Health insurance mysteries, explained | CNN

Editor’s Note: Sign up for CNN’s Stress, But Less newsletter. Our six-part mindfulness guide will inform and inspire you to reduce stress while learning how to harness it.

CNN
 — 

Whether you’re getting kicked off your parent’s health insurance plan or have been doing open enrollment for years, navigating health insurance jargon can be daunting.

Information about a plan’s coverage isn’t always transparent. Nor is there one right answer, since the best plan for you can depend on your health status and needs, said Dr. Renuka Tipirneni, an assistant professor of internal medicine at the University of Michigan Medical School.

“It’s confusing for me, and I’m somebody who focuses on health insurance policy,” Tipirneni said. “But I’ve also received a surprise bill myself. So, I think it’s really important to stay informed and then to recognize we’re all going to make these honest and easy mistakes, and then reach out for help when that happens.”

Not understanding your health insurance can have consequences, including the possibility of being faced with unexpected or unaffordable costs, Tipirneni said. You might even avoid getting care if you’re not sure how much you’ll have to pay.

Here are some common mysteries regarding health insurance, and what to know to get the care you need.

Why can’t you enroll in health insurance anytime you want?

“Insurance companies don’t want to have people signing up when they get sick,” said John Holahan, an institute fellow in the Health Policy Center at the Urban Institute in Washington, DC.

“Open enrollment is to protect the insurance company against what’s called adverse selection — in other words, people selecting insurance right at the time they need care, like buying homeowners insurance when your house is on fire,” Holahan said.

Open enrollment periods usually happen between fall and early winter, Tipirneni said. Typically, you can also sign up during certain life events such as losing insurance, moving, marriage, having a baby, adopting a child or if your household income drops below a certain amount.

If you have a low enough income to qualify for Medicaid — United States government-funded insurance — you can enroll at any point, Tipirneni said.

Some people are confused by the difference between premiums and claims. Premiums are the monthly fee you must pay to have health insurance at all — even if you never take advantage of your plan by getting medical care or medications, Tipirneni said.

A claim is the bill a health care provider sends the insurance company so the company will cover its portion of the health care service, Tipirneni said. Sometimes the provider will require you to submit the claim to the insurance company.

A deductible might sound like a discount, but it’s not. It’s the amount you have to pay out of pocket for health care before your insurance coverage kicks in, Tipirneni…