8 Health Insurance Mistakes and How to Avoid Them
Finding and getting the most out of your health insurance requires knowing what not to do. Here are health insurance mistakes and how to avoid them.
The vast majority of United States citizens and legal residents have health insurance. Simply having insurance, however, doesn’t mean that you have the kind of coverage you need to stay healthy.
There are thousands of insurance plans out there. Many of them have hundreds of provisions that change based on where you live and how much you’re paying.
All of those variables lead to several health insurance mistakes being committed by consumers. Those mistakes often end up costing people thousands of dollars and even their lives.
Our aim with this post is to help you side-step potential insurance problems by informing you where pitfalls exist. Below, we share eight insurance snags to watch out for.
1. Not Having Insurance
Among all of the health insurance mistakes you can make, the number one blunder is to not be insured at all.
Imagine being perfectly healthy, walking out into the street and getting hit by a car that speeds through a turn. If you survived, you’d be on the hook for potentially hundreds of thousands of dollars worth of medical expenses.
How would you pay for that without insurance?
Unless you have piles of cash lying around, it’s never a good idea to go through a day without insurance safeguarding your health and wallet.
2. Misunderstanding Costs
Insurance terminology is complicated. You have premiums, deductibles, co-pays, and more. All of those terms confuse consumers (according to some, intentionally so).
Despite the confusion health insurance terms cause, you must take the time to learn what terminology means so you can discern the value of your policy.
For example, if you find a policy that only asks $10.00 per month to cover you, you might see that as a good deal. What you may not know is that a policy that cheap might carry a $7,000 deductible (how much you’ll need to pay out of pocket before your insurance kicks in). It might also have a 50% co-pay (the percentage of your care expenses you’ll need to pay out of pocket in perpetuity).
Compare that to a $100.00 per month plan with no deductible and a 5% co-pay. That goes to show you how premium prices don’t necessarily represent the cheapest plans.
3. Being Unaware of Exclusions
Some cut-rate plans are cut-rate because they exclude services. People that opt into catastrophic plans, for example, may only be able to use coverage when they face life-threatening conditions.
Be aware of what your plan covers and excludes. That way, you’re never caught off guard when you go to bill your insurer.
4. Trusting Private Health Shares
Health shares are private groups that are typically run by religious communities. Members of these communities agree to cover each other’s health expenses if a community member needs assistance.
The problem with this arrangement is that many health shares have several exclusions regarding what they will and won’t cover. Some of those exclusions are tied to religious preferences.
Furthermore, given most health share’s small size, the possibility of financial insolvency is much higher than it is with a large insurer.
5. Accidentally Getting Out-of-Network Care
Some insurers have in-network and out-of-network providers. Insurers encourage customers to stay in-network by offering fuller coverage within that realm.
A common mistake that people make when working with their insurance is that they don’t take the time to understand which providers are in-network and out-of-network. Consequently, those people may accidentally take trips to out-of-network providers and will overpay.
Don’t be like those people!
Always maintain awareness of which providers offer the best deals and prioritize them.
6. Kicking Children Off of Your Plan Prematurely
The ACA allows parents to keep family members on their healthcare until they’re 26 years old. That means there’s no reason to kick your adult children off of your plan until that age.
Adult children, even those under the age of 26, could disqualify themselves from your plan by getting married.
7. Forgoing Shopping Every Fall
Fall means open enrollment for healthcare plans. Open enrollment means being able to look at all of the insurers in your state to see who is offering what.
Never miss the opportunity to look at what’s new during each enrollment period and to opt into the best deal. You may be able to save hundreds of dollars on better care just by taking a moment to assess your choices.
You can read more here about what to keep an eye out for when shopping for plans.
8. Missing Open Enrollment
One of the cardinal sins of healthcare is forgetting about open enrollment altogether. Per the ACA, unless you run into a qualifying life circumstance, you can only buy into healthcare during enrollment periods.
If you miss the boat, you’ll be left uninsured for the remainder of the year.
To see a list of qualifying life circumstances that enable out-of-cycle enrollment, explore this resource.
Avoiding Health Insurance Mistakes Will Positively Impact Your Life
As you’ve seen in this post, several health insurance mistakes exist which can derail your health ambitions. We’ve cautioned you against many of the most common slip-ups.
Understand that the issues we’ve outlined are by no means exhaustive. To safeguard yourself against all damages, talk to a local insurance advocate who may be able to advise on your situation more personally.
The more educated you are, the safer you’ll be!
Would you like more topical guidance on health insurance and related topics? If you would, we welcome you to browse all of the additional content we have available on our blog!
