What It Covers
Health insurance pays for medical expenses — doctor visits, hospital stays, prescriptions, preventive care, mental health services, and more. Under the Affordable Care Act (ACA), all marketplace plans must cover a set of essential health benefits including emergency services, maternity care, prescription drugs, and preventive care at no cost.
Plan Types Explained
The alphabet soup of health plans can be confusing. Here's what actually matters:
- HMO (Health Maintenance Organization): Lower premiums, but you must use in-network providers and need referrals to see specialists. Best if you're okay with less flexibility for lower costs.
- PPO (Preferred Provider Organization): Higher premiums, but you can see any provider without referrals. Out-of-network care is covered but costs more. Best if flexibility matters to you.
- HDHP (High Deductible Health Plan): Lower premiums with a high deductible. Pairs with an HSA (Health Savings Account) for tax-advantaged medical savings. Best if you're generally healthy and want to maximize tax benefits.
- EPO (Exclusive Provider Organization): Similar to HMO but without referral requirements. You must stay in-network except for emergencies.
HSA vs FSA: Which One?
If your employer offers both, here's the key difference:
- HSA (Health Savings Account): Only available with HDHPs. Triple tax advantage — contributions are pre-tax, growth is tax-free, and withdrawals for medical expenses are tax-free. Rolls over indefinitely and is portable (it's yours even if you leave the job). In 2026, you can contribute up to $4,300 for individuals or $8,550 for families.
- FSA (Flexible Spending Account): Available with most plan types. Pre-tax contributions, but use-it-or-lose-it each year (with limited rollover). Not portable.
Pro tip: If you're healthy and in your 30s, an HDHP + HSA is often the best strategy. You get lower premiums, triple tax benefits, and the HSA doubles as a stealth retirement account — after age 65, you can withdraw for any purpose (not just medical) without penalty.
What to Look For When Choosing
- Total cost, not just premium: A plan with a $200/month premium and $6,000 deductible may cost more overall than a $350/month plan with a $1,500 deductible — especially if you use healthcare regularly.
- Network: Make sure your doctors, preferred hospital, and any specialists you see are in-network. This matters more than anything else.
- Prescription coverage: Check the formulary (drug list) if you take any regular medications. Tier placement dramatically affects your out-of-pocket cost.
- Out-of-pocket maximum: This is the most you'll pay in a year. Once you hit it, insurance covers everything at 100%. In 2026, the ACA caps this at $9,200 for individuals and $18,400 for families.
Life Changes That Trigger Special Enrollment
Outside of open enrollment (usually November-January), you can only change plans after a qualifying life event:
- Marriage or divorce
- Having or adopting a child
- Losing existing coverage (job change, aging off parent's plan)
- Moving to a new state
You typically have 60 days from the event to enroll. Don't miss this window.
Common Mistakes
Mistake #1: Choosing the cheapest premium without doing the math. If you visit the doctor regularly or take prescriptions, a slightly more expensive plan with lower copays and deductible often saves money overall.
Mistake #2: Not checking if your doctor is in-network before enrolling. Networks change every year. Verify before you commit.
Mistake #3: Skipping preventive care. ACA plans cover annual checkups, immunizations, and screenings at no cost. Use them — they catch problems early when they're cheapest to treat.