With a new year comes new insurance benefits, copay costs, and deductible resets. Here’s what you need to know about potential changes to your coverage when your plan updates on January 1st.
What is an insurance renewal?
Many insurance companies adjust their rates and offerings each year, giving you the opportunity to select a new plan or renew your current coverage. Through this process, insurers can update their plans based on inflation, the introduction of new medications, and other market changes. It’s also a chance to revisit your health insurance needs every year.
If you had health insurance this past year, you likely went through an “open enrollment” period in the fall. During that time, you learned how your plan was changing and which benefits would continue. You then had the opportunity to renew your current plan for another year or switch to a different option.
Why are insurance renewals important right now?
Most health insurance plans operate on a calendar year, so any changes take effect on January 1st. We recommend reviewing any changes to your plan to avoid unwelcome surprises later.
Which insurance updates might impact me the most?
As you review your yearly changes, make note of the following, as these updates could affect your budget.
Your monthly premium
Your premium is the cost of your health insurance plan each month. It’s common for your premium to change slightly from year to year, so be sure to double-check if yours is going up.
Your copays and deductible
Your deductible is the amount you have to pay for healthcare services before your insurance provider starts to help cover the costs. For example, if your deductible is $2,500, you will need to pay that amount for covered services on your own before your copay kicks in. Some plans have a combined deductible, covering both medical and prescription costs, while other plans have a separate deductible for prescription medication costs.
Your deductible resets at the beginning of the year, which could mean a significant uptick in your healthcare expenses until you spend enough to cover your deductible. Make sure to budget accordingly.
Your copays and coinsurance — the amount you’ll owe for healthcare services after you’ve met your deductible — may also change. Different types of health services can have different copays, so look closely at the ones you think you’ll use most often.
Formulary changes
A formulary is a list of generic and brand-name medications that are covered by your insurance company. It includes tiers that indicate which medication versions are preferred by your insurer and therefore offered at a lower out-of-pocket cost for you.
If you have current prescriptions, make sure that your plan still covers those specific medications. You may also want to find out if there is a more affordable version of your medication that you can discuss with your healthcare provider. If you fill your prescription with Alto, we can investigate the options for you and let you know of any alternatives that could lower your costs.
For more on common insurance terms, we recommend this helpful glossary from JDRF.
What can I do if my medications are more expensive?
Combing through insurance updates can be confusing, especially if you discover that you have to pay more for your medications this year. If copay changes and deductible resets affect your out-of-pocket expenses, Alto will search for any available savings to offer your medication at the best price we can.
If your insurance company requires a written request from your doctor to keep you on the same medication because of formulary tier changes, we’ll coordinate this process with your doctor and keep you informed the whole way.
Read more about prior authorizations here.
Is there good news?
Yes! Your updated insurance plan may have new benefits that can save you money and support your health. Look for bonus perks like these:
Free annual exams and preventative care
Discounts on fitness and nutrition programs, gym memberships, chiropractic care, and more
Savings on health and wellness products
Reduced vision care rates
Many people forget to use these extra benefits, which can mean money left on the table, so be sure to take advantage.
The benefits of a better pharmacy
As you make your health plan for the coming year, don’t forget the benefits of choosing a better pharmacy. With Alto, you’ll get support with insurance and savings investigations, plus convenient home delivery of your medications and access to expert pharmacists seven days a week.
Reach out any time through secure in-app messaging or by phone at 1-800-874-5881.
This content is not intended to be a substitute for professional medical advice, diagnosis, or treatment. Always seek the advice of your physician or another qualified health provider with any questions you may have regarding a medical condition.
Editor’s Note: This post was originally published in January 2021 and has been updated for accuracy and completeness.
