Episode 27 – What you need to know about HCA healthcare for 2024
Welcome back to Fund Your Future with DRS. Today, we’re continuing our talk about healthcare. And if you’ve ever thought about changing to a different health insurance plan, the time to do it is during open enrollment, which happens every fall. And in the studio today, we have Dave from HCA, who’s the program director of the PEBB and SEBB programs. Welcome, Dave.
Hi, everyone. Great to be here. I’m really excited to help everyone understand a little bit more about the PEBB and SEBB programs.
Yeah, just to start off with the basics, what does PEBB and SEBB stand for?
The Public Employee Benefits Board and the School Employee Benefits Board. Those are two separate programs administered at the Health Care Authority. The PEBB program is generally for state employees and that includes people at state agencies, higher education institutions, as well as a lot of local governments, cities, counties, municipalities, water districts, hospital districts, transportation districts. Anything that has the word district in it essentially can voluntarily join the PEBB program.
The PEBB program also covers retirees from all sectors, which includes K-12 members. K-12 active employees are covered under the School Employee Benefits Board program. So our K-12 members who might be listening, you start your active employment in the SEBB program, but when you retire, you transition to the PEBB program. If you’re somebody who’s a state agency or higher education employee, you start in the PEBB program.
When you retire, you stay in the PEBB program.
You might wonder why is that? And that was because back in the early nineties, there was a bill that started to consolidate all of those public employees from all sectors into a single program. But then the legislation changed, and after the retiree consolidation happened, it took 30 years till the SEBB program was made as a separate program. So that’s a little bit of as to why there’s that confusion.
Yeah. So obviously we’re here today to talk about how some of these premiums are increasing this fall during open enrollment for the health insurance plans. But to start off with the basics, what are some of the frequently asked questions that you get from retirees?
Yeah, and I’ll say we cover about 725,000 Washingtonians and about 110,000 of them are retirees. Wow. That’s both Medicare retirees, people who are eligible for Medicare, so age 65 or older, and the non Medicare retirees, which refers to somebody who has retired but is not yet 65. So whatever age, but you’ve not yet qualified for Medicare as we say it.
And from our retiree population, I’d say I get asked maybe three things on a regular basis. And so the first thing I want to reassure people about, if you’re a retiree listening, is that UMP Classic Medicare is not closing that there’s no plan, there’s no work or efforts to discontinue or close that plan. And so that’s the number one reassurance or question that I’m getting from our retiree population.
The second is what plans can retirees access that have nationwide coverage? A lot of people are familiar with UMP, the Uniform Medical Plan Classic Medicare plan that is nationwide. But there are other plans that also have nationwide networks. So that’s our Premera supplemental plans, both Plan F as in Frank and G as in Gary. Plan F is no longer open to enrollment, but Plan G is, and both of those have nationwide networks.
And then our United Healthcare PEBB complete and PEBB Balance plans that are Medicare Advantage plans that are offered and authorized by the PEBB board are also nationwide plans. So there are several options and all of those plans in some way, shape or form include travel benefits, which are often very important for retirees. The third question that we get asked quite a bit is people love plan F or G from Premera, but they really want to know can that plan be expanded to have vision coverage, hearing coverage, gym membership, prescription coverage?
And the short answer is no, because there are specific federal regulations about what it takes to be called a plan F or be called a plan G, and it has a very specific benefit design. And so by definition, a Plan G cannot have those benefits. It has to have a specific benefit structure. So if you want those types of benefits, we have those benefits in the other plan offerings, but they by definition, cannot be included in a plan F or a plan G.
So, Dave, I know I’ve been receiving some things in the mail. My wife, who works for school districts, has been receiving some things in the mail, letting folks know that we should be paying close attention during open enrollment and that some premiums are going up and folks should be doing some research prior to open enrollment. So could you just tell us a little bit about why monthly premiums are increasing next year?
Yeah, I’m really glad that you’re starting you’re hearing that message, our number one message we’re trying to get people to is to engage in open enrollment this year like you’ve never engaged before, so to speak. School employees had their inaugural open enrollment in 2020, and this open enrollment has the most significant changes and impacts that they should be considering since the program launched.
