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Avoid Health Insurance Mistakes

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Having a health insurance policy doesn’t always provide the coverage that families or individuals need. Many people short change themselves and end up losing a lot of money because there are common mistakes to avoid when buying health insurance.

Individuals who buy health insurance directly online or through an exchange are more likely to make some of these mistakes. Consumers choosing a policy at work through open enrollment also make some of the mistakes.

Here’s a rundown of the most common insurance mistakes to help you avoid:

Need Health Insurance? Get Great Rates Fast and Easy. Having too High a Deductible – This is the biggest mistake that people make on health insurance. Many people think that they are saving money by having a $1,000 or $5,000 deductible. A high deductible can lower premiums but can lead to serious financial problems.

In today’s world it isn’t uncommon for routine medical procedures to cost $2,000 or $3,000. Many families end up using credit cards or dipping into savings to pay the extra expense health insurance doesn’t cover. They end up losing money, and might end up with high credit card bills and no savings.

The best strategy for the average person is to have a policy with a deductible that’s half your estimated needs. If you think you can live with a $1,000 deductible go with $500. You should do this because most people over estimate their ability to make money and underestimate their ability to save.

Not Understanding how PPOs and HMOs work

There are too basic kinds of health insurance plans offered in the U.S. today. They are a Preferred Provider Organization (PPO) and a Health Maintenance Organization (HMO). Basically a PPO will cover medical services provided by physicians or clinics that are in a network.

An HMO requires patients to go to certain physicians and pharmacies. Generally an HMO will assign you a “general practice physician” you will have to go to that doctor before it will pay for a specialist or additional tests. A PPO will usually let you go to a specialist on your own if you pay the copay.

If you have a PPO you will be given a list of physicians you can use, which is usually posted on the insurance company’s website. Make sure your physician is on the list before you buy the plan and make sure specialists are in network before going to them.

PPOs are the most common plans but there are some HMOs. HMOs limit the care you can get and often make it difficult to see a specialist. Not every doctor will be in everybody’s network. Read the plan and see if your doctor is on the list before paying for it.

Choosing the Wrong Prescription Plan

Not every pharmacy accepts every insurance plan. Last year Walgreen’s stopped accepting prescriptions covered by insurers using Express Scripts (a big company that processes prescriptions for insurance companies) for several months.

Generally the big national chains Walgreen, CVS Caremark, Wal-Mart, Target, Costco, Sam’s Club, Kroger’s, RiteAid, Target, etc. accept health insurance plans. Many privately owned pharmacies don’t take every plan. Yet that isn’t always the case. When shopping for insurance, ask your pharmacist if the plan is accepted. If not make sure there’s a pharmacy in your area that accepts the plan. Most big chain pharmacies accept most insurance. Many small pharmacies don’t.

Paying for health insurance that doesn’t meet your needs makes no sense, yet many people do just that. Avoiding these mistakes ensures that your family gets the coverage it needs.

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