1. Assuming because you’re healthy you don’t need health insurance
If you get sick and then decide to buy health insurance from plans made available as part of the Affordable Care Act, you might not be able to, at least not right away. You'll only be allowed to purchase individual health insurance during the initial open enrollment period—Nov. 15, 2014, through February 15, 2015. The best place to buy is your state's Health Insurance Marketplace, a new kind of virtual insurance agency where you can compare plans and possibly qualify for income-based subsidies. So if you decide to thumb your nose at the deadline and are hit by a bus, you'll have to wait nine full months to get health insurance. And needless to say, it won't retroactively pay for care you received when you didn't have it. Don't count on free emergency care, either. Although an emergency room will take care of you if you require urgent attention, even if you don't have insurance, it will send you a bill afterward—most likely a very large one, and might make aggressive efforts to collect payment. In certain circumstances, you'll be allowed to purchase individual insurance outside the open enrollment period. Losing insurance because of a change in employment, or moving away from your health plan's service area, are examples of such "qualifying events." But suddenly needing expensive health care because you are sick is not.
2. Picking a plan based solely on low premiums
There is no free lunch in health insurance, but there is a menu of payment options to choose from. You can pay for your care up front, in the form of a higher premium, or later, in the form of a higher co-payment, a bigger deductible, or both. Neither form of payment is inherently better; it depends on your personal situation and preferences.
For instance, if you're in generally good health and have an adequate financial cushion, you might save money with a lower insurance premium and higher cost-sharing. But if you have ongoing medical needs, you might do better with a higher premium and lower cost-sharing. Of course, you take a risk if you pick a plan with a very high deductible and co-pay and then can't afford your share of expenses if you do happen to get sick.
You are legally entitled to receive a Summary of Benefits and Coverage [PDF] outlining your choices. If you don't have one, ask your company's insurer or benefits manager for a copy.
3. Carelessly going out of network
One of the big selling points of a preferred provider organization (PPO) over a health maintenance organization (HMO) is that if you have a PPO, you can opt to get your care from doctors or hospitals that don't participate in the plan's network, whereas with HMO's you can't. But the fine print can cost you if you're not careful. For instance, if your PPO says it will pay 60 percent of the cost of out-of-network care (compared with, say, 80 percent for in-network care), it will pay 60 percent of whatever it determines is a "reasonable" price for the service—not 60 percent of whatever the doctor decides to charge. So if his fee is $2,000 and your insurance company decides that the fair price is $1,000, it will reimburse you only $600, leaving you on the hook for the other $1,400.
The way around that is to avoid going out of network except when you absolutely can't find an in-network provider. The only time that won't work is when you receive non-network care involuntarily, such as during a trip to an emergency room of an in-network hospital where the doctor taking care of you isn't in the network, or when you have surgery and the anesthesiologist doesn't participate in your plan.
Strictly speaking, you have no legal recourse but to pay those bills. Yet in practice, polite but persistent complaints to the provider or your insurer can often succeed in reducing the price.
4. Not taking advantage of flexible-spending accounts
A flexible-spending account lets you set aside money tax-free from your paycheck to pay for medical expenses not covered by insurance, such as deductibles and co-payments, as well as dental care, eyeglasses and contact lenses, and some alternative treatments. Contributing to an FSA will also reduce your taxes. Say you have a taxable income of $75,000 a year and taxes claim 20 percent, or $15,000. If you put aside $2,500 in an FSA, your taxable income will be reduced to $72,500 and your taxes will be cut by $500, from $15,000 to $14,500. The higher your tax bracket, the greater the benefit.
Those advantages remain despite two changes in FSA's due to the health-reform law. You can no longer use money in your FSA to pay for over-the-counter drugs unless you get a prescription for them from your doctor. And the maximum amount you can set aside is capped each year. Previously, employers set the cap, typically up to $5,000. Keep in mind that FSA funds don't carry over year to year, so you must use the total amount you set aside or lose it.
5. Failing to use your insurer’s preferred pharmacy or mail-order service
Some commercial and Medicare Part D plans have negotiated deep discounts with specific mail-order and retail pharmacies. For example, recently people with Humana's Walmart-Preferred Rx Plan could get prescriptions for select generic high-blood-pressure drugs for only a penny at more than 4,000 preferred pharmacies, including Neighborhood Market, Sam's Club, Walmart, and Walmart Express. Other generics cost as little as $1 a month after a deductible. If you take a generic drug regularly for a chronic condition such as diabetes or elevated cholesterol, you might get an even better deal through mail-order. Some plans have little or no co-pays (after a deductible) on generic drugs ordered by mail.
6. Not keeping young-adult children on your insurance Under the health-reform act, you can now keep children on your insurance up to their 26th birthday, even if you don't claim them as dependents on your tax return or they are no longer in school or living with you. Your workplace can't charge a different premium for your adult children than it does for younger children. And eligibility isn't based on their living circumstances—they can stay on your insurance even if they get married. They can also go on and off your insurance as many times as needed. There are a couple of caveats, though. If you're retired, you might not have the option of keeping your children on your insurance. The law doesn't require retiree-only plans to cover adult children of beneficiaries. And Medicare doesn't cover any dependents, period, including spouses. If your workplace charges an extra premium for each added dependent (that's allowed), and your young-adult child is living and working independently, it may be cheaper for her to purchase individual coverage on her state's health-insurance marketplace. It costs nothing to check, in any event.