How to Budget During Open Enrollment Health Insurance Season (2025)

Some people may experience a turning point in their financial lives during the open enrollment period. Your payment and degree of protection for the next year will depend on the decisions you make today.

It’s easy to select a low-cost health insurance plan and move on, but remember these selections will impact your finances. Open enrollment is a great time to ensure your health insurance plan meets your needs, save money for unexpected expenses, and avoid unexpected costs.

This article will help you understand your insurance policy, examine the cost, and create an action plan so that you can move toward your financial and health goals. We will review everything, including how to utilise HSAs and FSAs effectively and establish a health emergency fund.

We’ll also review how tools like Beem’s Everdraft™ can help you manage financial difficulties when adapting to new rates or unexpected costs.

Step 1 – Review Your Current Health and Financial Situation

Start by examining everything calmly.

Why is health insurance surfacing this year? Did you start a new medication, develop some chronic disease, or are you anticipating a surgery or a baby?
Who is the most relevant person or people to consider when you go about designing your plan? Who is older, you, your spouse, or your children?
How much did you really pay for medical expenses last year? Collect all of your papers related to medical expenses, including doctor’s appointments, prescriptions you paid for – including potentially over-the-counter medications, and any copays you may have paid, including dental and vision, out of pocket. Document all appointments and track any lab tests, imaging, or other tests you have paid for as well.

The goal is to recognise patterns, not accuracy. A low-premium, high-deductible plan may cost more in the long term if you see several specialists and fill a lot of prescriptions. You can save money by switching to an HDHP with an HSA if you are in good health and primarily use preventative care.

Take this out. Making a quick inventory of fixed and variable costs can make planning the following stages much easier.

Step 2 – Understand the True Cost of Each Plan

The premiums are the icing on the cake, to put it simply. Numeracy is found in:

Twelve times the monthly insurance premium amount
Before receiving any benefits from your insurance, you must pay the deductible.
Prescription medications and medical appointments, especially those to specialists, may be subject to copayments and coinsurance.
The highest amount you can expect to pay is the annual out-of-pocket maximum.
Does the provider network include your doctor? Providers outside of your network can deliver subpar care.
Drug formularies can tell you whether and to what degree your prescription is covered.

Create a “medium-use” year with a few tests and a few sick visits, a “low-use” year with no medical care at all, and a “high-use” year with a lot of chronic care, specialists, or medical treatment.

In this manner, the three plans can be compared. Add the premium charges for each scenario to determine the total out-of-pocket costs. What matters is the total, not the expense.

Step 3 – Balance Premiums and Out-of-Pocket Costs

There is no one-size-fits-all answer. The examination of cost-benefit is simple:

Lower rates often result in higher deductibles and a greater likelihood of needing to pay out of pocket.
You have lower deductibles and a more stable cash flow when you need medical care if your premium is higher.

A high-deductible plan may be a wise option if you don’t use healthcare frequently and have a substantial emergency fund. A more expensive plan can save you thousands of dollars if you require extensive medical care or take expensive medications.

Take the money flow into account as well. A higher-premium plan may be easier to budget for every month, even though the total cost may be similar to a lower-premium plan that hits you hard when you need medical attention.

Read related blog: Making Sense of Health Insurance Costs

Step 4 – Use Health Savings and Flexible Spending Accounts Wisely

Although both FSAs and HSAs are strong, there are some significant differences between them.

HSA, or Medical Savings Account

Available with particular HDHPs.
Tax deductions are available for pre-tax contributions, tax-free growth of the funds, and tax-free withdrawals for qualified medical expenses.
The money that rolls over from year to year can be invested. This can be a sizable nest egg in terms of long-term health.

Take Flexible Spending Into Account

Although many employment plans offer this, most are “use it or lose it” (although some do provide a grace period or permit a limited amount to be carried over).
Set up money for future medical costs, such as payments for braces.

Getting an HSA should be your top priority. Combining an emergency fund with a retiree health account is the best of both worlds. When giving an FSA, caution should be used. Don’t put in too much and risk losing money you won’t spend.

Consider the funds you automatically contribute through payroll as untouchable savings. You’ll be appreciative later.

Step 5 – Revisit Other Monthly Expenses to Adjust for New Premiums

Before raising your monthly rates, ensure you have adequate funds in the bank. Among the useful methods are:

It’s never a good idea to delay buying something you want or subscribing to a service that you don’t need.
If you ate less often at restaurants or went grocery shopping less frequently, you’ll be able to cut costs in some areas. You can also find savings by bundling your phone bill with your internet bill or by purchasing both services at a better price.

