5 Costly Health Insurance Mistakes to Avoid

Health insurance is complicated. There’s a whole dictionary of terms associated with it and the contracts have fine print that can escape even the most diligent consumer. As a result, it’s easy to make a mistake when you buy health insurance.

However, if you know ahead of time about some of the most common pitfalls, you can avoid them. Here are 5 costly health insurance mistakes to avoid.

1. Only Looking at the Deductible and Premium

You might think that the two most important numbers to consider when you buy health insurance are the deductible and the premium. In fact, you need to evaluate a lot more.

For example, some insurance policies only cover 70 percent or 80 percent of the overall expenses. It’s up to you to pay the difference. That could be the case even if you get catastrophic insurance.

Fortunately, some insurance companies offer “scenario” write-ups in their marketing literature. Those are stories that make it easy to determine the level of coverage you’ll receive. For example, the scenario might read something like this: “Susan bought our Type A Insurance and had a baby during the same year. Under that plan, our insurance would cover 80% of the costs and she would be responsible for 20% of the rest of the expenses.”

If you’re thinking about buying insurance from a company that provides scenarios to give you a better idea of how much you’ll spend on various types of health care services, make sure you evaluate them carefully to avoid sticker shock later on.

2. Not Shopping Around

Believe it or not, there are companies competing for your business as a health insurance customer. If you decide that you’re only going to take the first insurance that you come across, you could end up spending more money than you need to.

Shop around online. Compare plans and prices. Look for the company that’s offering you the best overall coverage for the best price. Be sure to also check reviews to make sure you’re getting quality coverage.

3. Over-Insuring

If you’re single and healthy as an ox, you probably don’t need platinum level coverage. If you don’t go to the doctor very often, you can probably get away with minimal coverage.

Of course, things are different if you have a family. In that case, you’re going to be making frequent trips to the doctor, especially if you have young children who need a yearly physical exam.

4. Skipping Coverage Because You’re Healthy

This is the other side of the previous point. Some people think that they’re so healthy that don’t need any coverage at all. If you’re in that frame of mind, you’re going to regret that decision if you get into a serious car accident or are faced with some other type of medical emergency.

5. Using Out-Of-Network Providers

Your insurance company has a list of so-called “in-network” providers. Make sure that, as much as possible, you stick to those providers and avoid using health care services out of the network. Otherwise, you’ll end up spending a lot more money when the bill comes due.

Your health insurance is one of the most important expenses in your budget. Make sure you avoid mistakes and get the coverage that’s best for you and your family.