The cost of health insurance is a major concern for the majority of Americans, according to a recent Gallup poll. Health care costs are a complex issue. Many factors contribute to the costs of care and insurance: the price of goods and services, prescription drug pricing, administrative overhead and more. While these factors are beyond your control, your own misconceptions could also be raising your insurance rates.
Don’t let false information lead you to overpay for insurance. Here are three health myths that can lead to higher insurance rates.
Myth 1: You only need to choose insurance once
Whether you’re choosing an insurance plan through your employer or shopping for a policy on your own, choosing insurance isn’t a decision you only make once. Finding the right insurance policy for you depends on a wide range of personal factors, including your care needs, family size and how often you see a doctor. You also need a policy you can afford, both when it comes to the monthly premium and other costs like copays and deductibles.
When your personal situation changes - such as when you get married or divorced or start a family - your existing policy may become inadequate to meet your needs or more expensive than necessary. Also, annual health insurance premiums tend to increase over time, so your plan may eventually grow beyond what you’re willing to pay.
Be prepared to re-shop your existing insurance policies regularly, either by reviewing your employer’s options during open enrollment or comparing plans on your own (though you can get help from Policygenius). When comparing costs, pay attention to the premiums, copays, coinsurance and deductibles to find a cost-effective plan.
Myth 2: You should stick with your employer’s plan
There is no legal mandate to sign up for health insurance through your employer. You can choose to shop for a policy on your own instead, though your employer’s policy will most likely be the cheapest.
You should review your options during open enrollment. Take the time to determine if you can lower your insurance costs.
Also, if you have the ability to get on a spouse’s or parent’s insurance policy, you should take a look at that option. Insurance costs vary between employers and providers. There may be a cost savings for a similar level of coverage in some cases.
Myth 3: Choosing a plan with a lower deductible is always the best option
In health insurance, a deductible is the amount of money you have to pay out of pocket for medical services before your health insurance contributes (with most policies, there will still be copays or coinsurance to cover before you hit your out-of-pocket maximum). To avoid high out-of-pocket costs, you can choose a plan with lower deductibles. This is a good strategy for families and individuals who go to the doctor a lot. However, these policies generally have higher premiums.
Lower-deductible plans aren’t necessary when you don’t visit the doctor a lot. While you will owe more for your infrequent doctor visits, you’ll pay a lower premium. This is a good choice for someone who’s young, relatively healthy and who rarely receives medical care. Just remember that you may need to update your policy if your circumstances change.
Further reading: Learn how to make a high-deductible plan work for you.
Image: Carles Rodrigo Monzo