Using Health Insurance in the New Year

Now that we have settled into the New Year, I want you to think about health insurance. If you purchased your insurance from the MarketPlace, your plan year likely began on January 1, 2022. If you have private insurance through the workplace, check with your plan as it may start January 1.

This is important because it resets the clock for your annual deductible and out-of-pocket maximum. The deductible is the amount you owe for services your health insurance plan covers before your health insurance plan begins to pay. The out-of-pocket maximum is the amount you pay during a policy period before your health insurance plan pays 100% for covered services. Deductibles vary by plan and can be a few hundred dollars to thousands of dollars. The out-of-pocket maximum will also vary by plan.

Now that you have health insurance and are paying the premium, you should get the maximum benefit of your plan. Another way to look at it is that you paid for it, you should use it. Just by having health insurance you qualify for free preventive services. A list of preventive health services is available on the Healthcare.gov website.

Once you start using your health insurance you will have co-payments (a fixed amount often found on your insurance card). This is like the $20 (may vary depending on your plan) charge when you visit the health care provider. You may also be responsible for coinsurance (your share of costs calculated as a percentage) depending on the type of service rendered. For example, your plan may indicate you pay 20% and the insurance company pays 80%. Remember that your costs stop at the out-of-pocket maximum.

So let’s go back to the main point, now that you have insurance start using it.

Take full advantage of the health insurance plan and in doing so, it may save you money. Health insurance costs are often something we overlook in our financial planning. The Health Insurance Literacy Team developed a worksheet to help you understand and estimate health care expenses. On our website, you can find information on how to choose a doctor, flexible spending accounts, our workbook, and much more.

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