For PEBB employees, some state employees have not engaged in open enrollment in their entire career. I know that my deputy director adds that I’ve elected my plan in the eighties. I set it, forget it, and I never looked at it again. And I am really hoping that people engage.
If you’ve never engaged or haven’t engaged in a long time, because there are substantial premium increases and a variety of plans, but there are also some plans that may be more affordable that people haven’t looked at or they haven’t engaged in, seen in the portfolio, that there are more plans offered today than when they initially enrolled.
And that can be true for both the Medicare retiree or state employee. There aren’t new plans for school employees, but there are a variety of different options that may not have been available. So for the premium increases, you know, Kaiser Permanente plans are kind of the biggest news that’s there. There are some really substantial increases in the Kaiser area.
Almost all of the Kaiser plans are seeing some sort of double digit and in some instances triple digit percent increases for those premiums. And I want to highlight that this is not something that’s unique to our market. Kaiser has a variety of geographic regions across the nation. They have about 12 different regions, and they’re seeing changes and increases that are substantial in all of their markets.
So, this isn’t something that’s unique to just Washington is also not unique to just the PEBB and SEBB program. There are increases that are in individual market plans that people might go out and buy. So it’s not something that’s unique is one piece that I want people to understand. But really, Kaiser has expressed that there are a lot of workforce shortages.
I mean, we’ve been hearing about potential strikes in different parts of the country. We all know that many of us are have friends or colleagues or know people that have worked in the health industry and understand that there’s a lot of pressure in staffing levels, patient safety levels and things of that sort that are really driving a lot of workforce conversations and salary negotiations and traveling nurses that are coming in, or traveling staff that are more expensive than permanent staff.
And so they believe because of their integrated model, where they are both the purchaser and providing health care versus just an insurance company like some other parts of the market, that they are on the front end of scene coming out of the conglomeration of those effects that are pushing up their operational costs, which is spilling over into what they are setting as premiums for the plans.
And I do want to say that the PEBB board and SEBB board, did authorize these premium increases. The PEBB and SEBB boards, both were really at a point where they either had to accept the rates as they were presented last summer, or close the plans. And quite frankly, the boards really kind of voiced or if you go back into the minutes and the audio recordings of our board meetings, they were really frustrated with these premium increases, but they also didn’t want to take away the choice and simply then have everyone have to transition plans.
There are people who are in various treatment, courses of treatment, maybe for cancer treatment or organ transplant, that there may be a high burden for that premium increase. But they really want to continue the care where they are right now. And so the boards both really felt that it was important to at least maintain that choice and have people kind of evaluate their options and then see what the status of the plans can be in future years.
But for now, not allowing people to vote with their feet and vote with their dollars, but making sure that people were aware that these increases were happening.
So, Dave, you touched on this a little bit. What is the Health Care Authority, your organization, doing to address the increased premiums for UMP Classic and Medicare specifically.
So, I just talked a little bit about the Kaiser premium increases, but there’s also a substantial increase in the Uniform Medical Classic Medicare plan. So, this is specific for our Medicare retirees. It’s a premium increase of close to I believe it’s $95 or $96 a month each month next year. And this is on top of a similar increase that happened from 2022 to 2023.
So, this is the second year of a really substantial increase. We have a variety of materials on our website that go through some of the cost impacts and what is really driving the Uniform Medical Plan classic premiums increases specifically. That plan is run by the state, the overall liability for the plan is with the state. There’s not a profit margin with the Uniform Medical Plan.
It’s called a self-insured plan. So the employer, the state of Washington, has the total kind of end of day risk for all the claims that are paid out of that plan. And it’s run and administered by the Health Care Authority. And we contract out various parts of that work to Regence for the medical part of the plan and to Moda our Washington prescription drug services or ArrayRx there’s a variety of different names that that goes by that you might see on your card for the pharmacy side of the benefit.
But the structure of that plan is such that the Uniform Medical Plan does not qualify for really substantial federal subsidies in the way that the other plans in our portfolio do so without those subsidies, we’re left with. “Well, what’s the risk of the population that’s enrolled? What is, you know, with the demographics, their utilization, the cost of the services that they’re providing and our population is aging.”
