Health insurance can be expensive, but not having it can be an even bigger mistake. Did you know that the average cost of an emergency room visit in the United States can cost upwards of $1,233 per visit. If you don’t have insurance, you could end up paying this bill out of your own pocket. There are several common mistakes people make when it comes to your health insurance, and you don’t want to make them if you can help it.
1Picking Health Insurance with a Low Premium
With health insurance, your premium is the amount you pay each year for your healthcare before your insurance covers the rest. A lower premium means that you’ll pay more for any co-pays or deductibles after you have the services. A higher premium means that you pay more upfront, but the costs go down once you pay it.
If you’re generally healthy and if you have a decent financial cushion that can handle a more significant medical bill, you may benefit from having a lower premium. If you have ongoing health issues, a higher premium may be better because it’ll reduce the costs of your visit expenses.
2You Only Use Employer Health Insurance
Insurance through your employer might be a most cost-effective option, and it might seem like the best deal upfront. If you’re relatively healthy, you can usually find cheaper options because the employer’s insurance rates are based on their employee’s average health statistics. It is essential that you shop around and compare health insurances.
Additionally, many employer health plans cover routine doctor visits and even emergency room costs, but they might not have vision or dental options. It’s essential that you shop around and look at your employer’s plan to see what services it’ll cover and which ones you’ll have to pay for.
3Not Reading all of the Fine Print
Health insurance can be very dry and difficult to understand. This is why a lot of people don’t read it, and they assume that whatever they have done will be covered by their insurance plan. This isn’t always the case, and you could get a nasty surprise in the form of a large bill.
The fine print on your insurance information will tell you everything you need to know about your plan. It’ll let you know whether or not specific services are covered, what your co-pays are, what percentage of hospital stays the insurance will cover per day, and how much you have to pay out of pocket before your insurance picks up the rest.
4Don’t Find out if You Have an HMO or a PPO Plan
HMO insurances have strict in-network and out-of-network fees they can charge. It also dictates which doctor, clinic, or hospital you can visit and have your insurance pay for it. A PPO plan is more flexible, and it lets you choose your doctor or clinic, and it can also be more lenient with in-network and out-of-network care.
A POS plan is a hybrid plan of the HMO and PPO plans. These types of programs let you see out-of-network doctors and clinics, but they usually require that your primary care doctor gives you a referral so you can go to them.
5Skipping Health Insurance Because You Never See the Doctor
Life and accidents happen, and your health is one thing that you don’t want to be unprepared for. This is especially true because healthcare costs continue to climb, and even routine doctor visits can cost you over $150 per visit.
If you decide not to get insurance and you need medical care, you’ll most likely have to pay for everything out of your own pocket. Many insurance companies refuse to backdate their services, so you’re out of luck and on the hook for the full bill amount.
6Ignoring Your Flex Spending Account
Many employers let you set aside a percentage of your check into a flexible spending account tax-free. These flexible spending accounts help you pay for medical bills that your insurance won’t cover. These non-covered services could include eyeglasses, dental, emergency room visits, co-pays, prescriptions, and deductibles.
Your flexible spending account can also help you reduce the amount you claim on your yearly taxes. If you have a taxable income of $80,000 each year, your annual tax amount is 15 percent or $16,000. If you’ve managed to save $3,000 in your flexible spending account, your taxable income goes down to $77,000. The amount the government claims as taxes drop as well.
7Not Having Prescription Drug Coverage
Did you know that a lot of insurance plans don’t cover prescription drugs? While this may not be a big deal if you don’t take them regularly, they add up quickly. Certain prescription costs have gone up by as much as 10 percent, and you don’t want to get stuck paying for these on your own.
Take a look at your current policy and see if it covers the medications you routinely take. You might have to call your insurance company and ask about your specific medications, especially if they’re more expensive. You could also ask your doctor if any generic versions of your medicines exist because they’re usually cheaper.
8Not Renewing Your Insurance Each Year
Almost every health insurance plan requires you to renew it once a year. State plans may require a renewal every six months. Make sure that you don’t forget about your annual or semi-annual renewal paperwork. If you don’t get it, call your insurance company.
Once your insurance lapses, it may be difficult to get it active again for the same price or on the same plan you had before. If you have medical services during the time your insurance lapses, it may not backdate and cover those services. This could cost you a lot of money and drain your finances.
These eight health insurance mistakes are very common, and you want to avoid them at all costs. Your health is important, and you want to make sure that you can get the care you need when you need it.