Top 5 Things to Know Before Choosing Your First Insurance Plan (New Grads Edition)

Author: Samantha Bridge, RN, MSN, MBA-HCM, IQCER
Date: April 12, 2025

You did it—you graduated, landed your first job (or are about to), and now someone’s handing you a health insurance packet and saying, “Just pick one.”

Cue the anxiety.

If you're feeling lost, you're not alone. Most new grads have never been taught how insurance works—much less how to choose a plan that actually fits their life. So here’s your crash course: five things every first-time enrollee should know before signing up.

1. Don’t Just Look at the Premium—Look at the Total Cost

It’s tempting to go straight for the plan with the lowest monthly premium. But here’s the truth: a lower premium doesn’t always mean it’s the cheapest plan—especially if you get sick or injured.

• Deductible: The amount you pay before insurance kicks in
• Coinsurance: The percentage you split with insurance after hitting your deductible
• Copays: Fixed fees you pay for services like doctor visits or prescriptions
• Out-of-pocket max: The most you’ll spend in a year (very important!)

💡 Example: A plan that costs $50/month might have a $7,000 deductible, while one that costs $100/month could have only a $1,500 deductible. If you end up needing care, the second one could save you thousands.

📌 Key takeaway: Always do the math based on your lifestyle and potential needs—not just the monthly sticker price.

2. Your Doctor Might Not Be In-Network (And That Matters)

Every insurance plan has a network—a list of doctors, hospitals, and clinics that have agreed to negotiated rates. If you go outside of that network, you’ll likely pay a lot more—or even 100% of the bill.

• Ask your current provider (if you have one) what networks they accept
• Use your insurance plan’s online directory to search by ZIP code
• Double-check before scheduling any visits or procedures

💡 Real talk: Even if a hospital is in-network, not all doctors at that hospital might be. Always confirm in advance.

📌 Key takeaway: Choosing a plan with in-network providers near where you live or work will save you money and headaches later.

3. Some Services Require Prior Authorization (Even If You Have Insurance)

This one surprises people the most: just because something is “covered” doesn’t mean you can just walk in and get it.

Insurance companies often require prior authorization (also called pre-approval) before you:

• Get a scan like an MRI
• See a specialist
• Start certain medications
• Have surgery or outpatient procedures

💡 Example: You get a referral for a knee MRI, but your doctor’s office doesn’t request prior auth. The bill? Over $1,000—on you.

📌 Key takeaway: If you’re getting anything more than a basic check-up, ask: “Does this need prior authorization?”

4. The Summary on Your HR Portal Doesn’t Tell the Whole Story

That cute chart with three plan options and green/yellow/red columns? It’s a marketing summary—not the full contract.

For the real information, look for:

• The Summary of Benefits and Coverage (SBC): A standardized document every insurer must provide
• The Plan Document: A more detailed breakdown of rules, limits, and what counts as “medically necessary”

💡 Pro tip: Ask HR if you can review the full SBCs or plan documents before choosing. Don’t be afraid to ask questions!

📌 Key takeaway: What you don’t see in the fine print can end up costing you hundreds—or even thousands.

5. Your State (and Employer) Affect What’s Covered

Here’s something most people don’t realize: not all health plans are created equal—even if they come from the same insurance company.

Coverage depends on:

• Your state of residence (each has different mandates and rules)
• Whether your employer has a self-funded or fully insured plan
• Your employer’s customizations—they choose what’s included or excluded

💡 Example: Walmart’s plan, available online, includes preventive care but may limit coverage for certain services outside their preferred network or regions. Another employer might cover the same service more generously—or not at all.

📌 Key takeaway: Always read the fine print, and don’t assume your plan covers the same services as a friend’s—even if it’s the same insurer.

Final Thoughts

Choosing your first health plan is like learning a new language—but you don’t have to be fluent overnight. Focus on understanding the basics:

• What each plan really costs
• Which providers are in-network
• What’s covered (and what isn’t)
• What happens if you actually need care

You’ll get more confident over time—and we’re here to help. Because you deserve insurance that works for you, not against you.

📚 Sources:

• Healthcare.gov: Understanding Plans & Networks
• Kaiser Family Foundation: Health Insurance Marketplace FAQs
• SHRM: First-Time Enrollee Considerations
• State Insurance Department Resources (varies by state)