Don’t Pick a Health Insurance Plan for 2025 Until You Read This
Right now, the news and social media are filled with stories about the upcoming election and extreme weather events. With all this happening, you may have missed an important update about health insurance.
Sounds boring? Not this time!
No matter what type of health insurance you currently have—or even if you don’t have any—this fall is a crucial time to pay attention. Open Enrollment is happening for Medicare, job-based insurance, and individual plans on Healthcare.gov, and the choices you make now will impact your healthcare costs throughout 2025.
Choosing the wrong plan could mean spending hundreds or even thousands of dollars more than necessary next year. On the other hand, making the right choice could lead to big savings. That’s why it’s important to take your time and carefully compare your options. The good news is that expert assistance is available to help you pick the best plan for your needs.
So, no, health insurance isn’t boring—it’s a major decision that affects your finances and well-being!
The Biggest Mistake People Make When Choosing Insurance
Dr. Mark Fendrick, a health costs expert and primary care physician at Michigan Medicine, warns that many people make a costly mistake every year: they simply renew their current plan without reviewing their options.
According to him, new rules and programs in 2025 could significantly impact healthcare costs for many people. That’s why taking the time to compare different plans is essential.
“It’s so easy to just click ‘renew’ on your current plan,” Dr. Fendrick says. “But a lot of Americans don’t actually pick the plan that best fits their medical needs and financial situation. There’s a lot of useful information out there—you just need to use it.”
A common mistake people make is focusing only on the monthly premium—the amount you pay every month to have health insurance. While a lower premium might seem like a good deal, it’s not the only cost to consider. Depending on your plan, you could face high out-of-pocket costs for doctor visits, prescriptions, and medical procedures.
“As Yogi Berra once said, ‘It’s hard to make predictions, especially about the future,’” Dr. Fendrick explains. “But looking at what healthcare services and medications you used last year can give you a good idea of what you might need next year.”
For some people, choosing a plan with a low monthly premium might seem like a money-saving move. However, if that plan has high deductibles, co-pays, or co-insurance, you could end up spending much more than if you had chosen a plan with a higher premium but lower out-of-pocket costs.
Get Help from Experts
Alena Hill, who leads a team of financial counselors at Michigan Medicine, says that her team helped over 2,300 people last year understand their health insurance options. Many of these people also discovered financial assistance programs that helped lower their total healthcare expenses.
“Open Enrollment is a critical time,” Hill explains. “Our trained counselors help people compare plans and find the best fit for their needs.”
Her biggest piece of advice? Check whether your preferred doctors, hospitals, and prescriptions are covered before choosing a plan.
“If you have a doctor you like, a hospital you prefer, or medications that work well for you, you need to make sure they’re included in your plan’s provider network and prescription coverage list before you make a final decision,” Hill says.
Most health systems have websites where you can check which insurance plans they accept. For example, Michigan Medicine and UM Health-Sparrow both provide updated lists of accepted insurance plans each year.
But be careful! Insurance companies often have multiple plans with similar names. Make sure you’re checking the exact plan name when reviewing provider networks and drug coverage.
If you do switch insurance plans for 2025, remember to update all your doctors and healthcare providers as soon as the new year begins. This ensures they bill the correct insurance and prevents unexpected charges. Many health providers allow you to update your insurance details through their online patient portals.
Important Insurance Terms You Should Know
To make the best decision, it’s important to understand some key insurance terms:
- Network: A list of doctors, hospitals, and healthcare providers that your insurance plan covers. Just because your doctor refers you to a specialist or a testing center doesn’t mean they’re in-network. Plans update their networks every year, so always double-check.
- Formulary: A list of prescription medications covered by your plan. Some plans require you to try cheaper alternatives before covering more expensive drugs. Others may need special approval before allowing certain prescriptions.
- Premium: The amount you pay each month to have health insurance. If you’re employed, your employer usually covers part of this cost.
- Co-pay: A fixed amount you pay for medical services or prescriptions. Some preventive care services, such as cancer screenings and vaccines, don’t require co-pays, but you must use an in-network provider.
- Co-insurance: A percentage of the total cost of a service or medication that you must pay. Plans with low monthly premiums often have higher co-insurance costs.
- Deductible: The amount you must pay for medical expenses before your insurance starts covering costs. Some plans have no deductible, while others have high deductibles, sometimes in the thousands of dollars. High-deductible plans allow you to set aside tax-free money in special Health Savings Accounts (HSAs).
- Health Maintenance Organization (HMO): A type of insurance plan with a limited network of doctors and hospitals. HMO plans usually have lower monthly premiums but require you to choose a primary care doctor and get referrals to see specialists. They generally do not cover out-of-network care unless it’s an emergency.
- Preferred Provider Organization (PPO): A plan that gives you access to a larger network of doctors and hospitals. You pay less when using in-network providers but can still see out-of-network providers at a higher cost. PPO plans usually have higher premiums.
- Exclusive Provider Organization (EPO): A plan that offers a network of doctors and hospitals, similar to an HMO, but with slightly more flexibility. EPOs usually cost less than PPOs but won’t cover out-of-network care except in emergencies.
Final Thoughts
Health insurance might not be the most exciting topic, but the decisions you make now will have a major impact on your healthcare and finances throughout 2025. Open Enrollment is your opportunity to review your options, compare costs, and find a plan that fits your needs.
Don’t just stick with your current plan without checking if there’s a better option. Take the time to research, use expert help if needed, and ensure that your doctors, hospitals, and prescriptions are covered under the plan you choose.
By making an informed decision, you can save money, avoid unexpected medical bills, and ensure you get the best possible care in 2025.
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