We’re using more services. And in the last year or two, as people have moved to different plans because they’re focused on what they’re paying for premium, we’ve seen some of the healthier parts of our population move to other plans, kind of puts upward pressure on those premiums.
That makes sense and is interesting and very complicated. You sort of touched on this in your answer already. I’d be curious if you want to expand on what the Health Care Authority is doing specifically to try to address those increase in premiums.
Well, the way I’ve described it is the main way that the Uniform Medical Plan could qualify for subsidies for the federal government is for Congress to change the Social Security Act. So an act of Congress literally could open up this opportunity. And so we’ve been highlighting where we believe the law limits access to plans like the Uniform Medical Plan.
Director Burch and I met with the administrator of CMS last February, and we’re describing some of our concerns about the competitiveness of Medicare Advantage plans versus plans like the Uniform Medical Plan. So we’re directly speaking with the highest levels of leadership at CMS in D.C., we drafted a letter that was sent to the congressional delegation here in Washington.
That letter is published on our website, on our retiree engagement page for anybody who wants to find a copy of it. We also provided it to a lot of a retiree stakeholder executive directors and leadership. And we know that some of them have been using it as an advocacy tool as they speak with the congressional delegation.
But that’s the “let’s get Congress to change the law” mode. The other piece that we’ve been working on is over the last year, year and a half, we’ve been trying to help people understand what types of changes to UMP would or wouldn’t impact premium. There are some classic examples. We did not go through every benefit design idea that people suggested, but we did some of the greatest hits, if you will.
People will often ask “What if you just increase the out-of-pocket maximum? What if you doubled it? I’d be willing to pay a thousand or $2,000 more over the course of a year if it meant my premiums went down?” Or, “what if you created a different specialty drug tier for some of those highest cost drugs that had a little bit of a higher co-pay?”
Or what if… you know, “I pay $0.17 for my generic drug right now, I’d be willing to spend $5 on that generic drug. Maybe that would make a difference.” And we went through all those different ideas and the reality is none of those do any significant… in some instances, they make a negligible impact on premium for the vast majority of individuals.
And so, we did a presentation, I believe was in April of 2023, going through some of these just to show, “Oh, you could do that, but it actually is not going to net out as any difference in cost when you look at it across the year for 95, 98% of the population. And instead you’re going to have increased costs for 2 to 5% with no decrease net cost for the vast majority.”
And so, that isn’t where you’re going to get premium relief. And so, we help try to help people understand some of that. Then we did a survey of Medicare offered plans across the across the country and really discovered that as we had anticipated, we didn’t realize how unique Washington was. But there are really no other states that do it the way that we do or have plans that are as robust in coverage as UMP Classic Medicare that it really is a uniquely rich benefit that is offered in our state compared to every other state in the country. And we have more plan options than other states as well.
So, as we started looking at that, though, we realized there were a couple of states that had something. The closest to what they had for us was that they had a plan that has a different way that they’ve structured their pharmacy benefit.
And so, that’s where we’ve been focusing our efforts on right now, is what are the minimum changes that could be made to the Uniform Medical Plan classic Medicare’s pharmacy benefit to allow it to qualify for federal subsidies that it otherwise can’t qualify for. And I know that that’s a really scary concept for people because we’re talking about, “well, what would happen if drug coverage changed?”
It’s really important to focus on the minimum necessary changes. So we’re looking at exactly what drug formularies would change and we’re going to be able to present that information to the PEBB board next board season. I would encourage anyone who’s listening, who’s really interested in this topic to join and listen in on the public meetings that are in February, March and April.
I will also highlight that we have a legislative report that is due December 1st of this year. So just in a couple of weeks here, that really is, it will be published on our website and we’re looking at sending maybe a letter to all retirees. So that they can be aware of how to find this report.
