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The New Pinch In Health Coverage

Autumn is sign-up season for the 161 million workers and family members covered by employer-sponsored health insurance. This year will bring more bad news: higher co-payments and larger deductibles. Some services that were fully covered, such as hospitalization, may be only 90% paid. Even so, employees are just bearing their share of a projected 12% increase in costs.

You'll see new plans, fewer options, and tweaks to old ones -- so you'll need to scrutinize the choices. And this may be the year to decide if extras such as dental and vision coverage are worth the expense.

Here's what you may find in your benefits packets:

CONSUMER-DRIVEN HEALTH PLANS These will be an option at more companies this year. The plans typically give the employee a $500 to $1,000 kitty to pay for health care, then provide insurance coverage after perhaps the first $2,000 in expenses. Many companies have pushed the plans the last couple of years, with about 10% of all employees having them as an option, though only about 1% have signed on. Still, this option might be for you if you're healthy -- or if the medical care you need usually isn't covered anyway -- and you can afford to cover the $1,000 or so before the insurance kicks in. Any unused money in your account usually rolls over to the next year. But stay away if you're likely to use more than the initial fund, or the $1,000 tab would be a problem.

HIGHER CO-PAYS FOR SPECIALISTS If it costs $15 to visit the family doc, going to an orthopedist might run $30 next year, says Scott Wayne, a consultant with the Mercer Human Resource Consulting firm. If you and your family see lots of specialists, this can add up.

RANKING HOSPITALS Medical insurers are starting to place hospitals in tiers based on how expensive they are or on some insurance company measure of quality. Once a hospital is placed in one of the less-favored groupings, you'll face reduced coverage if you use that facility, perhaps paying a $500 deductible rather than $200. If your company offers such a plan, find out which hospital your doctor sends patients to and how it ranks. Also, ask yourself if you're the sort who wants an expensive, cutting-edge teaching hospital when you're sick -- and whether you would rather pay for that with higher premiums now or simply absorb the greater cost should you ever need care.

HEALTHY BEHAVIOR INCENTIVES Some companies are offering incentives to encourage workers to improve their health by, say, losing weight or quitting smoking, says Mohit Ghose, spokesperson at the American Association of Health Plans, an insurers' trade group. The Tufts Health Plan awards points for healthy behavior that you can trade for vacation discounts and other goodies. If you've been planning to go to the gym and want to take a trip to Hawaii, this could be your personal version of synergy.

DENTAL AND VISION COVERAGE General medical coverage is a no-brainer. Who wants to face the risk of catastrophic medical bills? But the cost of eyeglasses or contact lenses is more easily managed. And dental insurance often comes with a $1,000 or $2,000 annual payout limit, so pricey dental treatments are not going to be covered in full anyway. Richard Ostuw, a health-care consultant at human-resources advisers Towers Perrin, suggests that employees first find out how much of the dental and vision premiums your company picks up. If there's little or no subsidy, as is often the case with vision plans, then the policy is likely no bargain.

The real test is to compare how much you would likely spend without coverage vs. what the premiums, deductibles, co-pays, and uncovered treatments together would cost you. (Few plans fully cover designer eyeglass frames, for example.) For some, signing up for the coverage every other year and timing checkups at the beginning and end of the year might make sense. Of course, the security of paying a set premium every month rather than $1,000 for a root canal right before Christmas is worth something. And, adds Ostuw, dentists and ophthalmologists often charge uninsured patients more.

Whatever options you choose, it's simply going to cost you more. At least make sure you're plunking down those extra bucks for the plan that serves you best. By Carol Marie Cropper

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