It’s that time again when Americans choose their health insurance plans for the new year, and advisers warn this year is definitely not the moment to simply click auto enroll.
A 2024 survey from financial services firm Voya showed nearly half of Americans spend less than 20 minutes reviewing information related to their workplace benefits and 91% keep the same plan every year, but health care experts advise to make this year different. It will be worth your while, they said.
U.S. employer health care costs are projected to rise 9.5% in 2027, pushing average costs above $19,000 per employee and marking the fourth straight year of near double-digit increases, according to insurer Aon. To contain costs, employers may consider cutting benefits and raising premiums and deductibles. In 2026, employees pay an average of $5,297 for health care coverage, including both payroll contributions of $3,130 and out-of-pocket expenses of $2,167, Aon said. That’s up almost 8% from 2025.
“Health insurance has changed a lot,” said Michael Botta, founder and chief executive of health care marketplace Sesame. “It used to be more generous. If you pay more, you get more. Now, it’s more like catastrophic insurance. You pay everything upfront for all your care and insurance kicks in only if you spend more than $10,000 per year. It’s looking more like insurance in any other market.”
If All Health Insurance Costs Are Up, Should I Waste Time Looking at Options?
Checking options isn’t a waste of time because it can save you money. Not all plans are the same and not every person’s health care needs are identical.
Typically, companies these days will offer a high deductible health plan (HDHP) that will qualify for a Health Savings Account (HSA). HDHPs have lower premiums but high deductibles that can be offset with pre-tax money employees can contribute to a HSA and invest. Employers can also contribute to HSAs. Withdrawals used for qualified expenses are tax free.
A HDHP may work for someone without health issues who only expects to make routine doctor’s visits. However, if you plan to have some procedures or have a chronic condition that requires expensive medication and specialists, you may want to consider a plan with a lower out of pocket maximum, said Lindsay Theodore, thought leadership senior manager at T. Rowe Price.
Doesn’t My Company Research Plans and Secure the Best Group Rates?
Employer plans are generally a good deal for employees, partly because companies subsidize health insurance for workers.
However, recent court cases reveal there can still be stark differences between plans employers offer that could meaningfully affect workers’ budgets.
Earlier this year, employees sued Abbot Laboratories, accusing the company of knowingly offering two health plans that had identical benefits but one was significantly more expensive for employees – a critical detail that wasn’t disclosed. Employees of Northwestern University filed a suit against the school making similar allegations. Employees at both businesses alleged breach of fiduciary duty that caused employees to be overcharged for insurance.
“It’s tough for employees to figure out themselves (the costs), which is why employers have a fiduciary duty – the highest duty under the law to do what’s best for employees or beneficiaries,” said Andrew Schlichter, co-managing partner of Schlichter Bogard and counsel for the employee class in the Abbott case. “Employers have all the information, not employees. They just get open enrollment forms and options. Employees ended up paying more than they had to, and that can really affect their bottom lines.”
How Can Americans Figure Out What’s the Best Health Insurance Plan?
Here are some things to consider when comparing plans, advisers said:
- Don’t assume the first or most expensive one is the best.
- Calculate total cost of each plan. Total cost = premium + deductible + out-of-pocket costs + any copayments/coinsurance. Also calculate using the out-of-pocket maximum, which is the most you’ll pay before your insurance pays 100% of eligible services, for the worst case scenario.
- Don’t forget to evaluate the prescription drug plan if you or anyone else covered is taking any prescribed medicines. No matter what the cost is for health services, an expensive drug plan can derail a budget. Prescription drug plans have their own rules so people must check if their drugs are covered and if so, how. If you require a new or brand name drug, for example, some plans will make you pay the full price until your deductible is met and only then, will cheaper co-insurance or copays begin.
- Read as much as you can, even the fine print, to understand what services are covered and at what cost.
- Talk to your company’s benefits person or the health provider to clarify any questions.
Medora Lee is a money, markets and personal finance reporter at USA TODAY. You can reach her at [email protected] and subscribe to our free Daily Money newsletter for personal finance tips and business news every Monday through Friday morning.
Reporting by Medora Lee, USA TODAY / USA TODAY
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