Shopping for health insurance and selecting the plan that’s likely to best meet your needs is no simple task. But neither is using health insurance once you have it. Insurance terms and health plan rules often lead to confusion, and unfortunately, to costly mistakes.
Here are five common health insurance mistakes to avoid.
1) You assume you’re covered. It’s common for people to assume that once they have insurance, they can simply go for care. But all health plans have limits on the services they offer. Before you make an appointment with your doctor, be sure the care you need is covered by your plan. Also make sure you understand how much of its cost will be paid by insurance. To check your coverage, you can either read your policy or contact your insurer.
2) You don’t check your plan’s medication list. If you take medication, check your health plan’s list of drugs (also called a formulary) to determine if it is covered. If it’s not, ask your doctor if there is a reasonable alternative.
3) You assume your doctor is in-network. Many of the new health plans include far fewer doctors and hospitals than they did before the Affordable Care Act. It’s been difficult in some cases to clearly tell who is and who isn’t participating. Even doctors have been unclear about which plans they’re working with. Check with both your insurer and your health care providers to confirm their in-network status before going for care. Seeing a doctor who is outside your plan’s network can be very costly.
4) You don’t know your insurance terms. Studies have shown that a very small number of people are able to accurately define basic health insurance terms. Not understanding these terms will make it difficult to figure out how much your medical care is likely to cost. Here are four of the most common terms:
- Co-pays are fixed fees paid at the time of service for a medical visit or prescription drugs, such as each time you see your doctor.
- Deductible is the amount you’ll have to pay for services your health plan covers before you get any help covering your bills. If your deductible is ,000, you won’t get any financial help from your plan until you’ve met your ,000 deductible. Deductibles won’t necessarily apply to all services.
- Co-insurance is a percentage of the cost of your care you’ll need to pay, generally after meeting your health plan’s deductible. For example, if you’re responsible for 30% co-insurance for a medication that costs 0, you will pay for that drug.
This glossary of health insurance terms provides a comprehensive list of common terms you’re like to come across when using your policy.
5) You pay your bill too soon. After a doctor’s visit, you’ll receive what’s called an explanation of benefits, or EOB. It shows the service you got, how much your doctor charged, and what portion of the bill your insurer paid. If you’ve received a bill from your doctor, hold off on paying that bill until you receive your EOB and can confirm that your insurer paid its portion.
What mistakes have you made when using your benefits? Share your experience in the comments section below.