Top 8 Health Insurance Mistakes People Make
This won’t cost you anything.
And they know a lot about saving you money.
That said, as professional health insurance experts, here are some of the biggest mistakes and misconceptions about health insurance we run into all the time.
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1. Thinking You Don’t Need Insurance Because You’re Healthy
Many people seem to think that they don’t need insurance just because they are healthy right now.
That’s a major mistake. And it can have financially catastrophic consequences.
Unexpected things like car accidents, sudden illnesses like heart attacks, or even a dog bite can happen to anyone, anytime.
These events can be very costly without insurance. Remember, even if you’re fit and healthy today, having a solid health insurance plan is essential for your financial safety.
2. Choosing a Plan Just Because it Has Low Premiums
Picking a health plan based only on its low monthly cost is a common mistake.
Sure, premiums matter, but they’re not the only thing to think about. Often, plans with lower premiums can lead to higher costs when you actually need medical care.
Always understand your maximum out-of-pocket exposure if you get sick or injured.
That’s your deductible coinsurance percentage, and copays, up to the Obamacare annual allowable maximum for health insurance products.
This way, you won’t be caught off guard by unexpected expenses.
3. Not Getting a Plan with Prescription Coverage
Prescription drugs are expensive. Especially when they are new and there are no generic equivalents on the market.
Some drugs cost tens of thousands of dollars per course of treatment. And sometimes more.
If your health plan doesn’t cover prescription drugs, you could end up paying a lot from your pocket. Make sure your plan covers the medicines you need. If not, look into plans that offer discounts on drugs.
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4. Going “Out of Network”
Many people in HMOs and PPOs inadvertently use doctors outside their plan’s network.
This can lead to large and unexpected medical bills.
Always check to see if your doctor or other provider is in your plan’s network before receiving services.
Generally, you can get much more flexibility to choose your own doctor from health sharing plans than from traditional Marketplace health insurance products.
Unlike HMOs, health sharing plans usually don’t have restricted networks, so you’re less likely to face out-of-network surprises.
Health sharing might be a better fit if you want more freedom in choosing your doctor, especially if you don’t have pre-existing conditions and don’t qualify for a significant subsidy under Obamacare.
Not sure what’s best for you? Talk to us! We make it easy to set up a free session with one of our Personal Benefits Managers.
Unlike most health insurance agents, our PBMs know both traditional health insurance and health sharing options inside and out.
5. Not Using a Health Savings Account (HSA)
Health Savings Accounts are one of the most powerful wealth accumulation and tax savings tools available to individuals in the tax code.
They offer a triple tax advantage, and effectively empower you to pay medical expenses with tax free dollars!
Plus, after you turn 65, it becomes a great resource for retirement savings.
To contribute to an HSA, however, you need to be covered by a qualified High Deductible Health Plan, or HDHP.
Because these plans have higher deductibles, premiums are generally lower than with standard health insurance products. Which helps generate cash flow that you can use to contribute to your HSA.
Watch a video on How Much Can an HSA Save in Taxes?
6. Overlooking Health Sharing as a Lower-Cost Alternative
Health sharing plans are a notable option often overlooked.
They’re not insurance, but for many, they can be a more affordable choice.
Generally, the monthly cost of a health sharing plan can be up to 50% less than a standard Marketplace insurance policy without any subsidies.
They can be a great match for people with no significant pre-existing conditions, and who don’t qualify for an Obamacare subsidy.
Unlike traditional ACA insurance plans like HMOs and PPOs that limit you to certain provider networks, most health sharing plans allow you to choose your own doctor, anywhere in the country.
Health sharing plans work less well for people with pre-existing conditions and for people who qualify for a significant subsidy for buying an Obamacare policy.
7. Not Meeting the Open Enrollment Deadline
Open Enrollment is crucial for health insurance—it’s the time from November 1st to January 15th in most states (though some states have different deadlines).
This window is your annual chance to enroll in or change your health insurance unless you have a qualifying life event. Missing this period might mean you’re stuck with a less-than-ideal plan or no coverage at all.
And if you’ve missed it, click here to explore your options and find ways to get coverage outside of Open Enrollment.
- Year-Round Health Sharing Enrollment: Remember, you can join a health sharing plan any time of the year.
- Pre-existing Conditions: Be aware that if you have pre-existing conditions, there might be a waiting period before your new plan fully shares the costs for treating those conditions.
8. Skipping Disability and Long-Term Care Insurance
An unexpected injury or illness can suddenly take you out of work for a long time.
While health insurance covers your medical bills, it doesn’t make up for the income you lose during this time. That’s where disability insurance comes in.
Health insurance also doesn’t cover long-term care needs like nursing homes, assisted living, or memory care. Even Medicare doesn’t cover these expenses.
To manage these costs, you’ll need to either pay out of your own resources – or own long-term care insurance.
This is a common gap in many Americans’ insurance coverage. Most people are dangerously underinsured for these significant risks.
But insuring against disability and long-term care is easier when you’re healthy. The best time to get this protection is now, while your health is good.
As we all know, your health can change at any time, without warning.
Contact a Personal Benefits Manager today to set up disability income insurance, long-term care insurance, or both.
The sooner, the better.
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Next Steps to Avoid Health Insurance Mistakes
If you’re unsure about your health insurance options, like health sharing plans or high-deductible plans that qualify for HSAs, a free consultation with a Personal Benefits Manager is the way to go. They’re here to steer you through the wide array of choices and help you pick a plan that fits both your health needs and budget.
Remember, you don’t have to figure this out on your own. Selecting a health plan can take up a lot of your time, but with the right support, it doesn’t have to feel like a burden.
Avoid common pitfalls in healthcare decisions. Reach out for professional advice today!
You can avoid falling into these common health care traps, and get professional help today.
For Further Reading: Higher 2024 HSA Contribution Limits Enable You to Save Even More on Taxes | How Much Money Can Health Sharing Save? | Escape From Narrow Care Networks: How You Can Finally Choose Your Own Doctor