinois. Estelle, what is your question? Estelle?</s>ESTELLE, CALLER FROM ILLINOIS: Hello?</s>WILLIS: Go ahead.</s>ESTELLE: OK, if you allow yourself to -- if you are with an employer and you have their insurance and that company goes under or you lose your insurance, you're better off to have your insurance, because if you get a pre-existing while you're with your employer and then you have to go back and get your own insurance, if you can afford it, they're not going to cover you. So, I think you are better off to have your own insurance, like a co-insurance and an insurance with your company.</s>WILLIS: Well, I see a lot of money out of pocket here, Andrew, what do you say?</s>RUBIN: Well, that's actually a great question and there is unfortunately a technical answer like there is to most of health care. One, I think if COBRA is an option, in your employers case. So, if a company goes under, goes bankrupt, COBRA is not going to be an option for you. But, if you have COBRA as an option, and you work for a large employer, I think you're better staying with COBRA and taking advantage of the stimulus money where the government's paying for 2/3 of your premium. The reason why is if you go from a large group plan to an individual plan, you actually, under federal protections can actually enroll in the individual market. But the key is, you have to be going from a large group plan to an individual market. If you work for a small employer, that actually won't -- that option's not available to you.</s>WILLIS: Yeah, there are really limits on COBRA. I want go to the e-mail question, next. It's Marivick (ph) on Seattle, Washington. "Is there," she asks, "a good way to calculate how much to contribute to flexible spending." Those flexible spending accounts that Elizabeth just talked about, she says, "I need some kind of formula since it seems I always underestimate what I end up spending in the year." And you know how this works, Elizabeth, If you don't spend it, you lose it.</s>COHEN: Right, exactly. So you actually do want to underestimate by a little bit, because you won't be getting that money back. But here's what you can do, go to the sight for the folks that manage your FSA, it'll have everything written down. Next to everything, write down how much you spend. For example, it will pay for contact lenses. How much do you pay for contact lenses a year? You should pretty much know that. You can always call your eye doctor or whatever and ask how much you spend. So write down, how much do you think you spend on parking? How much do you spend on co-pays or co-insurance? Write it down and add it up. I would suggest backing off just a little bit, because as Gerri said, if you don't spend it, you're just going to lose it. So I think that's sort of a good, it's basically crunching the numbers. It's a good rule of thumb.</s>WILLIS: I love that, OK. Let's get to the phones, Christine in North Carolina has a question -- Christine.</s>CHRISTINE, CALLER FROM NORTH CAROLINA: Yes, hello. I saw you speaking about the FSA option. But, we have an HSA plan. And it's a very high deductible; it's actually a very low premium payment. And I'm wondering if that's a good option, something to continue with or something more people should be taking advantage of.</s>WILLIS: Do you mean high deductible plan, Christine?</s>CHRISTINE: Yes.</s>WILLIS: OK.</s>CHRISTINE: Ten or 15,000.</s>WILLIS: You know, that isn't something that we've actually talked about yet. And Andrew, I want to turn to you. A deductable plan, a lot of people are confused by these. Sometimes they're consumer driven health care plans. I'm not sure if that's a good name or not because it's a little misleading. Explain what they are and exactly why you might choose one of those.</s>RUBIN: Well Gerri, you I've talked about this before. You know I am not a big plan of high deductible plans, but they do play an important role in this country because they are less expensive. And the reason they're less expensive is because you are paying the first dollars out of your medical costs up to a high deductible amount. And those deductible amounts can frequently be very expensive, very high numbers. So you know, for people who don't have a lot of options, I think this is a great safety net out there. I think if you have options and you can afford to choose a different kind of plan with a lower deductible, you should do that. But the interesting piece is the HSA, which is basically, very similar to an FSA, but you can actually put money into it to pay for your costs up to a certain amount each year, tax free. And that money actually does roll over, unlike an FSA, where it doesn't roll over. And most of the expenses are similar to an</s>FSA. WILLIS: Elizabeth, do you want to chime in, here?</s>COHEN: That's right. You know what, Gerri, this is a little like going to Vegas. You might look at the HAS plans and say this is great. I don't see the doctor a lot, this is cheap to start off with. But, you don't know, god forbid, if you are going to get diagnosed with cancer or get hit by a car or something terrible and then you could be really stuck with a lot of high bills. So, it really depends, in some ways, on how much of a risk taker you are. Some people like Vegas, some people don't.</s>WILLIS: And well, if you have kids or let's say you have a condition already that you are being treated for, it's really a little risky to actually choose one of these plans. All right, we're going to talk more about that and a lot of other health issues. You know, we're just getting started. The point of today's show is to empower you with everything you need to know about open enrollment. E-mail me at gerri@cnn.com or you can call us, as we've been saying, 866-792-3399. That's 866-792-3399. More answers to your questions, next.</s>WILLIS: Welcome back to this social edition of YOUR BOTTOM LINE. understanding open enrollment. Still with us, CNN senior correspondent Elizabeth Cohen Welcome back to this of</s>YOUR BOTTOM LINE: understanding open enrollment. Still with us this morning, CNN senior correspondent Elizabeth Cohen and Sirius XM Doctor Radio's Andrew Rubin. Great to have you guys back. We're going to get right to the telephones, here. Helen in Delaware has questions about her kids or dependents graduating from college -- Helen. Helen, are you there?</s>HELEN, CALLER FROM DELAWARE: Yes.</s>WILLIS: Go right ahead.</s>HELEN: My question is, if you have a 19-year-old that's not going to college and that you've been doing their insurance, they've been on your insurance, how does that work? I mean how would you save anything, because once they take the -- the insurance takes them off of the policy you're still held with paying their insurance because if they go into a job you know they're not going to get anything that's going to give them benefits right away. So how does that work? Because they take them off at the age of 19. So, you know, you're still falling into the line of what do I do?