For better or worse, most of what you already know about health insurance won’t change next year.
The good news is that if your plans change in 2025, you won’t have to relearn the basics. The bad news is that the fine print of most insurance policies “can be very complex,” so there’s still a risk of unexpected charges. Gary Young, director of Northeastern University’s Center for Health Policy and Research.
Frustration has been particularly high this year. The killing of UnitedHealthcare CEO Brian Thompson sparked an outcry against the health insurance industry, which has already come under fire from Congress over its role in setting prescription drug prices. Meanwhile, millions of people are struggling with medical debt as treatment costs continue to outpace inflation.
Whether you’ve already received your new insurance card or are still shopping for insurance, here’s what you need to know to lower your medical costs next year.
Let’s cover it first
According to KFF estimates, approximately 164.7 million Americans receive health benefits through their employer. Many of them have been weeks away from the end of the open enrollment period and have already selected new coverage options or been automatically re-enrolled in their existing plans.
Last year, an additional 21 million people chose insurance through the federal healthcare.gov portal. Open enrollment on this marketplace began in November and runs until January 31st, so there’s still time to purchase your own insurance plan. So, if you haven’t done so yet and plan on doing so, make it your top priority this January.
Make sure your provider is still connected to your network
Most insureds are familiar with out-of-network and inverse costs that arise from discounted rates that health plans negotiate with doctors and hospital systems. But some patients don’t understand that there’s always a risk that the doctor they’ve been seeing for years will no longer be covered by their insurance. The beginning of the year is the best time to check.
“It’s important to review plan documents in advance,” said Michelle Long, patient and consumer protection analyst at KFF.
You can call your provider and ask or search for plan documentation, most of which is usually available online, Long said. Insurers are also required to list the providers and pharmacies in their network, which can usually be found through a search tool on their website. In order to predict pricing, providers must also provide, upon request, an estimate of how much a particular service will cost.
There are several safeguards for patients in an emergency. A federal “no surprises” law that went into effect in 2022 limits costs for procedures performed by in-network doctors that require medications to be administered by out-of-network anesthesiologists.
“You didn’t choose to go to an out-of-network hospital or provider, but you ended up there because it was an emergency,” Long said. “In such cases, you should be protected from balance charges.”
Some states have their own laws and employer-sponsored laws that apply to all marketplace plans. But Long cautioned that if you’re among the 63 percent with “self-funded” plans with employer-sponsored insurance, you may not be protected by certain state laws. You can find out whether your plan is self-funded or “fully funded” (meaning your employer pays a fixed monthly premium to your insurance company) in your plan documents.
Either way, Long said, insurance companies can overcharge patients. “If you think you will be denied coverage or asked to pay more than you expected, you have the right to appeal,” she said.
Please review your medicine
Insurers’ “prescriptions” dictate which drugs are covered, but what’s on that list is sometimes a mystery and subject to intense scrutiny by drug companies and the intermediaries that oversee prescription benefits. This has become a point of political contention.
In July, the Federal Trade Commission accused these pharmacy benefit managers of driving up drug costs by excluding cheaper generic drugs from formularies. PBM denied that. The FTC also sued three major PBMs in September, accusing them of artificially raising insulin prices, a charge the companies deny.
Still, insurance companies are required to disclose a plan’s formulary, so Long suggests checking to see if your prescriptions are covered. If not, you may end up paying out of pocket, but you may still have options. In some cases, your doctor may prescribe a brand-name drug when a generic drug exists. In that case, your pharmacist can determine whether such an alternative medicine is applicable. You might save money.
Good news for seniors on Medicare. A new $2,000 annual cap on prescription drug out-of-pocket costs will go into effect in 2025 under the Biden-Harris administration’s signature Inflation Control Act. The rule is expected to be particularly beneficial to cancer patients, who face high costs for many prescribed drugs.
Check the fees charged
It’s always worth checking your deductible (the amount you have to pay each year before your plan kicks in), as it may have changed even if you re-enrolled for the same benefits this year.
According to KFF, the average deductible for employer-sponsored plans in 2024 was $1,787 for single coverage and $4,991 for family coverage. The average deductible for marketplace plans is even higher at $3,057, but it depends on the plan’s “metal level.” Most people choose “Silver,” which has a deductible of $5,241.
If you’re looking for a new plan, Young advised considering how often you’ll incur medical expenses. High-deductible plans tend to have lower premiums and monthly charges, but if you have a chronic condition that requires frequent hospital visits or prescriptions, you’re likely to have a lower deductible and stronger coverage. Therefore, plans with higher premiums are more cost-effective.
Even after you reach your deductible, depending on your plan, you’ll still have to pay a certain amount (copay) or a percentage (coinsurance) of each bill. Copays and coinsurance are more common in low-deductible plans, especially for prescription drugs, emergency visits, hospitalization, diagnostic imaging, and other services.
“Co-insurance can be very tricky and can leave you with unexpectedly large bills,” Young says. With typical coinsurance, the insurance company pays 80%.
For example, she said: “If a doctor charges you $2,000 for services rendered, you’re paying 20 percent of that, or $400. And that’s not for nothing.”
