Avoid the Pitfalls of Health Insurance during Open Enrollment

1. Ignoring Plan Changes

Many people assume their current health insurance plan will remain the same year after year. However, providers often update their networks, coverage details, and costs. A plan that worked for you last year might no longer be the best fit.

Tip: Review your current plan carefully. Check for changes in premiums, deductibles, copays, and covered services. If your preferred doctors or medications are no longer covered, it’s time to explore other options.

2. Underestimating Healthcare Needs

Choosing the cheapest plan to save on premiums might seem appealing, but it can backfire if you have unexpected medical expenses. A low-premium, high-deductible plan could lead to significant out-of-pocket costs if you need extensive care.

Tip: Evaluate your past healthcare usage and anticipate future needs. If you have chronic conditions or upcoming medical procedures, consider a plan with lower out-of-pocket maximums, even if it means a higher premium.

3. Overlooking Ancillary Benefits

Dental, vision, and supplemental insurance might not seem essential, but they can save you money and enhance your overall health. Many people skip these add-ons, only to face high out-of-pocket costs later.

Tip: Look for plans that offer affordable ancillary benefits. Bundling these with your health insurance can provide peace of mind and financial protection.

4. Misjudging Income for Subsidies

If you’re purchasing health insurance through the Marketplace, your subsidies are based on your income estimate. Underestimating your income could lead to a subsidy repayment when you file your taxes. If you're making too much money to qualify you may consider options that are not based on income to avoid having to pay subsidies back or paying too much.

Tip: Be as accurate as possible when projecting your income. If your income fluctuates, update it in the Marketplace throughout the year to avoid surprises.

5. Skipping the Fine Print

Insurance jargon can be confusing, but skipping over the details can lead to unexpected costs. For example, some plans require prior authorization for certain procedures, or they might only cover out-of-network care in emergencies. Make sure your agent covers everything your plans does not cover and make sure you know your Out of Pocket Max (OPM)

Tip: Take the time to read the Summary of Benefits and Coverage (SBC) for each plan. Look for hidden fees or limitations that could affect your access to care.

6. Waiting Until the Last Minute

Procrastination can lead to rushed decisions, missed opportunities, or even losing coverage if you fail to act in time.

Tip: Start researching and comparing plans early. Use online tools or consult an insurance professional to make an informed choice before the deadline.

7. Not Considering Tax-Advantaged Accounts or HRA plans

High-deductible health plans (HDHPs) often pair with Health Savings Accounts (HSAs), which allow you to save pre-tax dollars for medical expenses. Many skip this option, missing out on significant savings. Also, consider private plans that qualify for health reimbursement accounts (HRA's) that make them 100% tax deductible without the need of savings accounts

Tip: If you’re eligible for an HSA, take advantage of it. Contributions are tax-deductible, and unused funds roll over each year, providing long-term financial benefits. If you're not, then HRA plans will be your best option to ensure you don't pay too much.

The Bottom Line

Avoiding these common pitfalls requires a proactive approach. Take the time to assess your needs, compare options, and ask questions if something isn’t clear. Open enrollment is your opportunity to secure the coverage that protects your health and financial well-being for the year ahead.

What steps are you taking to ensure you choose the right plan? Let’s discuss in the comments!