If you’re responsible for a portion, if not all of your health insurance costs, you are well aware of the price tag that comes with the territory. While you can take the easy way out and sign up for the cheapest and most streamlined health insurance policy, you could end up contributing to your out-of-pocket costs considerably.
The smarter alternative is to do your homework so you can avoid making the following costly health insurance mistakes.
1. Focusing only on the premium and deductible
When you’re selecting a policy, it’s wise to look beyond the premium and deductible. (For those of you who are unfamiliar with these terms, the premium is your monthly payment and the deductible is the amount you are responsible for before your plan kicks in). There are other costs involved as well.
Unfortunately, I learned this lesson the hard way. Under my policy, surgical procedures were covered at 80 percent, leaving me responsible for the other 20 percent. I never really gave it much thought until an emergency arose, resulting in a $12,000 hospital bill. My portion of $2,400 was a tough pill to swallow, not to mention the $500 deductible that I hadn’t met.
However, remember that under Obamacare, your health insurance will pay for certain types of preventive care at no cost to you.
2. Failing to read the fine print
This is common among those who fit into the category above. Among the things you should pay close attention to are:
- In-network vs. out-of-network providers.
- HMOs vs. PPOs.
- Coverage options (i.e., surgeries, wellness exams, routine treatments).
- Referral policies.
William Byron, vice president of customer service operations for Geisinger Health Plan, told U.S. News & World Report:
The top mistake individuals make is not calling their insurance provider’s customer service team when they have questions regarding their coverage. The most common issues, including not having a prior authorization to see a specialist or visiting an out-of-network provider, can cost an individual more or may not be covered at all. Individuals should talk with the experts provided by their insurance company.
Failing to ask questions in an effort to gain clarity on those things you don’t understand will only cost you more in the long run.
3. Not shopping around
It takes energy and a bit of patience on your behalf to explore your options, but you can save hundreds or thousands by doing so. Circumstances change and so do providers’ pricing structures, so loyalty may not always be your best bet.
And while exploring your options, research the provider’s track history. If the reviews are shaky, you don’t want to get caught up with a company representative who’s fighting you over a claim.
4. Signing up for COBRA
The federal government mandates that COBRA continuation coverage be offered to many who leave their jobs for up to 18 months after separating from their employer. You may think it’s a nice gesture, but the true cost of coverage is about 102 percent of the full cost of the policy, versus the 25 to 30 percent that you were once accustomed to paying.
A smarter alternative? “Get price quotes at eHealthInsurance or find policies in your area at HealthCare.gov,” Kiplinger suggests.
5. Getting too much insurance
Do you really need all of the coverage you signed up for? For instance, a platinum plan under Obamacare will cover on average 90 percent of your medical costs, but the premiums are pricey. If you don’t go to the doctor often and have no chronic health issues, maybe a cheaper gold, silver or bronze plan would make more financial sense.
6. Assuming one size fits all
Everyone’s needs and medical conditions are different, so the policy that works for your co-worker may not work for you. It’s simple to get sucked into this trap during open enrollment period because you fear that the insurance representative is trying to sell you a bunch of add-ons that you don’t need.
Or even worse, the daunting policy workbook and confusing verbiage that lies on each of the pages are enough for you to make the decision to go with the flow.
7. Skipping coverage because you’re “healthy”
If you fall ill and desperately need coverage to avoid an exorbitant medical bill, you may be out of luck because the enrollment period has closed.
However, it’s important to note that those who are eligible to purchase health insurance through a federal or state online marketplace under the Affordable Care Act and failed to meet the deadline can still purchase insurance under the exception for qualifying events, such as the birth of a child, job relocation, adoption and marriage.
8. Not inquiring about discounts
You may qualify for a premium discount because you join a wellness program offered by your employer or your health insurance plan. And inquire about the discount for becoming a nonsmoker.
9. Using out-of-network providers
If your favorite physician isn’t within your policy’s network, be prepared to fork over the extra cash. You can avoid this issue altogether by doing your research beforehand to ensure that your doctor is an in-network provider for the policy you select.
If your physician recommends you see a specialist, make sure the specialist is in your network too.
10. Ignoring prescription drug coverage
Do you routinely take prescription drugs for a medical condition? Failing to sign up for a policy that includes coverage for your medications can become very expensive. Review the policy to ensure that it includes a prescription benefit and your medications are on the list.
What health insurance mistakes have you made in the past that cost you a substantial amount of cash?
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Szerlip & Co look to provide information on various aspects of insurance to secure your home, auto or business. Call today at 973-467-0400 to speak to one of our health insurance professionals or email us your questions.