As you attempt to regain your equilibrium, let’s assume you require some breathing room. Consider safe, interest-free emergency financial options.

You don’t have to use high-interest credit cards to compensate for a minor schedule inconsistency, such as a premium increase that occurs before a raise or bonus is received. Apps like Everdraft™ from Beem can be helpful.

However, these tools are merely a means to an end, not an end in themselves.

Read related blog: How to Make the Most of Open Enrollment

Step 6 – Compare Employer Coverage vs Marketplace Plans

You should not choose your employer’s decision mindlessly. If your employer makes a modest contribution, consider exploring marketplace plans instead, as your family may qualify for income-based subsidies. Look at this:

Disparity between employer-paid premiums and market prices
Networks of providers and covered medications
Being able to lower expenses or obtain tax credits

Families receiving subsidies or those with special medical requirements can discover that their jobs provide better health insurance options. In other cases, marketplace plans are more affordable and offer greater convenience. Work things out.

Step 7 – Account for Dependents and Family Needs

Consider your own and your dependents’ requirements when travelling. Costly individual and family health plans. Dental and vision coverage may be worth considering if your children require regular cleanings or tests. Set aside money for such items in advance.

Insurance can help, but it won’t cover all. Having a specific health emergency fund in addition to your regular emergency savings is a brilliant idea if you want to be better equipped to handle unforeseen medical expenses, dental emergencies, or prescription costs.

Step 8 – Set Up a Health Emergency Fund

Depending on the size of your family and the amount of your deductible, you should try to have a few hundred to several thousand rupees (or the local equivalent) on hand. Store it in a high-yield savings account that is both convenient and secure.

Once you use the loan, you should be prepared to repay it. However, in the event of a genuine emergency when your resources are insufficient, options like Beem’s Everdraft™ can help you avoid incurring debt.

Step 9 – Take Advantage of Preventive Care and Wellness Benefits

Many insurance plans cover annual physicals, screenings, and vaccines at no cost. Preventive treatment can save money by detecting issues early.

Inquire about the health benefits included in your plan, such as gym memberships, smoking cessation programs, telemedicine services, mental health support, and management of chronic illnesses. These benefits may keep you healthy over time.

Step 10 – Review Your Budget and Benefits Annually

You only have to go through open enrollment more than once

By monitoring your health care expenditures every three months, you can prevent financial shock at the end of the year.
To monitor what was effective: Have you paid your deductible? Have the prices of your prescription drugs gone up or down?
Instead of going with your intuition, use those real numbers to help you plan for the following year.

If you check in for a straightforward evaluation once every three months, you can ensure that your coverage continues to fulfil your requirements successfully. You won’t have to rush at the end of the year if you do this.

Conclusion

Take some time to consider open enrollment rather than rushing through it. The perfect plan offers fixed costs and comprehensive coverage. It can also meet your family’s health needs. You can protect both your health and your finances by making it a habit to regularly review your financial situation, monitor your actual spending, and utilise HSAs and FSAs effectively.

When switching to a new plan or premium, tools like Beem’s Everdraft™ can help you be responsibly flexible if you have a short-term cash flow problem. If you want to be financially secure in the future, you must save, plan, and utilise your benefits effectively. Download the app now!

During open enrollment, budgeting is less about giving up things and more about finding the best financial and health coverage. Making these choices today could help your health and economic status next year.

FAQs on How to Budget During Open Enrollment Health Insurance Season

How much should I allocate for healthcare in my annual budget?

You should save 5% to 10% of your salary for a budget, depending on your age, health, and how many others live with you. Your insurance will cover the rest, and a more accurate estimate would consider how much you spent last year.

What’s the difference between an HSA and an FSA for budgeting purposes?

The ability to invest or roll over HSAs is a long-term benefit. FSAs typically have an expiration date or a limited carryover period if not used, and they are intended for predictable, short-term expenses.

Should I switch to a high-deductible plan to save money?

Your health, emergency savings, and other circumstances will determine the benefits and drawbacks of an HSA; however, it may be a wise choice. If you expect a large medical bill, it may be more economical to opt for a plan with a lower deductible.

How can I handle premium increases without disrupting my budget?

You can utilise a short-term solution, such as Beem’s Everdraft™, to cover missed deadlines, reduce discretionary spending, or rearrange your monthly budget. Repayment of borrowed funds must be made promptly.

When is the best time to start budgeting for next year’s open enrollment?

You should begin keeping track of your medical spending around the middle of the year. Three months before open enrollment, you should have a firm understanding of your options.