Because one thing that this report does is, it kind of goes through the entire last year’s journey and stitches that together in one narrative. You don’t have to find ten hyperlinks on two different pages that on our website it is all there on each HCA’s website, but it kind of stitches it together in a singular narrative. But that core report would be a really good place for people to kind of see the big picture and the building of the story of the work that has been done by HCA in the last year and a half.
So, Dave, here at DRS, we help retirees pay their monthly premiums on time to HCA by offering pension deduct payment options. But with the increases in 2024, do you have any suggestions or concerns to raise awareness for retirees who use this particular payment method?
Well, first, I would like to highlight that we have about two thirds of all of our accounts that do pay premiums via DRS pension deduct, and it really is a very secure, safe and easy way to make those premium payments. The money just comes directly over from DRS to HCA. We apply it to the accounts and it’s all done and there’s very little risk of your premium ever being untimely paid.
But what happens when there are premium increases is people assume that their pension payments will continue to cover the premium the next year. And if there is a large premium increase and depending on how much their pension did or didn’t change on a COLA, that pension payment may no longer be able to fully pay the premium that’s owed HCA.
We can’t accept partial payment from DRS and DRS can’t send us partial payment either. Our systems aren’t set up for that kind of pro-rated ability. So what happens is if somebody’s pension payment doesn’t cover the full premium, that payment mechanism is turned off on their account and then the Health Care Authority will eventually start invoicing the retiree.
So, what we really encourage people to do, and if you’ve looked at your recent newsletter, retirees, it’s on page eight. I’ll just highlight that. There’s some information that reminds people to check your pension deductions and to kind of anticipate and look to see if you think you may no longer be able to use pension deduct and alert HCA.
Call us and tell us that you think that that’s the situation that’s going to happen so that we can get you on the proper invoicing cycle earlier rather than later. Eventually, the system will catch up. But if it’s the long path, the unfortunate situation that happens is a retiree will get their first pension payment of the year. It’ll be larger than they expect.
They won’t realize that their premium hasn’t been paid and when the first invoice comes from the Health Care Authority will actually be for two months premium instead of one month premium. And so we want to avoid that type of situation. So if you are someone who your pension payment that you get your net payment that you’re receiving from the DRS is relatively small, you’re more likely to have this situation happen to you.
So, with open enrollment in general, I guess for active employees and for retirees, what are the things that we all should consider when we’re looking or the possibility of changing, you know, medical insurance for next year?
The first thing is to think about more of the total cost that you will pay over the year, not just the premium. A lot of people focus, understandably, focus on the premium. That’s the amount that’s going to come out of your paycheck or out of your account or out of your pension payment each month. But, you know, that premium is really not the only cost that you’re going to have. Most of us are going to have some sort of engagement with the health care system during the year.
And so, the other parts of coverage that are really important is to understand what your deductible is. That’s the amount that you have to pay upfront. You know, you have to cover 100% of the deductible before your plan’s coverage kicks in. So if you have a deductible of $250, then you’re going to pay that full $250 before you start getting a split of charges on services.
And what I mean by split on charges of services is, you know, some plans have a co-payment model, a flat amount that you pay when you engage in services and others have a co-insurance model which is a percentage that you’re going to pay on the bill. And the plan will pay one part of the percent like maybe 80% of the bill, and you’re going to pay 20% that 80/20 coverage or that co-payment world doesn’t exist until you’ve paid your deductible.
So, it’s not just the premium that you’re paying every month, but it’s the deductible that you may face for services. And that deductible can range in some of our plans, through a wellness incentive, you can get it down to $0 and in other plans it can go up to $1,400 $1,500. I believe the high deductible health plan is set at $1,650 next year because of IRS rules.
So, it can range quite a bit. And then those co-insurance or co-payment models, it could be 15% or 20%. And so, if you know that you’re somebody who engages in a lot of chiropractic care or a lot of massage care, and you can see, oh, it’s, you know, $15, $20 a visit and I’m using those as illustrative examples.
You have to check the specific costs because each plan has a slightly different cost share that’s associated with it. But if you know “I go for ten visits and I am paying $20 a visit for those,” that’s $200 right there. And you can anticipate those needs out of the gate. And you might want to pick a plan that has a slightly higher premium if it has a lower co-pay, because some people like to pay more upfront, other people like to wait until the point of services.
