No one wants to make costly mistakes when it comes to their health insurance coverage or their medical care. Here are some common mistakes that people make, and how to avoid them.
#1 Mistake: Missing your enrollment opportunity – There’s a nationwide open enrollment period when anyone can sign up for health insurance, but it only comes once per year and it ended December 15, 2017 in most states. If you need coverage in 2018, your only chance now may be to enroll after you’ve had a qualifying life event like marriage or divorce, the birth or adoption of a child, loss of employer-based coverage, moving to a new city or state, or major changes in your income. Qualifying life events like this give you a 60-day window to enroll. Don’t miss it.
#2 Mistake: Overestimating your income and having to pay back subsidies – There are government subsidies available to make health insurance more affordable for qualifying people (e.g. individuals earning up to about $48,000 per year or families of four earning up to about $98,000). When applying for subsidies you need to estimate what your income will be for the current year. It may be tempting to under-estimate as a strategy to get more subsidy dollars – but beware that your subsidies and actual earnings will be reconciled when you file your federal taxes. If you got more subsidy help than you really qualified for, you will typically have to pay it back on your tax return.
#3 Mistake: Thinking there’s no tax penalty anymore – You can be forgiven for imagining there’s no tax penalty for going uninsured anymore. That’s how a lot of the news reports described the situation after President Trump signed the recent tax reform bill. But the truth is that the tax penalty is still in place for the 2018 calendar year. It’s not rescinded until 2019.
#4 Mistake: Going uninsured in 2018 because you missed open enrollment – Did you know that you still have coverage options even if you missed open enrollment and haven’t had a qualifying life event? Medical insurance products available year-round include things like short-term health insurance, medical indemnity insurance, and packaged insurance products. These don’t meet the benefit standards of the Obamacare law and it’s possible to be declined (in some cases) based on your medical history. But it’s better to have some coverage than none at all.
#5 Mistake: Not asking if your doctor is in network – This can be a big deal. Most health insurance companies use doctor networks and structure your insurance benefits so that you have less coverage (or none at all, in some cases) when you see someone outside of the network. When you make an appointment with a new doctor, always ask to make sure they’re in your network. Networks change regularly, and even plans from the same insurer can have different networks, so confirm their network status with your insurer when possible.
#6 Mistake: Getting taken to the wrong hospital – If you’re having a medical emergency and need to be transported to the hospital, you can’t always control where the ambulance company takes you. However, if you’re in a position to do so, tell them your local network hospital so that you’re not taken to an out-of-network facility where your health insurance coverage may be limited.
#7 Mistake: Paying your medical bills too soon – After you get medical care you’ll begin seeing bills in the mail. There may be a bill from the doctor and a separate bill from the lab. Make sure the bills have been forwarded to your insurance company and don’t pay anything until you get the official “Explanation of Benefits (or “EOB”) from your insurance company. This will show how much of each bill was covered and any discounts applied. It was also tell you what your out-of-pocket responsibility is for the bill. You’ll typically then receive an updated bill from your medical care providers. Make sure everything matches up before you pay it, and contact your insurer and the doctor’s billing office if you have any questions.
#8 Mistake: Not getting pre-approval when needed – Some medical procedures and some prescription drugs may require you to apply for pre-approval before your insurance company will pay for them. If you’re worried that something your doctor recommends may not be covered, call your insurer to see if pre-approval may be needed. The pre-approval process usually involves getting a letter sent from your doctor with any medical notes or test results that back up his or her recommendation. The insurance company will make sure the treatment is appropriate for the condition and medically necessary. A coverage determination is usually made within two weeks.
Last but not least, the #9 Mistake: Missing out on tax benefits because you didn’t open an HSA – A lot of people have high-deductible health insurance plans that can be used with Health Savings Accounts (HSAs), but few people use them to their full potential. Did you know that you can save money on a tax-deductible basis for a broad range of qualifying medical expenses in an HSA? You can use those funds (up to $3,450 for an individual or $6,900 for a family in 2018) to pay for copays and deductibles, and the money can roll over and grow from year to year.