Common Mistakes to Avoid When Buying Health Insurance

Health insurance is an important tool that helps protect you from high medical costs. However, buying health insurance can be confusing, and many people make mistakes that can end up costing them more money or leaving them without the coverage they need. This guide will explain some common mistakes to avoid when buying health insurance, all in simple terms that even a fifth grader can understand.

Mistake 1: Not Understanding Your Coverage Needs

One of the biggest mistakes people make is not understanding their coverage needs. Health insurance plans offer different levels of coverage, and it’s important to choose one that fits your health needs and budget.

How to Avoid It:

  • Assess Your Health Needs: Consider your current health, any ongoing treatments, and the type of care you might need in the future.
  • Think About Your Budget: Determine how much you can afford to pay for premiums, deductibles, and out-of-pocket costs.

Example: If you have a chronic condition like diabetes, you might need a plan that covers regular doctor visits and medications.

Mistake 2: Choosing the Cheapest Plan

While it’s tempting to choose the cheapest plan available, this can be a mistake. The cheapest plan might have higher deductibles, limited coverage, or fewer benefits, which can end up costing you more in the long run.

How to Avoid It:

  • Compare Plans: Look at different plans and compare their benefits, premiums, deductibles, and out-of-pocket costs.
  • Consider the Coverage: Make sure the plan covers the services you need and has a network of doctors and hospitals that you trust.

Example: A cheap plan might have a low premium but a high deductible, meaning you pay more out of pocket before the insurance starts to help.

Mistake 3: Not Checking the Provider Network

Health insurance plans have networks of doctors and hospitals that they work with. If you choose a plan that does not include your preferred providers, you might have to pay more to see them.

How to Avoid It:

  • Check the Network: Make sure your preferred doctors, specialists, and hospitals are in the plan’s network.
  • Consider Your Options: If your preferred providers are not in the network, consider whether you are willing to switch doctors or pay more to see them.

Example: If you have a favorite doctor that you want to keep seeing, make sure they are included in the plan’s network.

Mistake 4: Ignoring the Deductibles and Out-of-Pocket Costs

Focusing only on the monthly premium and ignoring the deductibles and out-of-pocket costs can be a costly mistake. The deductible is the amount you pay out of pocket before your insurance starts to pay, and out-of-pocket costs are the expenses you pay for covered services.

How to Avoid It:

  • Understand the Deductible: Make sure you know how much the deductible is and whether you can afford to pay it.
  • Consider Out-of-Pocket Costs: Look at the plan’s out-of-pocket maximum, which is the most you will have to pay for covered services in a year.

Example: A plan with a low premium but a high deductible might end up costing you more if you need frequent medical care.

Mistake 5: Overlooking Prescription Drug Coverage

Not all health insurance plans cover prescription drugs, and those that do might have different levels of coverage for different medications.

How to Avoid It:

  • Check the Formulary: The formulary is the list of medications covered by the plan. Make sure your medications are on the list.
  • Compare Costs: Look at the copayments or coinsurance for your medications and consider how much you will need to pay out of pocket.

Example: If you take a medication that is not covered by the plan, you might have to pay the full cost yourself.

Mistake 6: Not Considering Your Family’s Needs

If you are buying health insurance for your family, it’s important to consider the needs of each family member. Different family members might have different health needs, and it’s important to choose a plan that provides adequate coverage for everyone.

How to Avoid It:

  • Assess Each Family Member’s Needs: Consider the health needs of each family member, including any ongoing treatments or medications.
  • Choose a Plan with Family Coverage: Look for a plan that offers coverage for all family members and includes the services they need.

Example: If you have children, you might need a plan that covers pediatric care and vaccinations.

Mistake 7: Not Reading the Fine Print

Insurance policies can be complex, and it’s important to read the fine print to understand what is covered and what is not. Not reading the fine print can lead to surprises when you need to use your insurance.

How to Avoid It:

  • Read the Policy Documents: Take the time to read the policy documents and understand the terms and conditions.
  • Ask Questions: If you are unsure about any part of the policy, ask the insurance company for clarification.

Example: Some plans might have exclusions for certain treatments or conditions, and it’s important to know this before you need care.

Mistake 8: Not Taking Advantage of Preventive Care

Many health insurance plans offer free or low-cost preventive care services, such as vaccinations, screenings, and wellness visits. Not taking advantage of these services can lead to health problems that could have been prevented.

How to Avoid It:

  • Use Preventive Services: Take advantage of the preventive services covered by your plan to stay healthy and catch any potential health issues early.
  • Schedule Regular Check-Ups: Make regular appointments with your doctor for check-ups and screenings.

Example: Getting a flu shot or a routine screening can help you stay healthy and avoid more serious health problems later.

Mistake 9: Not Considering Your Future Needs

When choosing a health insurance plan, it’s important to think about your future health needs as well as your current needs. Your health needs might change over time, and it’s important to choose a plan that can adapt to these changes.

How to Avoid It:

  • Think About the Future: Consider any potential health issues you might face in the future and choose a plan that provides adequate coverage.
  • Plan for Changes: Be prepared to review and change your health insurance plan if your needs change.

Example: If you are planning to start a family, you might need a plan that covers maternity care and pediatric services.

Mistake 10: Not Reviewing Your Plan Annually

Health insurance plans and your health needs can change from year to year. Not reviewing your plan annually can result in you missing out on better coverage or paying more than necessary.

How to Avoid It:

  • Review Your Plan Annually: Take the time to review your health insurance plan each year to make sure it still meets your needs.
  • Compare Options: Look at other available plans to see if there are better options for your current situation.

Example: If your health needs have changed or if there are new plans available, you might find a plan that offers better coverage at a lower cost.


Buying health insurance can be a complex process, but avoiding these common mistakes can help you make a more informed decision. By understanding your coverage needs, comparing plans, checking provider networks, and considering your family’s needs, you can choose a plan that provides the protection and benefits you need. Remember to review your plan annually and take advantage of preventive care services to stay healthy. With the right health insurance plan, you can have peace of mind knowing that you are protected against high medical costs.

Leave a Reply

Your email address will not be published. Required fields are marked *