Money Management

It’s time to choose a new health insurance plan for 2024. Keep reading for helpful pointers to decide which option is best for you. 

In many states, open enrollment for health insurance began on Nov. 1, and it will run until Jan. 15 or 16, 2024. Now is the time to select a new health insurance plan for 2024. This time of year comes with a lot of questions, and there are a lot of options to be weighed when you pick a plan — high deductible or not? What metal level do I need? What’s the right coverage for me?

Well, worry not (OK, maybe that’s not realistic — worry less). Whether you’re choosing a new plan through your employer or facing down the healthcare marketplace on HealthCare.gov or your state’s web portal, let’s run through a few helpful tips to land on the best health plan for you and your finances.

1. See how much you spent in 2023

The year’s not quite over yet, but you should be able to get a fairly good idea of how much you spent on health insurance premiums, copays, and various bills in 2023. Go through your checking account or credit card statements (actually, having an easier time tracking how much you spend for medical care is one point in favor of putting medical bills on a credit card).

Having at least a rough idea of how much you paid for medical expenses this year will make it easier to estimate how much you can spend in 2024. I do have the sad duty of reporting that according to data amassed by Peterson-KFF, you’re likely to spend between 2% and 10% more on insurance premiums in 2024, as they are going up (just like basically every other expense in American life).

Unfortunately, there’s no planning for a medical catastrophe, but you might have regular medical expenses that pop up that you can plan for. For example, I usually end up with a winter ailment like a sinus infection every year. If I know that I’m likely to need a trip to urgent care and a round of antibiotics, I can ensure that those expenses will be mostly covered by my healthcare plan.

2. Consider who you’re insuring

You might not only be buying insurance coverage for yourself. If you have a spouse or domestic partner, kids, or both, you might be on the hook for insurance to cover all of you. So also think about everyone else’s health needs alongside your own.

Does your spouse have a chronic condition? Do your kids play sports? Ensure the coverage you’re buying is adequate to minimize the hit to your checking account from medical bills.

3. Decide whether you’d rather pay more upfront or over time

When you pick a new health plan, you’re given the choice of four different metal levels: Bronze, Silver, Gold, and Platinum. These inform the cost of your premiums and the level of coverage you get.

Bronze plans have the lowest premium costs, but also often the highest deductibles (the amount you must pay before your insurer picks up the tab). A Platinum plan will cost you a pretty penny every month, but you’ll have a low deductible and more comprehensive coverage. So it’s worth deciding whether you’d rather save every month (and perhaps put the money you’re saving into a health savings account), or pay more and be assured of not receiving big bills after care.

4. Pick any extras you qualify for

Speaking of that HSA, if you want an eligible plan, you’ll need to read the fine print to see if you can get one. For 2024, a plan eligible for a health savings account must have a deductible of at least $1,600 for an individual plan and $3,200 for family coverage. And the out-of-pocket maximum is $8,050 for individual coverage and $16,100 for families.

Another extra you might have available to you, if you’re insured through your employer, is a flexible spending account (FSA). These can be pretty neat, as they let you set aside pre-tax dollars for medical expenses. But unlike an HSA, you can’t roll over those funds from year to year; you must use them or lose them. So think hard about whether it makes sense for you to contribute to one.

You probably have a lot of questions about health insurance and open enrollment, so I hope my tips here have helped. If you need additional help, you can reach out to an insurance navigator or broker via HealthCare.gov’s Find Assistance page. Good luck with insurance shopping!

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The U.S. economy is strong. Yet consumers have their concerns. Read on to learn more. 

Broad economic conditions don’t tend to impact consumers as much as personal economics. For example, unemployment might rise and consumer spending might decline. But that likely won’t matter to you as much as an unexpected bill that has you raiding your emergency fund or racking up a balance on your credit card.

That said, it’s natural to want to have a pulse on how the economy is doing. And it’s natural to worry when indicators are pointing to a downturn.

Right now, unemployment is low and the labor market is strong. Despite that, consumer confidence has taken a hit in recent months.

The Conference Board’s Consumer Confidence Index® declined in October to 102.6, down from 104.3 in September. That marks three consecutive months of decline. And it’s an indication that Americans aren’t feeling wonderful about the economy.

Why the pessimism?

