Suze Orman: Don’t Make This Health Insurance Mistake During Open Enrollment
Written by
Karen Doyle
Edited by
Levi Leidy
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If you get your health insurance through a plan that is sponsored by your employer, once a year you receive notification that “open enrollment” is about to begin. Open enrollment is the period of time during which you can make your health insurance plan selections for the upcoming calendar year.
Suze Orman, author, podcaster and personal finance advisor to the masses, cautions employees not to make this mistake during open enrollment.
Understand Your Costs
Healthcare costs go beyond insurance premiums. There are also deductibles and co-pays to be considered. It’s important to understand each of these costs.
Premiums
In a recent blog post, Orman refers to increasing premium costs that are expected in 2026. In fact, Mercer predicts that employers will see an increase of 6.5% in premiums if they have already taken steps to reduce costs. The increase could be even higher — around 9% — for those employers who have not implemented cost-cutting measures.
While it’s likely that employers will absorb some of this cost, part of it is likely to be passed on to employees in the form of higher premiums. So, it’s important to understand what your new premium will be.
This amount will be withheld from your paycheck to cover your portion of your health insurance costs, so an increase in your premium means less money in your paycheck each month.
Deductibles
A deductible is the amount of money you have to pay before your insurance kicks in. Some plans are considered high-deductible health plans, or HDHPs. These plans, as the name suggests, have a higher deductible than other plans, meaning you pay more out of pocket before insurance starts to cover your expenses. The advantage of a high-deductible plan is that the premiums are lower than with other plans.
Another advantage of a high-deductible health plan is that you can often pair it with a health savings account or HSA. An HSA is a tax-free account you can put money into before taxes to pay for costs your health insurance doesn’t cover, including deductibles. The money you contribute to an HSA is pre-tax, and you don’t pay taxes on it when you withdraw the money to pay for qualified medical expenses. Your employer may also make contributions to your HSA.
The trick to a high-deductible health plan is to make sure you have enough money to pay the deductible. If you do, choosing an HDHP makes a lot of financial sense. Do the math to figure out if it’s cost-effective for you.
Co-Payments and Co-Insurance
Understand your plan’s other costs, like co-payments and co-insurance. These are your share of costs that are incurred when you see a doctor or go to the hospital. Be sure you know how much your co-pay and co-insurance amounts are and understand if they vary based on whether a provider is in or out of your insurance network.
A co-payment is a fixed amount that you pay to the provider. For example, you may have a $30 co-payment when you see a specialist. Co-insurance is a percentage of the total cost of a claim that you pay after you have met your deductible. For example, you may pay 20% of the cost after your deductible is met.
Comparing Insurance Plans
Your employer may offer more than one plan, so it pays to compare before you choose. Different plan types and confusing terms can make it a challenge to compare apples to apples, but here are some tips for choosing the best plan.
Comparing Plans Side by Side
Your employer may offer a comparison of the available plans. If so, this is a good place to start. Look at what’s offered and familiarize yourself with the high-level features of each plan.
Watch Out for Networks
Health insurance companies often have networks of providers who agree to their terms of payment. These providers are considered in-network, and the insurance company wants to induce you to use them, so they will cost you less. If you have providers you currently use and want to continue to use, make sure they are in network for any new plan you choose.
Sometimes a facility or a practice will be in a network, but a doctor who works in that facility or practice won’t be, so be careful.
Use This Year as a Guide
A good way to compare health plans is to look at what the healthcare costs you incurred this year would cost you next year under each of the plans you’re considering. You can dig out your claims and receipts for 2025 and estimate what each item would cost if you had been covered by the 2026 plan(s) you are considering. You can exclude any one-time, extraordinary expenses if you want, but this is a good way to identify the best plan for the way you use healthcare.
Even if your employer offers only one plan, understanding your costs can help you budget for healthcare costs, which will prevent a medical emergency from sinking your financial ship.
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