The Affordable Care Act brought health insurance to the forefront of the public's collective consciousness, but that doesn't mean we're necessarily any smarter about how we use our policies. Everyone who has health insurance, whether it's from a private or government marketplace, should take care to avoid these common missteps.
Not focusing on the big picture. "The most common mistake people make when buying health plans is only looking at premiums and deductibles," says Abir Sen, co-founder and CEO of Gravie, a free service that helps individuals and employers comparison shop for health insurance. (For those who are new to paying for your own health insurance, the premium is your monthly payment; the deductible is the amount you are responsible for paying before your plan takes over and pays all or most of the costs.)
While they are important, Sen says, considering only premiums and deductibles is "kind of like choosing a car based only on the monthly payment and ignoring things like gas mileage, reliability, safety, maintenance costs and so on."
Sen says most people "don't read the fine print regarding how the terms of the plan may affect them if they actually get injured or really sick. This could be everything from the copay for doctor's visits ... how much the plan will pay out after the deductible is met, whether or not there is an added cost to seeing specific specialists and more."
Lawrence Thaul, president of Millenium Financial Inc., a company that specializes in designing company health, retirement and executive benefits plans, concurs. "People are reducing their initial out-of-pocket premium costs in many instances, but they are exposing themselves to more on the claims end," he says, noting that some companies have tried to expand their deductible limits up to $4,000 and beyond. In general, he adds, the health insurance industry has changed so much that you can't get a policy and forget about it indefinitely.
"Don't bet the house budget on a long-term plan which may not be offered next year. This is a one-year-at-a-time environment," Thaul says.
Not learning how your policy works. Ivan Williams, senior policy director for GetInsured.com, an online health insurance marketplace, says many people don't fully understand what's included in the "in-network" portion of their plan or what a deductible is.
There's good reason for that, of course. Health insurance is confusing, particularly when it comes to in-network pricing. But if you don't try to learn how your policy works, you risk spending more than you need to – possibly far more.
"For example, a hospital may be in your network, but the doctor you're seeing there may not be, so you'd be charged out-of-network prices, which are generally higher than in-network prices, for that doctor's services," Williams says.
He adds that individuals with ACA coverage will likely be protected from high out-of-network costs due to special rules in place. Still, he advises, "Check with your insurance provider before any scheduled procedure to be sure you fully understand what services and doctors are considered 'in-network' and where you may be exposed to out-of-network prices."
Deductibles are also a maze of confusion because some health care bills are subject to the deductible and some aren't.
"Some people think they have to pay their entire annual deductible before they can use their insurance to see a doctor, which isn't true," Williams says. This is also a little scary, since one can imagine consumers with health insurance still not going to a doctor, thinking they can't afford it.
And while plenty of consumers have been disappointed by what they discover in their insurer's policy, there are hidden gems as well, according to Jennifer Fitzgerald, co-founder of PolicyGenius, a soon-to-be launched national insurance education platform and exchange.
"Don't forget to take advantage of your health plan's perks, like gym membership reimbursements or free smoking cessation programs," Fitzgerald advises.
Not reporting changes to your insurer. This is not a mistake people currently make, but Williams suspects many people will in the future if they aren't careful. Now that there's a government marketplace for insurance through the ACA, Williams says you need to report any major changes to your income or household size to the marketplace where you bought your health insurance policy.
"For example, if you purchase insurance using tax credits and you end up making more money during the year than what you estimated when you qualified for tax credits, you could end up having to pay some or all of it back when you file your taxes," Williams says. "Conversely, if you have a new baby or your income decreases at some point during your policy, you could qualify for additional tax credits that will help you pay your monthly premium for the remainder of your policy."
Not bothering to consult your insurer when you have questions. Colonial Life & Accident Insurance Co. recently surveyed almost 400 employee benefits counselors about the top mistakes they see employees make during their annual benefits enrollment. They reported that 69 percent of employees don't read their benefits information before they enroll, and the same number don't know what benefits they have or what they cost.
William Byron, vice president of customer service operations for Geisinger Health Plan, headquartered in Danville, Pa., sees a similar lack of initiative in employees when it comes to finding out what's covered and what's not.
"The top mistake individuals make is not calling their insurance provider's customer service team when they have questions regarding their coverage," Byron says. "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."
He adds that information can also often be found on any insurer's website.
Overinsuring yourself. It's understandable if you do. You may plan on using your health insurance fairly often, and the last thing you want is a string of unpleasant billing surprises. So why not simply insure yourself for everything and go for a high premium and the lowest deductible possible?
It may work, of course, but be sure to crunch the numbers first. Sen says a lot of people lose money every year by covering themselves for services they don't need.
"It's almost like buying food at the grocery that you don't like simply because it's on sale and you want to save money, but then you end up throwing it away," Sen says. "There's no cost savings in that."