Top 7 Mistakes to Avoid When Buying Health Insurance

Choosing the wrong health insurance can cost you thousands of dollars and leave you without coverage when you need it most. These are 7 costly mistakes to watch for when buying health insurance, and how to avoid them.

Mistake #1: Choosing the Lowest Premium Without Checking Total Cost

This is one of the easiest mistakes to make, and it can be expensive.

Why This Happens

Lower premium plans often have higher deductibles, and some also have higher copays or coinsurance. Compare each plan's actual numbers in its Summary of Benefits.

How to Avoid It

Mistake #2: Ignoring Network Restrictions

Your insurance is worthless if none of your doctors accept it.

What to Check

• ✅ Your primary care physician
• ✅ Any specialists you see regularly
• ✅ Your preferred hospital
• ✅ Your kids' pediatrician
• ✅ Mental health providers (if applicable)

How to Check

1. Get the plan's provider directory (online)
2. Call your doctor's office to confirm they accept it
3. Check if they're "in-network" or just "accepted"

Pro Tip: Networks change yearly. Even if your doctor was in-network last year, verify they still are.

Mistake #3: Not Understanding Deductibles

Many people don't realize they have to pay the FULL deductible before insurance covers most care.

Common Misconception

What IS Covered Before Deductible

• ✅ Preventive care (annual check-ups, vaccines)
• ✅ Some primary care visits (plan dependent)

What Often Applies to the Deductible First (Varies by Plan)

• ❌ Surgeries
• ❌ MRI/CT scans
• ❌ Hospital stays
• ❌ Specialist visits (on some plans)

Mistake #4: Missing Open Enrollment Deadlines

Miss the deadline and you can generally enroll later only with a Special Enrollment Period (HealthCare.gov).

Key Dates for 2027 Coverage on HealthCare.gov

Special Enrollment (You May Qualify After a Life Event)

• Lost job-based coverage
• Got married, or lost coverage through a divorce
• Had a baby or adopted
• Moved to a new state

Mistake #5: Not Checking Prescription Drug Coverage

What you pay for the same medication can differ a lot from plan to plan.

What to Check

1. 1. Is your medication on the formulary?
   Each plan has a list of covered drugs
2. 2. What tier is it?
   • Tier 1: often generics
   • Tier 2: often preferred brand drugs
   • Tier 3: often non-preferred brand drugs
   • Tier 4: often specialty drugs

   Tiers and costs differ by plan, so check each one.

3. 3. Are there restrictions?
   Prior authorization, quantity limits, step therapy

Mistake #6: Ignoring Out-of-Pocket Maximum

The out-of-pocket maximum is your safety net against catastrophic costs – yet many people don't even look at it.

What Is It?

The most you'll pay in a year for covered in-network services. After you hit this limit, the plan pays 100% of covered in-network costs for the rest of the year.

Important: Federal law caps the out-of-pocket maximum at $10,600 for an individual and $21,200 for a family in 2026, and at $12,000 and $24,000 in 2027 (HealthCare.gov). Many plans set a lower limit, and cost-sharing reductions can lower it further for eligible Silver plan enrollees. Check the limit on every plan you compare.

Mistake #7: Auto-Renewing Without Shopping Around

Your current plan's price probably went up. New plans might be cheaper AND better.

Why Plans Change

• Premiums change from year to year (see our guide to proposed 2027 increases)
• Networks get smaller (doctors drop out)
• Coverage benefits change
• New plans become available
• Your subsidy amount changes

What to Do Every Open Enrollment

1. Check your current plan's new price
2. Compare with at least 3 other plans
3. Verify your doctors are still in-network
4. Recalculate your subsidy (income changes?)
5. Look for new plan options

Bonus Mistakes (Avoid These Too)

8. Not Using Preventive Care

Many preventive services are covered at no cost when you use in-network providers, including vaccines and many screenings. Coverage can vary, so confirm with your plan (HealthCare.gov).

9. Going Out-of-Network "Just Once"

Out-of-network care can cost much more, and HMO and EPO plans generally do not cover it outside of emergencies. Check first when you can.

10. Forgetting to Add Life Events

Had a baby? Got married? You have 60 days to update your plan or add dependents.

Your Action Plan to Avoid These Mistakes

Don't Make These Mistakes: Compare Total Costs

Avoid costly mistakes by comparing plans on total yearly cost, not just the monthly premium. Then confirm doctors and medications with each insurer's directory and formulary.

Sources

• HealthCare.gov: Out-of-pocket maximum/limit
• HealthCare.gov: Dates and deadlines
• HealthCare.gov: Special Enrollment Period
• HealthCare.gov: Preventive care benefits
• HealthCare.gov: Health insurance plan types