</s>WILLIS: Yeah, I know, I think that's a great question, Helen. Let's turn to Andrew for a second, here. This is a big issue for parents. You know, how do I provide insurance to my kids, how long can I provide it. What do you say?</s>RUBIN: Well, certain state legislatures have passed insurance law that basically allows parents to keep their children on their insurance plans for a longer period of time. So, I'm not sure what the rules are in Delaware, but I would encourage this caller to check with Delaware and see if they've actually extended the state age limits. Secondly, you know, when the individual, the kid goes off the insurance, they should immediately, if they can, or certainly afford to, enroll in an insurance plan. These are healthy, young adults, these plans typically are a lot less expensive than for middle middle- aged people. And I would say, if you can afford it, get a plan right away. And you'd be surprised, there's a lot of insurance options available for healthy, young Americans.</s>WILLIS: All right, that's good news, then. Helen, I hope that answers your question. You know, we got an e-mail from Wendy in Virginia, she asks, "Do people on COBRA," and this is insurance for folks who are unemployed, "have to choose in open enrollment? I thought COBRA continued the coverage you had at the time you left your job." And I think, Elizabeth, you should take this one.</s>COHEN: All right, when you're in COBRA, you are just like any other employee except for the fact that you're unemployed. So, for benefits purposes, you are like any other employee. So, you should definitely check with your employer or I guess I should say your former employer, but I think the answer is that you do have to choose. You're just like any other employee, you have to make that option. Now chances are you're going to want to choose the least expensive one because you are still paying for it. You know, your employer has stopped that contribution.</s>WILLIS: All right. You know, when we look at this, obviously, people across the country are paying more. We were talking about how much more people are paying. I read recently that premiums have gone up 130 percent in the last 10 years alone. Do either of you have suggestions for people who are trying to save money right now? Elizabeth, how about you? I'm trying to save money on my health care, I'm trying to do the right thing, I'm going to have coverage, but I want to save money while I do it.</s>COHEN: I think one of the most important things you can do is take a look at the prescription drugs that you're taking. Too many people -- the doctor says you need to take A, B, and C when really, there may be other options out there. People don't like questioning their doctors, but it's your money. So if your doctor has prescribed a drug that turns out to be expensive, you can come back. Give them a call and say, look, I went to the pharmacy and got hit with sticker shock. Is there a $4 generic that might do just as well? Better yet, print out your $4 generic list from your neighborhood pharmacy, bring it into the doctor. When they prescribe something, if it's not on that list, ask them for something on that list. There's an excellent chance that it will work just as well as the fancy-schmancy name brand.</s>WILLIS: You can also do a prescription drug, bring it in by mail. You know? Don't go to the drugstore necessarily.</s>COHEN: Right, 90 days.</s>WILLIS: Buy it up front. You can save a lot of money that way. A frankly, a lot of employers are making you do that now to save money. We want to get to another e-mail. This is from Sandra in Massachusetts. She says, "Gerri, my husband and I are still working and eligible for Medicare. Our company provides an opportunely for us to subscribe to health care insurance. Last year the cost was about $550 a month. Where can I find out whether Medicare would be more expensive or less?" Andrew, this is a really difficult question, it's a very complicated question. What would you tell our viewer?</s>RUBIN: Well, first, you need to understand if you have insurance, you're over 65 and you're still working, your private insurance is primary to Medicare. So, they take over first. Medicare is great in comprehensive coverage, so you really need to look at whether or not you should carry Medicare and then buy a secondary policy. In terms of the premium, you have to go to medicare.gov or cms.gov and they'll tell you what the part D premiums are for your health care. I can't tell you the exact number, but there's a place to find it.</s>WILLIS: All right, well Andrew, thank you for that. Elizabeth, thank you. We're coming back, the phone number is, if you have any other questions, 866-792-3399. We'll be back in just a moment.</s>WILLIS: OK, choosing your health care is such an important decision, It may be the most important financial decision you make this fall. We're going to have some final thoughts from our guests here, Andrew Rubin, Elizabeth Cohen. Andrew, I want to start with you. What do you think that people really need to remember now when they're thinking about open enrollment, participating in these plans? What do they need to know?</s>RUBIN: Two things. No. 1, you must read your benefit plan options. Most people just sign up for what they had last year and they have no idea what they're signing up for. Now more than ever it is so important to read the material. It's not that hard to understand if you actually sit down and spend the time, it's the best time you'll take -- spend. And then lastly, Gerri, most plans have one free preventive medicine checkup a year with no co-insurance, no co-pays. Take advantage of it, it's money well spent.</s>WILLIS: All right. Elizabeth?</s>COHEN: OK, my one thing to think about is a corollary to what Andrew said. When you read through those benefits, take opinion to paper. Think about what your needs will be next year. You can't predict it entirely, but you can a bit. How many times do you see the doctor? Do you have regular MRIs or other kinds of tests that you need? Think about how much those are going to costs and then compare what it's going to cost you from plan to plan. That's what I'm sitting down and doing this weekend.</s>WILLIS: All right, so it's all about the numbers. You're going to check the math. And I want to add just one thing in here. I've got one point you don't want to miss. Make sure you participate. Some of the employers out there, if you don't participate in open enrollment, you're not going to have coverage. They want you to participate in the plan. Go to the meetings at the office. Make sure you understand what your options are. We hope we helped you today. Thanks for spending part of this Saturday with us. We'll be back next week, same time, 9:30 a.m. Eastern, right here on CNN. Right now, it's time to hand things back over to T.J. Holmes and Betty Nguyen.