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Should I Let My Individual Health Insurance Plan Automatically Renew?

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Should I Let My Individual Health Insurance Plan Automatically Renew?

Purchasing a health insurance plan for you and your family is crucial, as it provides financial protection in case you need to deal with a medical condition. Buying an individual health plan is a complicated process that requires a lot of thinking to find the option that suits your needs, and those needs may change on an annual basis. To avoid this hectic search, most people find it convenient to let their health insurance plans renew yearly once they have purchased one. While this might save them time, it is not essentially a good idea.

Choosing to automatically renew your plan while buying health insurance will result in an automatic renewal of the same plan. You will get the same benefits and coverage, but the cost will typically increase. This can work if your needs and finances have not changed in the past year and the same plan works well for you. However, automatic renewal will leave you with no flexibility or modifications in your coverage options.

Why Is It Important to Contact Your Agent Before Your Individual Health Insurance Plan is Automatically Renewed?

You should ask yourself a few questions when it’s time to renew your policy: Are my healthcare needs different now? Has my plan changed for the coming year? Does this plan still work with my budget?

These are all crucial considerations while evaluating your individual health insurance plan. To make sure you are not left out of significant policy changes in your plan, it is recommended that you consult your agent to rethink your options and how you can make a better choice in terms of your medical needs.

Here is why contacting your agent to review your plan is recommended every year:

  1. Coverage Benefits Change Every Year

Insurance companies tend to make various changes to their health insurance plans every year. They add new plans while modifying and even excluding their previous ones. It is possible that your current plan will change with the changing year. For example, an insurance company can make the following modifications to its policies:

  • Changes in the annual deductibles. The cost of these deductibles can either increase or decrease.
  • Like deductibles, companies can change their premium prices, making them either higher or lower.
  • Changes in the cost of prescription drugs
  • Changes in the pricing of copayments for doctors and hospitals visits
  • Changes in the coverage options – for example, your plan might add the requirement of referral for visiting a specialist
  1. Your Healthcare Needs Can Change

Just as companies can change their policies, your healthcare needs can also change. Your agent can help you evaluate your situation and see if you need to change your current plan. For example, you might need to modify your plan in the following cases:

  • A new family member adds to your family
  • One of your children turns 26 and is no longer covered under your coverage
  • You have a planned surgery
  • Your health status changes


  1. Your Health Plan Might No Longer Have Your Preferred Doctor

“Doctors’ Network” is a significant consideration while choosing or renewing your health insurance plan. Your agent can inform you about the changes your provider made to your current plan. There is more than one way you can lose access to your preferred network due to new changes in the policy, such as:

  • Suppose you have a plan with a low monthly premium. In that case, it can restrict you to visiting only a handful of doctors and hospitals. Make sure you check their list to see if your doctor is available on the network’s list.
  • Encountering a new medical illness can require you to receive specialist care. Your agent can help you see whether that specialist is available in your current plan.

You can also reevaluate your plan if you had trouble finding the right doctor in your previous health insurance plan.

  1. Your Provider Can Change Their Coverage Location

Insurance companies sometimes change the areas they are providing coverage for. Your plan will not automatically renew if your insurance company stops offering plans for your zip code. This is only true if you have bought insurance directly from the company. Meeting with your agent can help you identify such issues and assist you in getting a new health insurance plan for continuous coverage.

  1. You Can Save Money by Buying a New Plan

A lot can change yearly, including your health status, medical needs, financial situation, and family size. Choosing a health plan that is up to date with your changing situations and needs can help you save money on your health insurance. It is suggested that you actively reevaluate your health insurance instead of letting it get automatically renewed to save money when one of the following situations occurs:

  • If the cost of monthly premiums, deductibles, and coinsurance is increasing with your current health insurance plan and the current price does not fit your budget.
  • You find a better insurer or health insurance plan offered by your state’s marketplace.
  • There are changes in your income.
  • Your health status change requires new medical services.

You Might Get Better Tax Benefits

As per Income Tax Act 1961, a few health insurance plans offer tax benefits. These tax deductions are applicable to monthly premiums and people who are receiving critical care. Suppose your current plan does not have this benefit. In that case, you can talk to your agent to see if a more beneficial health insurance plan is available that can serve your needs at a relatively lower cost.

The Wrap Up

While the majority of people may prefer automatically renewing their plans as they find it more convenient, it is not always in your best interest. With the constantly changing healthcare system, your medical needs, and your financial status, it is wise to talk to a broker to make sure you are getting the coverage you need for yourself or your family. Contact us today, our services are free to use.