But you really need to think about your premiums, your deductibles and you really need to think about prescription drug costs. And you may need to look…especially if you’re thinking of switching plans, you need to understand “is the drug I’m on today covered under the plan I want to go to?” And the really the best way to understand that is to call the new plan directly and understand and say, “I’m on X drug is X drug covered by you?”
And you can tell them I’m thinking of switching to your plan. They’re going to be very engaged in wanting to help answer that question to the best of their ability, because they know that not understanding if your prescriptions you’re on today are covered tomorrow, would be a barrier for you ever considering switching to their plan. So they’ll give you the honest answer, but they will engage with you on that.
And it’s something very important if you’re on prescription drugs to make sure you understand what is going to be covered under the new plan and what those co-pays or cost shares are going to be under the new plan so that you can kind of balance that.
Yeah, I love the example you gave earlier, kind of paying attention to what those particular costs are like. You might be able to switch to a different plan where maybe you’re paying $2 more for a particular prescription drug, but your premiums overall on an annual basis are like $6,000 less. And so it is important to go in and look at those figures and kind of see like, “okay, I could pay like a little bit more for these prescription drugs to get a lesser premium.”
Yeah, it’s absolutely important to think about the net overall costs. I know it can be frustrating to go pick up a drug that you’re used to paying, you know, $0.25 for every 30 days and now you’re paying $5 for it. But if the plan that costs where you’re paying $5 is $100 less than premium every month, you’d have to be picking up 20, 30 drugs a month for the $5 you’re paying per drug to offset that annual premium savings that you have.
So, it’s really important to think about that big picture, even though, yes, you might, under some one plan, pay a little bit more when you’re actually picking up your drug.
What are the resources? I know I got some stuff in the mail. I can read through those kind of high level overviews. But if I need to get into that kind of more nitty gritty detail to understand how much my massage appointments are going to cost, where are the best places to go for additional information?
So, on HCA’s website, there are a couple of different places. We have enrollment page, one that is dedicated for PEBB active employees and non-Medicare retirees, one that is for school employees and a third one that is for PEBB Medicare retirees. And so, we have specific open enrollment landing pages for each of those. And on each of those, there’s a variety of dropdowns and hyperlinks that get you to plan comparisons or a tool that you can say, I want to compare A, B, and C, I don’t want to see something that shows all seven plans.
I just want to see these three plans and it can go through and it will highlight those different cost shares. So that’s one place we also have a virtual benefits fair that’s available 24/7 via the website and then you can access it on mobile devices, laptops, iPads, anything.
And how does that work, a virtual benefits fair?
Yeah, it’s similar to our in-person benefits fairs, except you’re not in-person. You don’t get any fun swag.
So, you can talk to a person virtually?
Well, that’s the part that’s different. So I’ll start with a benefits fair and then I’ll describe the virtual, because our benefit fairs at the University of Washington started recently and then throughout the beginning of November, the end of October, again, remember, we have staff that are across the state and about 15 different locations for in-person benefit fairs our partners and insurance carriers and vendors are all required to be at those benefits fairs.
And so, they are a place for you to come and talk to people in person, whether they’re from the Health Care Authority or from the individual plans. And you can pick up different fliers and paperwork and comparisons and swag sometimes that they have and get questions answered in real time. The virtual benefits fair is designed to convey the same information, but without that in-person engagement.
So, there are virtual booths that have videos that you can watch. Now, there aren’t videos in the in-person benefits fair, but it’s designed… And we’ve asked all of the carriers to identify “what are, the couple of questions that you anticipate are most frequently asked?” And cover those in your videos so that you’re most likely going to get some of your key questions answered by the nature of the videos that they’ve made.
And they’ll have their fliers up there and then they’ll have plan comparisons and how to access the provider directory so that if you want to confirm that your provider is still anticipated to be in network or they’re in the new network of the plan that you’re thinking about going to, that’s an access point. So the virtual benefits fair, the in-person benefits fairs, our landing pages on the HCA website.
