Health insurance may be one of the most critical annual purchases since it impacts your physical, mental, and financial wellness. Unfortunately, selecting a health insurance plan can feel overwhelming. With so many options, it can also be easy to make a mistake when selecting coverage.
This article explores five common missteps related to selecting a health insurance plan. Once armed with this information, it’ll be easier to avoid these mistakes and choose the best plan coverage for yourself and your family.
1. Rushing Through Enrollment Options
Many people rush when buying their health insurance or only rely on recommendations from friends, family and co-workers. Others may simply reenroll with last year’s choices. But health insurance provides personal coverage, so it’s important to research and find what will work best for your health needs and budget.
When it comes time to enroll in a plan, compare different policies and understand their coverages and associated costs (e.g., premiums). One of the best ways to ensure the policy is right for your health needs is to consider your medical requirements and spending in the next year. Don’t forget to confirm in-network coverage to ensure your preferred doctor, clinic and pharmacy are connected in the new plan. Then, you can find the most suitable plan and coverage in an effort to simplify your health care and make it more affordable.
2. Overlooking Policy Documents
Another common mistake is skipping through or not thoroughly reading the policy’s terms and conditions. However, carefully reading a policy is the best way to know what to expect from the health plan and what the plan expects of you.
As such, read the fine print on each plan you consider before enrollment. Reviewing the policy’s inclusions and exclusions will help you make an informed decision and potentially avoid surprise bills later on.
3. Misunderstanding Costs
A cost-sharing charge is an amount you must pay for a medical item or service covered by the health insurance plan. Plans typically have a deductible, copays, and coinsurance. Here’s what those terms mean:
- The deductible is the amount you pay out of pocket before your health insurance starts to cover costs.
- A copay is a flat fee you pay upfront for doctor visits, prescriptions and other health care services.
- Coinsurance is the percentage you pay for covered health services after you’ve met your deductible.
When shopping for a plan, keep in mind that the deductible is tied to the premium. As such, a low deductible plan may seem attractive, but understand that it generally comes with a higher premium—and vice versa. Consider keeping your deductible to no more than 5% of your gross annual income. When shopping for a plan, look closely to see when you’ll have a copay and how much it will cost for various services.
4. Not Taking Advantage of Additional Benefits Offered
Many medical carriers provide additional benefits for employees and their families. They can be very valuable to mental, physical, and emotional health and should be taken advantage of. These types of additional benefits could be wellness tracking apps, concierge medical services, healthy food choices, support for specific diseases (i.e diabetes), mental health services and tools, emotional well-being resources, disease management, and more. Be sure to take the time to learn about these additional benefits and where possible, take advantage of them better to improve your mental, physical and financial well-being.
5. Selecting Insufficient Coverage
People may hold back on purchasing certain coverage to pay a lower premium. While that may seem advantageous in the short term, you’ll be on the hook for out-of-pocket costs when facing a medical emergency. This mistake may be accompanied by physical, mental, and financial health consequences.
When selecting a plan, check that the policy provides adequate coverage for your medical needs and other essentials. The right health insurance can take care of yourself and ensure financial security.
Summary
Health insurance is an essential investment for you and your family. By avoiding common mistakes while buying health insurance, you’ll be better informed to enroll in a plan and other coverages.
As healthcare costs continue to rise, it’s more important than ever to carefully review available policies, consider your options and health needs, and, ultimately, select the best plan to protect your health and finances.
