How to choose the right healthcare plan as costs climb

All right, brace yourselves. Health insurance premiums are about to see a double-digit increase in 2027. That's pretty awesome. That means choosing the right benefits during open enrollment. I don't know. If I didn't laugh, I'd cry, Michael. Open enrollment matters now more than ever. Back with us, financial instructor Michael Mazarin from the Retirement Education Foundation to help us navigate. The options and figure out how to get the most out of your health savings account, which is that's a different kind of health insurance. We'll talk about that in a minute. So, Michael, why the price increase, first of all? Well, just like everything else, prices are not going down for health care costs, for things like medications, for hospital stays, for the budget to run hospitals. Everything's going and getting more expensive, just like everything else in life. And so they're increasing the cost of not just the premiums, but also the cost of the services for all things related to medical needs. Yeah. 10%? Makes sense. Something like that? Yeah, it can be up to 10%. And this is where people make a lot of mistakes, unfortunately, is everyone is so laser focused on the premium. And I totally get it. It's because that's what we see coming out of our paycheck. We're paying every single month. So that premium number is right in our face every single month. So people are always laser focused on the premium. However, when it's time for open enrollment, like it is right now, it is really important to look at not just the monthly premium. Look at the monthly premium, look at the network, look at the total out-of-pocket costs if you have a medical expense that pops up. Because unfortunately, a lot of people pick the cheapest monthly premium, because they're thinking that'll save me money. But then if something happens during that next year, knock on wood, hopefully not, and you need pretty severe medical care, Because you have the cheapest monthly premium, you have the highest out-of-pocket costs, and that can really crunch someone's financial health. So what factors? I know when I had babies and growing children, I had different needs than I do now as far as doctor visits and wellness visits and all those things. So that's all. You kind of have to really take a look in the mirror and look at your family dynamic, right? For sure. For example, before my wife and I had kids, we... Didn't see the doctor very often. We're pretty healthy people, thankfully. And we didn't need more doctor's visits. But now we have two kids, and it is constant checkups and doctor's visits. And now we're getting sick more frequently. And all these things happen. And so if you're going to be going to the doctor more frequently, if you have a family that is going to, you know. If you have kids in sports and they might get injured or things that these things that pop up, having better protection to avoid those huge medical emergencies from a cost perspective are really important. And whether it's investments or just health insurance, the education of it is is so important because, Michael, how many people in a private private employer just roll into their next plan? I'm thinking it's the one that they had the year before, and then they go to the doctor and they're like, wait a minute, what? Yeah, these things change year to year. And also, I mean, to your point, people, they get those two, the sheets that compare the three or four different options and the sheets. Do not make it easy to break down the differences, your eyes glaze over, and they just go, ah, last year was fine, next year this will work, and check the box and move on, but trying to really break down, that's where, honestly, tools like AI tools, you can upload it and ask the AI, can you break down, and I tell it all the time, explain to me in layman's terms the differences between X, Y, and Z, and it'll break it down pretty easily, so these are tools that people can use to better educate themselves, because again, the education Education is so important. And Dina, one thing you mentioned about HSAs. Yeah, let's talk about the health savings account. So that's an option. And I find here at work, I don't know anyone else who does it. I'll say I have the HSA. With United and nobody else has it. So it's not something that I think a lot of people understand the benefits of or maybe doesn't work for everybody. But yeah, explain why it's good. So HSA stands for Health Savings Account. And it's the only account that exists that is triple tax advantaged. You get a tax deduction to put money into the account. The money grows tax free. And you can withdraw the money tax free. So triple tax benefits. As long as that money is going for health-related costs. And the reality is, at some point in our lives, we're all going to have health-related costs. So that money that's being saved for health expenses is fantastic. Fantastic. The slight challenge for an HSA is that you only have access to that account if you have a high deductible health insurance plan. So if you chose a lower deductible health insurance plan, then you don't have access to the HSA. So when you're making those options, if you're right on the fence, high deductible, low deductible, the HSA could be a pretty important tiebreaker to tilt you in the favor of high deductible health insurance plan. Are you, well, I guess we're running out of time, if you're like 40 and you do it and And heaven forbid you get cancer. You're playing like... I want to say a little bit of Russian roulette, a little bit. Like, that's a pretty significant cost, right? For sure. These are the things that, you know, the reality is, unfortunately, things happen to people all the time. Yeah, but you mean if you have an HSA? Yeah. Yeah, I mean, but if you get a catastrophic health event, you eat up all that, you spend the money, so you meet your deductible. And that's sort of the point of the HSA is that you don't have a health event. You can save into the HSA, get the tax benefits. The money's growing for you. It's invested while it's growing. And that account, you don't have to use it at the end of the calendar year. Correct. It used to be. Remember, it used to be you had to use up all that HSA money. What are we doing? What are we doing? FSA, different account. The HSAs have more long-term growth potential. The FSAs. What are we all doing here? Yeah, you can use it when you're 80 years old. Oh, my gosh. And it will have grown. I want to live to 120, so I'm gonna need all the help I can get. We'll be right back.