Those are all key places. And then you can just directly contact the plans as well. If you have a question that specific about what about a plan does or doesn’t do, and you can’t find the answer anywhere, you can just call them and again say, “I’m thinking about switching to your plan.” That right there is going to up the ante for their engagement in wanting to answer your question because they know if they can’t answer your question, that will weigh against your consideration of moving to that plan.
Yeah. So, we’re in this open enrollment period right now where people can change their health insurance. How do people go about changing that medical plan for next year?
Right. Well, the most important thing to know is when is the date that you have to make changes by? And it is different for the two programs for the school employee benefits board program for the active school employees, their enrollment ends on Monday, November 20th. That’s 11:59 Pacific Time on November 20th.
And for the PEBB program for both state employees, higher education employees and all retirees, that deadline is November 30th, 11:59 p.m. November 30th, 2023. And you have to make your changes and those changes have to be received by those deadlines not postmarked. They actually have to be received for school employees and for state employees who aren’t making their initial elections.
You have the ability to do that electronically online in SEBB My Account or PEBB My Account and so you would be able to go up until 11:58. I wouldn’t encourage you to really go to 11:59, but you could do your submission electronically online up until 11:59 on the applicable final date, again, the 20th for school employees and then the 30th for state employees.
For retirees many of the changes require an electronic signature and we will be rolling out a new system that will have the ability to have an electronic enrollment next year that won’t be for this open enrollment. So that means most people do need to submit a paper form. And that’s why it’s so important to keep that receipt received by deadline.
If you put it in the mailbox on the 30th, it’s not going to be received in time. And some of the reasons why it has to be received rather than submitted or postmarked by the day is there are certain pieces of information that the Health Care Authority needs to engage with the federal Centers for Medicare and Medicaid Services on for certain enrollments.
And so there’s these transactions and data files that have to go back and forth between the Health Care Authority and the federal government. And that has to happen in December. And we need to get all that done in time so that we can get out new enrollment packets. And anybody who’s newly enrolled in switching plans, their cards, and there’s just a very short window.
But so, for retirees, you can submit it. There’s a fax number on the form, there’s a post office box. If you are in the Greater Olympia area, you can drop it off at the Health Care Authority in person in our lobby. Those are all mechanisms, but I encourage you to, as a retiree, consider a live benefits fair in the beginning of November. Make that decision and in your mind, think of it as “I’ve got to get it in the mail before Thanksgiving.” Luckily, Thanksgiving is almost a full week before the end of the month this year, but the earlier you can submit that the better.
And you should have already, as a retiree, received a customized packet in the mail about your specific current enrollments and information for you to be able to research your plan choices for 2024. The forms are available both online and you’ll be able to pick them up at benefits fairs if you go to them as well. They can be downloaded off of our website as well and filled out. Just submit it earlier is my recommendation.
So, for Seth and myself, who are active and employees who have been working for the state for a couple of years, we can just go online and make those changes directly online without having to fill out a paper form.
That’s absolutely correct. The one other thing that I should highlight for retirees is that open enrollment for the PEBB program is different than the federal Medicare open enrollment period. You will probably have already seen commercials talking about. “You have until early December to make your changes.” That’s what CMS is describing in all of their news and that’s what the Joe Namaths of the world and all the other famous actors that are in all of the commercials are doing.
They’re describing the general insurance market. They’re not describing kind of individual public or private employers, retiree benefits offerings. So don’t be confused by the deadlines you see in the news or in commercials, because those are not applicable to the PEBB program. The PEBB program’s, open enrollment ends 11:59 on November 30th of 2023 for PEBB retirees and active PEBB employees.
I really appreciate how much your office sends information in the mail. It reminds me that I need to look at something and gives me general information that I can then find additional resources on. But I’m curious what the best ways for both active employees and retirees to stay in the loop about health care related things going forward. You mentioned some websites some accounts….just curious if there are other places folks should be going?
For kind of like the latest greatest hot topics that are kind of anticipating upcoming future changes or policy discussions. It’s actually the board meetings. We have separate public meetings of the PEBB and SEBB boards. January through July is board season with the full rate development process in the public eye, really in that June to July area. The broader policy conversations and potential changes in eligibility rules or some of the benefit design changes, that tends to be more in the spring.
