6 Mistakes People Make When Shopping for Health Insurance

Choosing health insurance means calculating on lots of fronts, like the type of network of your policy, the metal tier, the insurance company, and whatnot. No doubts it is not as easy as going to a supermarket for groceries. And bad health insurance has its own problems. You will not get quality medical care, and the worst part is you may drain your savings. But, as long as you do not commit these six mistakes people make when shopping for health insurance. You can be reasonably sure that you are on the right track.

6 Mistakes People Make When Shopping For Health Insurance

#1: Forgetting the comparison shopping method

Comparison shopping is the way to go whenever you shop for something crucial. And we guess health insurance is on the list of those essential items.

As we mentioned earlier, there are many variables, the type of network, the premium, the metal tier, etc. Compare the plans on popular insurance buying websites or ask your agent, but do thorough research of insurance products.

As the insurance product you choose can make or break your year. Either you will get all the medical care comfortably, or you will end up draining your savings.

#2: Not doing the premium maths right

Health insurance is complicated stuff. A low premium does not always mean more savings. Lower premiums usually have a high deductible, copays, coinsurance, and out-of-pocket limit. Let’s directly see this through an example:

Situation 1: The premium is $750, the deductible is equal to $1000, and Copays are $10 for doctor visits and prescriptions.

Situation 2:  The premium is $450, the deductible is $7250, and Copays are $20 for doctor visits and prescriptions.

In the first situation, the annual premium amounts to $9000. You will fulfil the out-of-pocket expenses within two months. After that, you just have to pay $20 per month for the next ten months and enjoy unlimited medical care. The total amount spent comes down to be $10200.

While in the second situation, the annual premium amounts to $5400. And with a $500 expenditure monthly, you will never fulfil the out-of-pocket expenses. Thus you will pay $6000 out of your pocket. Hence, the total spending equals $5400 + $6000, which is $11400—Way higher than the first scenario.

In the first situation, the premium is way higher than the second situation. But still, the high deductible flips the game. Thus, do proper maths before entering into any contract.

#3: Not choosing the right network type

Often we save lots or end up paying fortunes just because we did not choose the right network. Many networks either do not support out-of-network doctors or have very high out-of-pocket limits.

So, if you choose a policy that does not cover the doctor of your choice, you may be entering an expensive deal. You can check whether your chosen doctor is on the list of in-network physicians through a few methods. First is through the provider networks list made available online by insurers. But, the catch here is many times, these lists are not up to date. So, do call your physician’s office and ask if they are a part of the insurer’s network.

If you do not have a particular physician, ensure that the insurer’s network is vast enough. Also, make sure that some hospital within your reach is on the insurer’s network list.

#4: Not assessing your and your family’s insurance needs correctly

Insurance needs differ from member to member of your family. What is right for one may not be suitable for another. Thus, study the requirements of each person, and choose a proper plan.

Also, the needs of your family members keep changing with time. Maybe someone is diagnosed with cancer. Then it would be best if you upgraded to a higher premium plan. This change will ensure you get proper coverage. Again, you need to adapt if someone dies or a child is born. Your insurance plan should always be up to date and ready to tackle any problem.

When open enrolment rolls in, study your medical needs pattern and judge how much insurance you need. See if you have been a constant visitor to the doctors or hardly seen a doctor in the year and opt accordingly.

#5: Not checking for government subsidies

Do you know you can avail of government subsidies even if your income is 400% of the federal poverty line? These government subsidies let you save some bucks on the insurance premiums and much more. But the catch here is, you have to purchase your policy from the Obamacare exchange to avail these subsidies.

If you miss going through or your state’s exchange, then you may not be able to get these subsidies. Thus, always try out the before you buy insurance from any other source. If you are eligible, rest assured, you will get a great deal.

#6: Not knowing key terms

When you do not understand the insurance jargon like premiums, coinsurance costs, copay costs, out-of-pocket limit, etc., you cannot analyze the policy. Thus, it is imperative to understand this basic terminology.

Dig out how much an out-of-network doctor visit will cost. Ask the agent whether you will need a referral to see a specialist. How will the division of costs be split between you and the insurance company?


In a nutshell, you must understand the policy and double-check the facts before you sign the contract. Look into the details of how much maximum you will pay in a year. Do the maths right, and don’t forget to check for government subsidies. These small steps can make a vast difference in the quality of the coverage you will get.

So, this was all about the six mistakes people make when shopping for health insurance. We hope the article was informative and useful. If you have any doubt about the info provided, please drop them in the comments section below. We reply ASAP!

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