It’s open enrollment time for health care, but exchange traded funds (ETFs) might feel the pinch of limited menu options many employers are providing.

Many employees are looking at their possibilities and finding that their options are few and that coverage may be either sparse or expensive. Typically the offerings now include a health plan with a financially daunting feature: a high annual deductible that is likely to be $1,100 or more for an individual, and much higher for family coverage, reports Milt Freudenheim for The New York Times. And conventional insurance deductibles are actually one-third as high as these.

High-deductible plans are the only ones available at many companies. A lower premium plan may not compensate for the huge out-of-pocket expenses they will make before reaching the high deductible. Much of it is a personal lifestyle choice and individuals will have to decide what works for them.

With fewer options on the menu and skyrocketing deductibles, will people be willing to pay out of pocket? If not, it could hurt the health care and pharmaceutical industry. After all, as consumers have to spend more of their own money, they might be more selective in how they use it.

People already are scaling back in many areas and health care may be next. A ray of hope may lie in President-elect Barack Obama, who has a new health care plan for Americans that experts are agreeing will take the sting out of health care coverage for many.

Under the new system, many people who cannot afford health care coverage may be covered through their employer or the government, reports dbtechno. Businesses will need to lower their premiums for their employees and the employer pays into a government fund. The total cost is $50 billion to help cover some of the 47 million Americans who are not able to afford insurance.

Related ETFs:

  • iShares Dow Jones U.S. Healthcare Provider (IHF): down 52.3% year-to-date; Aetna (AET) is 7.2%; Wellpoint (WLP) is 9.6%.

Health Care ETFs

  • Health Care Select Sector SPDR (XLV): down 28.4% year-to-date; Pfizer (PFE) is 9.3%; Johnson & Johnson (JNJ) is 14.5%.

Health Care ETFs

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.