Though if you go on to HCA’s website, one of the best ways to do it is just type in “PEBB meetings” or “SEBB meetings” and then you’ll get to get some links, some search results that say “meetings and materials.” And if you click into those, you’ll see all the meetings and materials information. From the past couple of years, the resolutions have been acted on. And at the very top of that is also a call-out box. I believe it’s in bright blue that says, “do you want to stay informed about what’s happening with the board? Sign up for this listserv.” And then you’ll get notifications of those materials being available. And you can see the things that are up for discussion and the presentations that we’re making publicly for the board to help guide and shape and make recommendations to the board about how things can be refined or changed in the future. We’re describing what’s happening during the legislative session for bills that are impacting or could impact our bills, our programs.
It’s really a good, fertile ground for understanding having the policy discussions that are happening for both the near and short term.
One of my takeaways from this conversation has been like, it’s really easy to have inertia, like you set it and forget it, which is oftentimes great when we’re talking about retirement stuff. You set your DCP contributions at 5% and you…but, kind of with everything financial that Jenny, you and I have talked about on the podcast as well as like it is also good to go back and check am I on track, where am I at?
Oh definitely, yeah. Like we talked about with budgeting, going in and checking your budget once a month.
Yeah, and open enrollment is the exact right time to be doing that for your insurance coverage as well. And I’ve really appreciated the perspective of looking at the total cost of the services, the plan that you’re in, not just the premium, not just the deductible, not just the cost of service, but all of those things put together and figure out how much should I spend, ideally, how much I spent last year, how much am I thinking about spending next year?
I know when we had Kelsie from HCA on the podcast, she was talking about planning for having a child and understanding what that cost was going to be and what are the services that are covered. And I think those things are really important for everybody, no matter what stage they are in life. And I know, Dave, if you have other thoughts about that, of things that people should be considering kind of in totality.
I think it’s just important to realize that and this isn’t a judgment call. It’s just kind of what the numbers show is as we get older, whatever age we’re going to use more services. And so, you know, it’s natural for people to feel healthy today and then suddenly something’s happening tomorrow. And so it’s just really important to not underestimate, you know, that as we go further in life and further in retirement, we’re going to have health care expenses.
Tomorrow’s expenses are going to be greater than they were last year. From an actuarial standpoint, we all are getting riskier every day that we live. It’s really unfortunate that that that tends to happen. And if we were able to reverse time, then we’d have a whole lot of other expenses in society. It’s just important to not underestimate that you will have expenses.
I mean, there’s countless financial analysis done about, you know, one of the most significant costs of retirement is health care. You know, we’re going to spend, I think, $300,000 or $400,000 each, in today’s dollars in in health care expenses during the course of a, “normal retirement.” Because what I don’t want people to do is to sign up for a plan.
Then something happens. They’re like, “oh, I can’t afford that deductible.” And then they’re weighing whether they should have treatment or whether they should face that deductible now. When the reality is, the longer you postpone care, the more expensive it’s going to be for you and you’re not going to be the best you that you can be today. You’re going to be dealing with whatever condition you’re not having managed because you’re considering not going to the doctor because you don’t want to face the deductible, the plan because you focused on the premium and you were glad to have a low premium today without realizing the deductible you’re face later.
Whereas, you know, some people from a budget mindset, they’ll go, “Oh, I’d rather pay more upfront on a predictable monthly basis than to save for the bigger expense that might happen later in the year.”
Yeah, that’s a really good point of trying to make sure your plan matches you as well. And if you’re choosing a plan with a higher deductible, making sure you have an emergency fund set aside to cover those inevitable costs down the road and making sure that you’re thinking about it in your overall financial life. Well, thanks, Dave.
Yeah, thank you so much. We really appreciate it.
Yep. I really enjoyed being able to collaborate with the DRS to work on reaching out to the members that we both serve, every day. There’s a lot of overlap and a lot of opportunities to cross collaborate. And this is just another great example.
Thanks. Thank you.
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