Open Enrollment for Marketplace Health Insurance Is Upon Us. Here Are 3 Tips for Choosing Your Coverage

If you're buying your own health insurance, here's what you need to know.

This month, a lot of salaried workers are in the process of choosing health insurance coverage for 2023 through their employers. But what if you're not entitled to health insurance through a job?

Maybe you became self-employed recently, which means you don't get access to company benefits. Or maybe you're retired but don't yet qualify for Medicare.

Going without health insurance can be a very dangerous thing. If you don't have health insurance, you could wind up having to raid your savings to cover things like unexpected hospital bills. So it's important to put coverage in place. And thanks to the Affordable Care Act, you can buy health insurance through the federal marketplace at HealthCare.gov from Nov. 1 through Jan. 15. 

If this is the first time you're buying your own health insurance, you may find the process somewhat overwhelming. Here are a few tips for narrowing down your choices.

1. Know your plan tiers

Marketplace health insurance plans are classified into different categories, or tiers. The highest tier is Platinum, which means you'll generally be looking at more comprehensive coverage and lower out-of-pocket costs for things like copays and deductibles. But you'll also generally be looking at higher premium costs. If you don't want to spring for a Platinum plan, you can go down one tier to Gold, two tiers to Silver, and three tiers to Bronze.

2. Consider an HSA-compatible plan

Health insurance plans that come with a higher deductible may be compatible with a health savings account (HSA). And those plans are definitely worth looking at.

HSAs let you contribute pre-tax dollars for healthcare spending purposes. They're super flexible in that they don't expire, so you can take withdrawals at any point in time and invest funds you don't need to spend right away. HSA withdrawals are also tax-free when used for qualified healthcare expenses -- things like copays and deductibles. 

Health insurance plans with an individual deductible of $1,500 or more, or a family-level deductible of $3,000 or more, are HSA-eligible in 2023 provided their maximum out-of-pocket caps don't exceed $7,500 for individuals or $15,000 for families. When you look at your plan choices, you'll generally be able to see immediately whether a given plan is HSA-eligible or not.

Of course, you may not love the idea of higher health insurance deductible. But generally, the higher your deductible, the lower your premiums, so what you pay in one regard, you'll save in another. And remember, an HSA can lower your tax burden, so there's that savings to consider when making your decision as well. 

3. Review your out-of-network coverage choices

It's not always possible to find a doctor or specialist you like within your health insurance plan's network. That's why it's important to see what costs you're looking at if you're forced to go out of network. You'll generally be on the hook for higher copays, and some health insurance plans won't offer any coverage at all if you see a provider who's out of network.

Buying health insurance is an important thing. Follow these tips to make the right decision -- and ensure you have the coverage you need.