There are a few reasons why Americans’ economic outlook may not be so rosy. First, September and October were fairly volatile months for the stock market, so some people may have seen the value of their investment portfolios decline. That’s always unsettling.

Also, borrowing is very expensive in the wake of a series of rate hikes by the Federal Reserve. The central bank opted to pause interest rate hikes at its Oct. 31-Nov. 1 meeting. However, consumers are still reeling from higher interest rates for products that range from credit cards to auto loans to just about everything in between. And that could explain their negative view.

Don’t stress, but do prepare

Right now, the economy is not exactly flashing warning signs of an impending recession. So that’s the good news. But it still pays to set yourself up to withstand an economic downturn should that happen.

One of the best ways you can gear up for that is to pad your emergency savings. Aim to have enough cash in the bank to cover three months of essential expenses at a minimum. And if you can save beyond that, even better.

Another area to focus on is growing your job skills. That way, if layoff activity starts to increase, you can feel more confident in your ability to get another job.

Also, do your best to try to pay off expensive debt, like lingering credit card balances. Not having costly payments hanging over your head could make a recession (or, you know, life in general) far less stressful.

Though it’s easy to see why consumers might feel less confident about the economy, the reality is that current conditions aren’t dire by any means. In fact, it’s fair to argue that the economy today is strong.

Following its last meeting, the Federal Reserve issued a statement saying, “Recent indicators suggest that economic activity expanded at a strong pace in the third quarter.” So that might help you feel better about the economy.

But if not, do your part to prepare for a downturn. Knowing you have more money in the bank, boosted job skills, and less debt might better do the trick of helping you sleep at night.

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A shorter-term loan might be expensive. But if you can swing, it could pay to sign up. 

There’s a reason so many would-be buyers are discouraged from entering the housing market today. Mortgage lenders are charging exorbitant rates for those looking to finance a home. And even if you can afford a mortgage, you may be turned off by the notion of having to pay almost 8% interest on a home loan — especially when, just a few years ago, it was possible to sign a mortgage at 3%.

But there is a step you can take to snag a lower mortgage rate today, and it’s taking on a shorter-term loan. A 15-year mortgage is less risky in the eyes of a mortgage lender than a 30-year loan, because it’s being paid off sooner. You’ll generally be eligible for a lower interest rate on a 15-year loan than a loan whose term is twice as long.

Right now, the average 30-year mortgage rate is 7.76%, according to Freddie Mac. For a 15-year loan, the average rate is 7.03%. That’s a notable difference. So if you’re able to swing the higher monthly payments that come with a 15-year loan, you may want to go for it.

You can’t just bank on refinancing

Some people might say that signing a 15-year loan to save money on interest isn’t necessary because in a few years, mortgage rates are apt to come down. And from there, you can just refinance your mortgage into a lower rate.

But that strategy hinges on the assumption that rates are going to move downward, not upward. We can’t say for sure that will happen.

And if rates do fall, that may not happen for years. So you may decide that instead of signing a 30-year mortgage at a higher rate, you’ll sign a 15-year loan at a lower rate and know that you’re reaping some savings on interest.

Also, even if borrowing rates do come down, you’re not guaranteed to be able to refinance. What if your credit takes a massive hit at the time that rates fall? There may be more attractive rates out there, but if you can’t snag a better deal, you’ll be stuck with your original interest rate.

How much can you save with a 15-year mortgage?

Many people won’t be able to afford the higher monthly payments that come with a 15-year loan. But if you can swing them, then you stand to save a bundle.

Let’s assume you’re buying a $250,000 home and are putting 20%, or $50,000, down. If you take out a 30-year loan at 7.76%, you’ll be looking at monthly payments of $1,758. You’ll also be looking at paying a total of $387,730 in interest over the life of your loan if you never manage to refinance.

Now let’s look at a 15-year loan for that same amount at 7.03%. You’ll be looking at monthly payments of $2,308. But you’ll spend a total of $170,456 on interest in the course of paying off your home. So if you’re able to swing an extra $550 a month, you stand to save over $217,000 in interest all in.

Today’s mortgage rates are expensive across the board, no matter your loan term. But if you sign a 15-year loan instead of a 30-year mortgage, you might at least get a bit of a break.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.

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