When it comes to health insurance, understanding your options can be a bit complicated. There are many common points of confusion, but let’s clear things up.

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1. Why can’t I sign up for a health plan whenever I want?

In most cases, you can only apply for a new health plan once a year during a period called open enrollment, which runs from November 1 to January 31. This enrollment period is designed to help keep health insurance costs low. Without a limited enrollment period, healthy people could wait until they get sick or injured to buy a plan, which would increase costs for everyone. Imagine if you could buy auto insurance after a car accident: auto insurance would probably stop existing. By setting a limited period to enroll in coverage, it ensures that insurance companies serve both healthy and sick people, and that premiums do not skyrocket.

If you experience certain life-changing events, such as losing your health insurance because you lost your job, getting married, having a baby, or moving to California or within the state, you may qualify for a special enrollment period outside of the annual open enrollment period.

2. Why is health insurance a good idea from a financial point of view?

Health insurance can be a significant monthly expense. Monthly premiums can seem like a lot of money until you look at how much health care services cost. For example, treating a broken leg can cost up to $7,500. The average cost of a three-day hospital stay is around $30,000. Cancer treatment can cost hundreds of thousands of dollars. Health insurance gives you an important financial safety net to help protect you from high, unexpected costs like these. When you think of health insurance as an investment in your overall physical and financial well-being, the cost may seem more reasonable.

Also, health insurance might not be as expensive as you think. Covered California negotiates with insurance companies on behalf of consumers to lower costs while also connecting enrollees with federal financial help. Many people do not know they may qualify for financial help through a free service like Covered California. Four out of five people receive financial help. Try ourquick cost calculatorto see how affordable health insurance can be and how much financial help you may receive.

3. Why do I have to pay a deductible and copays if I already pay a monthly premium?

When it comes to the total cost of health insurance, there are usually three parts: premiums, deductibles, and copays. The premium is the monthly payment you make to have a health insurance plan; the deductible is the amount you are responsible for before full coverage begins—similar to auto insurance, where you may have to pay a deductible to cover part of a repair—and copays are fixed amounts you pay for each visit or treatment.

Many insurance plans include both deductibles and copays. As a general rule, plans with higher premiums have lower deductibles and copays, while plans with lower premiums have higher deductibles and copays. By offering a wide variety of plan options, health insurance companies give consumers the opportunity to choose the plan that best fits their needs.

Through Covered California, you can choose from four categories of health plans: Bronze, Silver, Gold, and Platinum. The benefits are the same for each level, but they differ in how costs are shared between you and your health plan. In the Gold and Platinum levels, which have higher monthly premiums, enrollees are not responsible for any deductible.

However, the most important thing is that by choosing a health plan, you control how much each part of your coverage can cost. Choose the plan category that works best for your health, your family, and your budget.

4. Can I still get health insurance if I have a pre-existing condition?

There was a time when people with preexisting health conditions were denied health insurance coverage or were penalized with higher premiums. The Patient Protection and Affordable Care Act changed that.

If you have a pre-existing medical condition, you cannot be denied health insurance coverage or charged more for that reason.

5. Why do I need health insurance if I am in good health?

Health insurance is a smart decision for your overall health; it is also the law. Starting in 2020, California residents without health insurance may face financial penalties when they file their taxes, unless they qualify for an exemption.

Beyond penalties, having health insurance is a key part of maintaining a healthy lifestyle. Preventive services such as lab tests, vaccines, and screening exams are often covered at no cost and can help prevent serious and expensive health problems that might otherwise go unnoticed. In addition, even if you are in good health, eat well, and exercise, no one is protected from accidents. Remember that $7,500 hospital bill for a broken leg? Invest in health insurance to give yourself a financial safety net and help you stay healthy for many years.

Learn more about the basics of health coverage.