Health insurance is one of those necessary evils in life. No matter how healthy you are or what kind of work you do, everyone needs to have health insurance. But choosing the right health insurance is not an easy task. Health insurance should be selected according to individual needs and circumstances — it is not a one-size-fits-all sort of product.
There is a certain amount of uncertainty involved in purchasing health insurance. After all, regardless of your current health status, it is impossible to predict the degree of health care you will need or how often you will need it over the next year or two. And even if you could, it can still be difficult to determine exactly how much out-of-pocket expenses would be incurred if you do get sick. The fact is, health insurance can be complicated to understand.
Buying health insurance without fully understanding details about what the plan covers is a mistake that can cost you money in the long run. This article will describe some of the top mistakes people make related to health insurance.
1. Insurance Terminology
Health insurance comes with its own terminology. When shopping for a health plan, you need to take time to learn the meanings of insurance terms like co-pay (the predetermined amount you will pay for healthcare services), co-insurance (the amount you pay for services after the deductible has been met — usually specified in percentages), and deductible (the amount you have to pay before insurance coverage begins).
Understanding what these and other insurance terms mean will help you choose a policy that will meet your needs. In addition, it will help prevent some potentially unpleasant surprises at a time when you least need them.
2. Insurance Premiums
Rather than looking at the big picture, sometimes it’s easy to get sidetracked and focus on a single benefit or policy feature. This can be the case when a low co-pay is offered. In some instances, this low co-payment can look so appealing that it overshadows a high premium rate.
It is always wise to compare plans and evaluate how the plan will be used. For example, if you usually only visit the doctor two or three times a year, a low co-pay will probably not make up the difference on what you will pay for a huge monthly premium. On the other hand, if you are frequently at the doctor’s office, the lower co-pay may be a worthwhile benefit.
3. Your Doctor — Your Network
Some cost-effective insurance plans are very restrictive about which doctors and healthcare facilities can be used. The flipside of that is most people prefer to visit their own doctors, offices, clinics, and hospitals of their choice.
However, if you choose a plan that does not include your doctors in its network and you visit them anyway, you will spend extra. If you know you will be receiving care from an out-of-network doctor, you may want to reconsider the plan you are choosing.
4. Your Prescriptions Aren’t Covered
Not all health insurance plans provide drug coverage, and there is certainly not a guarantee that all will cover the medications that you need. Before choosing a plan, be sure to check that the drugs you need are listed on the plan’s formulary. If not, you can expect to pay more for your medications.
5. Too Much Insurance
Believe it or not, it really is possible to have more than enough health insurance. Examples of this include buying more insurance when you already have comprehensive health coverage through an employer, or adding supplemental insurance that pays a lump sum for a specific illness. Although these types of insurance can be valuable under certain circumstances, if you already have good coverage, you probably don’t need them.
6. Your Share Is Too Much
Health plans with low premiums usually come with the price of high deductibles. On top of the deductible, you will be expected to pay high out-of-pocket expenses — this is the co-insurance. Because medical bills can add up so quickly, if you are unprepared, this can essentially cause you to go broke.
Again, it is very important to learn all you can about an insurance plan before you purchase it. Be prepared to deal with the circumstances it obligates you to should the worst-case scenario happen. One option is to put some of the money saved on low premiums into a savings account. This money can be a cushion to be used to offset the financial burden of a sudden health emergency.
7. Maternity Care
Not every health plan includes full maternity care — in fact, some plans may not include any prenatal care or maternity coverage at all. Obviously, this could be a very costly expense. If there is a possibility that a pregnancy is in your future, you will want to ensure your health plan includes maternity care.
8. Open Enrollment
Most employers offer group health plan offerings every year during open enrollment. It’s a mistake not to take advantage of this opportunity to revisit your health insurance plan and scrutinize its details. Take the time to compare it to the plans offered by other companies. Keep in mind that health plans change from year to year. This can include the coverage and costs, as well as the networks you are used to working with.
Be prepared to switch to another plan if it makes financial sense. The purpose of health insurance is to protect your health — but that protection should be as affordable as possible.
Most people believe that after they have selected an insurance plan, they are finished with the complicated process. But the reality is, this is something that should be given ongoing attention. As mentioned, health plans should be matched to your needs and circumstances.
Since your health can change as time passes, it just makes sense that your insurance needs will also change. Take the time to review your health plan today — it just might be time for an update!
Debbie Allen is a freelance writer, blogger, and online marketer. She likes to focus on information that is helpful to small business owners and other online marketers. Debbie also writes articles that address the accomplishments of business professionals like Gary Crittenden and Steve Wynn.