Have You Picked Your 2010 Health Care Plan?

By Eileen A.J. Connelly, AP Personal Finance Writer

NEW YORK (AP) — The holidays may be starting to crowd your to-do list, but one thing you shouldn't let get buried under the tinsel is your health insurance coverage.

Open enrollment period, the annual window when people get to update their health insurance choices, is winding down. The opportunity to change coverage under some employer- and union-sponsored plans has already passed, but many will continue to accept updates for a few more weeks. Medicare participants have until the end of the year to choose or make changes to their Medicare Advantage plans and prescription drug coverage.

Picking from the options available can be confusing. There's an alphabet soup of HMOs, PPOs, HSAs, FSAs and other choices to decipher, so learning the terms is an important first step. Knowing what sort of care you've used in the past year is also key, because that should play a part in your choices for 2010.

Another factor is the doctors and hospitals you'll have access to. Doctors accept payment from different insurance plans, so if you are considering switching plans, make sure you know if you'll also have to switch doctors, or pay out-of-pocket for care that's not covered.

Learning the terms

Most insurance programs offer two kinds of managed care plans, health maintenance organizations, or HMOs, and preferred provider organizations, or PPOs. Premiums tend to be lower for HMOs, while PPOs typically offer a wider choice of participating doctors.

In addition, a growing number of companies are trying to contain costs by offering a type of plan that can chop premium payments by nearly 20%. But the plans, called consumer-directed health plans, or CDHPs, come with a big tradeoff in the form of high deductibles — up to $10,000 a year for family coverage.

Also growing fast are options like health savings accounts (HSA) and flexible savings accounts (FSA), both of which allow a person, and sometimes an employer, to set aside money before taxes to cover health-related expenses. These accounts are usually offered alongside a high deductible plan to help people pay out-of-pocket costs, and may also be available with more traditional plans.