Picking health insurance can be tricky: 6 key terms to know as open enrollment starts
Many people will soon be picking their health insurance plans for 2024: November is a common month for workplace open enrollment, and the public marketplace opens Nov. 1.
But choosing a health plan can be tricky.
In fact, a 2017 study found many people lose money due to suboptimal choices: Sixty-one percent chose the wrong plan, costing them an average $372 a year. The paper, authored by economists at Carnegie Mellon University and the Wisconsin School of Business, examined choices made by almost 24,000 workers at a U.S. firm.
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Health plans have many moving parts, like premiums and deductibles. Each has financial implications for buyers.
«It is confusing, and people have no idea how much they could potentially have to pay,» Carolyn McClanahan, a certified financial planner and founder of Life Planning Partners, based in Jacksonville, Florida, previously told CNBC. McClanahan is also a medical doctor and a member of CNBC's FA Council.
Making a mistake can be costly; consumers are generally locked into their health insurance for a year, with limited exception.
Here's a guide to the major cost components of health insurance and how they may impact your bill.
The premium is the sum you pay an insurer each month to participate in a health plan.
It's perhaps the most transparent and easy-to-understand cost component of a health plan — the equivalent of a sticker price.
The average premium paid by an individual worker was $1,401 a year — or about $117 a month — in 2023, according to a survey on employer-sponsored health
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