Health insurance. You have it. You pay for it. You count on it to be there when you need it. But if you are like many Americans, you don’t really understand it, how it works, and why it fails you when you need it the most. Here are some of the top myths that make navigating and truly benefitting from your health insurance so difficult, as well as the truth behind them.
Myth #1: Health Insurance Covers Everything
Sorry to burst your bubble, but no plan will cover all your health care costs. The key to avoiding surprise bills and high costs is understanding what’s included (and not included) in the plan. Most health insurance plans cover essential medical expenses, like doctor visits, hospital stays, and prescription medications.
However, when your needs extend outside that box, you may run into exclusions and limitations. These are big words for the doctors, procedures, and treatment alternatives your insurance company doesn’t cover. For example, many plans don’t cover elective procedures—the ones you choose to have that your insurance company deems aren’t necessary.
Health insurance is a valuable safety net, but if misunderstood, it can cause more pain than it cures. Review your policy details. Ask questions about what’s included—and what’s not. Your insurance provider, HR representative, or benefits broker can help translate all the complicated terms and conditions so you know how to get the most out of your insurance coverage.
Myth #2: The Most Affordable Plan Is Always the One with the Lowest Premiums
Plan prices can be deceiving. Just because the price tag on a carton of ice cream is lower doesn’t mean it’s a better deal than the one next to it. It is important to know what you are getting for your money. If the outcome of your purchase is different (e.g., you get less ice cream), then the lower price didn’t really save you anything.
Many individuals and businesses make the mistake of choosing health insurance based solely on cost. The plan that costs less per paycheck leaves more money in your pocket, right? In many cases, no. A plan with lower premiums often has higher out-of-pocket costs. Perhaps the deductible is higher. Or maybe the copays are higher. Remember, the insurance company is a business too, and making money is part of their business model.
The best way to decide which health plan will be most cost-effective is to review past usage and compare coverage for these most commonly used benefits. A low premium plan could be a great option, but it could also leave you footing the bill.
Myth #3: Health Insurance Covers Dental and Vision Expenses
It’s easy to assume health insurance covers the whole body from head to toe—literally—but it doesn’t. The eyes and mouth are two important parts of the body that health insurance doesn’t cover. Say you visit the dentist for a routine cleaning or have an eye exam; you’d be stuck paying out of pocket without dental and vision insurance.
Note: Health insurance can help out with some unique expenses. For example, some health plans cover pediatric dental and vision as part of the Affordable Care Act’s essential health benefits. And medical insurance might cover dental or vision services if they’re related to a larger medical issue (like surgery for an eye injury). Check your plan for details.
Myth #4: You Can Only Enroll During Open Enrollment
Sort of. For nearly all employees, open enrollment is your one chance each year to get health insurance—miss it, and you’re locked out. What if you are in an accident in February? Too bad. Or get diagnosed with something serious in April? Good luck paying for it out of pocket.
Who gets an exception? The “lucky” few. The Affordable Care Act (ACA) specifies that events such as marriage, the birth or adoption of a child, or loss of previous coverage can trigger a special enrollment period during which employees can change their health plan.
Unless you are planning ahead with the help of a crystal ball, it’s best to dig into plan options and enroll during the open enrollment period. Make sure you are covered.
Myth #5: Only Older Individuals With Health Conditions Need Health Insurance
Are you thinking about opting out of health insurance to boost your paycheck? What would that amount to? Hundreds more each month in your pocket? After all, you’re young and healthy. How much insurance do you really need?
Not much until you get t-boned by a drunk driver and end up confined to a hospital bed with a broken hip. The cost of your hospital stay, treatment, surgeries, physical therapy, and medications will quickly exceed any savings on insurance premiums. Skipping or even skimping out on insurance is not a smart financial play, regardless of your age.
For the young and healthy, who still feel indestructible? It is a safety net. It protects against unforeseen accidents, injuries, and illnesses.
Myth #6: Health Insurance Plans Are All the Same
Nothing could be further from the truth. Health insurance benefits for employees vary widely depending on the provider, type of plan, and even where you live. The coverage you need most might not even be in the plan you are considering. While the Affordable Care Act sets some standards for health insurance nationwide, many rules and regulations vary by state. Be sure to compare plans and understand the options before making a choice.
Myth #7: Pre-existing Conditions Aren’t Covered
Throwing in the towel on insurance because you have a pre-diagnosed condition is a mistake. Yes, in the past, insurance companies could deny coverage for treatment if a condition pre-existed. But under the Affordable Care Act, that is no longer the case. If you have a chronic or pre-existing medical condition, insurance companies must cover treatments according to the coverage described in their plan.
Caution: Short-term or limited-benefit plans, which aren’t ACA-compliant, might not offer this protection. You must choose a compliant plan to guarantee these protections.
Bringing Back Benefits
Misunderstandings about health insurance can lead to decisions that affect satisfaction and financial outcomes. Now that you understand the truth about health insurance, you can make informed choices that better serve your business and employees. You can help make sure health insurance in your employee benefits package provides the real, tangible benefits it should.
Infographic
Health insurance is something you pay for and rely on, but many Americans don’t fully understand how it works or why it can fail when needed most. This infographic clarifies common myths about health insurance and reveals the truths to help you make better use of your coverage.
