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.
What health insurance mistakes have you made in the past that cost you a substantial amount of cash?
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