Health insurance is supposed to protect your finances—not hurt them. But every year, thousands of people make avoidable mistakes with their health insurance that lead to surprise medical bills, denied claims, and even financial hardship.
Whether you’re enrolling in a new plan, using existing coverage, or navigating the healthcare system for the first time, knowing what not to do can be just as valuable as knowing what to do.
In this article, we’ll cover five common health insurance mistakes that could cost you money—and show you how to avoid each one.
Mistake #1: Choosing the Wrong Plan for Your Needs
Why It Happens:
Many people choose a plan based solely on the monthly premium—the amount you pay every month—without considering the full cost of care.
Why It’s Costly:
A low-premium plan may have high deductibles, copays, and out-of-pocket limits, which can be expensive if you need regular medical care or prescriptions.
How to Avoid It:
Look beyond the premium. Compare:
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Deductible (what you pay before insurance kicks in)
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Co-insurance and copays
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Out-of-pocket maximum
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Coverage for your specific medications or conditions
Choose a plan that balances monthly costs with realistic healthcare usage.
Mistake #2: Not Checking the Provider Network
Why It Happens:
It’s easy to assume your current doctor or local hospital accepts your new insurance plan.
Why It’s Costly:
Using out-of-network providers can result in denied claims or much higher charges. In some cases, your insurance might not pay anything at all.
How to Avoid It:
Before enrolling, confirm:
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Your primary care doctor is in-network
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Specialists and hospitals you prefer are covered
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Emergency and urgent care locations are accessible
Most insurance companies offer online directories for quick searches.
Mistake #3: Skipping Preventive Care
Why It Happens:
Some people don’t realize that preventive care (like screenings, vaccines, and annual checkups) is included at no cost under most plans.
Why It’s Costly:
Skipping preventive care can allow small health issues to become expensive, serious problems later. You also miss the chance to catch conditions early—when they’re easiest and cheapest to treat.
How to Avoid It:
Schedule your annual checkup, flu shot, and screenings (like cholesterol tests or mammograms). These services are usually 100% covered, even before you meet your deductible.
Mistake #4: Not Understanding What’s Covered
Why It Happens:
Insurance documents are long and full of confusing terms. Many people skip reading the fine print.
Why It’s Costly:
Misunderstanding your coverage can lead to surprise bills for services you assumed were covered—like mental health, maternity care, or prescriptions.
How to Avoid It:
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Read the Summary of Benefits and Coverage (SBC) when selecting a plan
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Call your insurer before receiving care you’re unsure about
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Ask for pre-authorization if required by your policy
Being informed can save you hundreds—or even thousands—of dollars.
Mistake #5: Missing Open Enrollment or Life Event Deadlines
Why It Happens:
Life gets busy, and open enrollment periods are short. Some assume they can enroll anytime.
Why It’s Costly:
Miss the deadline, and you may be stuck without insurance—or forced to pay higher out-of-pocket costs if you don’t qualify for a Special Enrollment Period (SEP).
How to Avoid It:
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Mark open enrollment dates on your calendar
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Act quickly after major life events (marriage, birth, job change) to qualify for SEP
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Sign up for reminders from the Health Insurance Marketplace or your employer
Planning ahead ensures you’re never without coverage when you need it most.
Conclusion: Smart Coverage Means Smart Decisions
Health insurance is a powerful financial tool—but only when used correctly. The mistakes above are common, but with a little attention and research, you can avoid them and protect your health and your wallet.
To recap, avoid these 5 costly errors:
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Choosing the wrong plan
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Ignoring provider networks
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Skipping preventive care
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Not reading your policy
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Missing enrollment deadlines
Being proactive, asking questions, and staying informed can help you make the most of your coverage and avoid unnecessary financial pain in 2025 and beyond.