Am I overpaying for health insurance? How to answer the key question this open-enrollment season.

Andrew Keshner

More people want to understand the fine print on plans this year, financial planners say

Picking health-insurance plans for 2027? Here's what to know.

It's time to pick a health-insurance plan for next year, and Americans are taking a harder look.

Open enrollment, which typically stretches several weeks into November, is when workers sign up for healthcare plans and fringe benefits for the coming year. For self-employed workers and retirees, it's the time to shop on public healthcare exchanges, though that deadline runs into December and January.

While people are looking for certain benefits to fit their needs, this open-enrollment season they're also focused on what they don't want: overpaying for insurance coverage they will not use.

"The focus is right-sizing. Clients want to know what's necessary, what's a true 'benefit,' and what might benefit the insurance company more," said Rosalyn Kemp, founder of Chestnut Beach Wealth, a fee-only financial planner.

Kemp said more people have been peppering her with questions about open enrollment this year. Several other financial advisers have noticed the same thing.

"The main shift I'm noticing is people really starting to ask what their insurance is actually covering," said Leah Copertino, founder and lead planner at Go Fish Financial Planning. More clients are moving to strategies where they are building a pot of cash to cover routine healthcare costs and taking coverage that guards just against truly catastrophic events, she said.

Even though the stakes and costs are high this year, many people don't spend a lot of time picking their plan.

Last year, approximately one-half of people spent less than an hour checking their options, according to a survey from the Employee Benefit Research Institute. Automatic re-enrollment to the same plan is common, the researchers said.

This year, there's added urgency to look closely. Workers are picking plans while their wages aren't keeping up with prices, and that includes the cost of healthcare coverage. So when people are thinking about their health benefits, they're also thinking about what those coverage choices mean for their paychecks.

Employers are in a pinch too. In the third quarter, businesses' healthcare costs grew more than 6% over last year, while salaries grew by 3.5%, according to the Bureau of Labor Statistics. Those fast-rising healthcare costs mean companies have less money to devote to raises for employees.

There's little relief in sight. It's increasingly expensive for employers to offer health insurance, and they can't absorb the increases themselves, said Joshua O'Gara, a partner at Prism Benefits, a health-insurance brokerage firm working with small and midsized employers.

O'Gara's clients expect the average price of a healthcare plan to rise 12% to 15% for next year, and possibly more. A lot of that is fueled by rising prescription costs, said O'Gara, a board member for the National Association of Insurance and Financial Advisors.

If workers have questions now, they're not alone. O'Gara said he's "never had so many phone calls" from fellow NAIFA members "asking for help navigating this."

Different plans, different needs

Employees may encounter several types of plan choices. People weighing the choices should think about their medical needs, their finances and how much risk - and money - they are willing to shoulder before insurers step in.

There are traditional healthcare plans with lower deductibles and higher monthly premiums. In 2025, workers paid an average of nearly $7,500 in premiums over the year, with a nearly $2,000 deductible, according to KFF. If someone expects frequent doctor's visits for themselves and their family, this type of plan may save money, said Andrew Huynh, owner of Pink Planning.

Then there are high-deductible plans, which offer lower monthly premiums, but consumers have to pay more out of pocket before their health insurance kicks in. These can be paired with a tax-advantaged health savings account, which allows people to save money for their medical expenses.

Next year, high-deductible plans need to have deductibles of at least $1,750 for a person or $3,500 for a family, the IRS said. Out-of-pocket expenses are capped at $8,700 for individuals and $17,400 for family coverage, though that doesn't count premiums.

For someone who rarely uses healthcare, the high-deductible plan may make sense, Huynh said. That's especially if their employer matches their contributions to the health savings account.

Just understand the risks of going with a high-deductible plan. For example, if someone fixates on the lower premium without having enough money for the deductible or other out-of-pocket expenses, they could be in a tough spot, said O'Gara. "It's an incredible financial vehicle - if you use it properly," he said.

A starting point to see if you're buying too much coverage

Monthly premiums, deductibles, copayments and coinsurance all go into a person's total healthcare expenses.

There's a back-of-the-napkin calculation that financial planner James Eppes uses to help clients see if they are buying too much coverage: Find this year's medical bills and add up the out-of-pocket costs, which include copays, coinsurance and deductibles, said Eppes, who runs Eppes Wealth Management.

Suppose someone pays a $600 monthly premium and has a $2,000 deductible. Then there's four routine visits with a $10 copay and a waived deductible, because these are routine visits. Yet there's also a bigger event, resulting in a $500 payment applied to the deductible. That would come to a cost of $7,740. (The $7,200 for premiums, plus the $540 for medical care itself.)

With that baseline, the hypothetical healthcare shopper could see what those numbers would have looked like with a high-deductible plan, Eppes said. Suppose the premium is $350 with a $7,000 deductible. Now, those same four routine visits and one larger event could add up to $1,500 in out-of-pocket costs. With $5,700 in premium costs, that would equal $5,700.

It's not a complete accounting of healthcare costs, Eppes emphasized, but a way to start thinking about the issue - and it's not the end of the conversation. People have to weigh their health needs and risk tolerance looking ahead to next year, he said.

If someone expects their healthcare expenses to be roughly the same as next year, Eppes said a higher deductible paired with an HSA, if allowed, could be the move to make. If the person anticipates more medical care in 2027, or if 2026 was a "lucky year" with less care than usual, sticking with the higher premiums could be the way to go, he said.

If things go wrong, having too little insurance - or worse, none - could be a financial crisis as well as a medical one, Eppes said. It can be tempting to look at paycheck deductions for coverage "as money you are not getting, as opposed to an important part of financial planning and risk management."

Some add-ons deserve a hard look

Employees may get offers for coverage on accident insurance, critical-illness insurance and hospital indemnity insurance. These may be worth skipping depending on the person's health, some advisers say. Of course, first read the fine print.

Accident insurance is a payment to the policyholder in the event of a covered accident, including burns, bone breaks and concussions. Critical illness is a payment for diagnoses that may include comas, strokes, kidney failures and certain cancers. Hospital indemnity coverage pays someone for the costs of an ongoing hospital stay.

These add-ons might help in certain scenarios, but the payouts apply to very specific events and conditions, Kemp said. "Sometimes, the better use of those premium dollars is building an emergency fund, investing for the future or contributing to a [health savings account] if you are eligible," she said.

However, hold on to disability insurance, several advisers emphasized. This insurance pays a portion of someone's income if they can't work because of an accident or illness. There's going to be an outsize financial impact if someone can't work and has no way to bring in money, Kemp said.

The offered disability insurance still might not be enough, several advisers noted. It's good to take a close look at the coverage terms, they said.

Remember summer tax savings

People may have the opportunity to put pretax money into flexible spending accounts for healthcare and childcare expenses. While these accounts can nip at a paycheck, they can save money in the long run.

Money in dependent-care accounts can go to childcare. Households can put up to $7,500 in these accounts, which can also be used to pay for kids' summer day camp.

This can help summertime finances, said Copertino. "This way, camp is funded with pretax dollars that come back to you as a reimbursement once camp happens, instead of permanently blowing up your summer cash flow."

The dependent-care FSA is different from a healthcare FSA, which may also be offered during open enrollment. For next year, people can put up to $3,500 in healthcare FSAs.

Be strategic about how much money to set aside.

The money in a dependent-care account for 2027 has to be used by the end of the year, unless the employer has a small 2028 grace period. Up to $700 in unused healthcare FSA funds can roll over, but it depends on the employer.

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-Andrew Keshner

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11-13-26 1011ET