Saving money on health insurance can be a tricky proposition that requires you to strike just the right balance. On the one hand, you want to keep your costs affordable, manageable, and predictable. On the other hand, you don’t want to cut too many corners. That could leave you and your family with inadequate coverage that exposes you to risks that aren’t worth taking.
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To that end, you want to be smart and safe about saving on health insurance. Here are seven ideas that are worth exploring. They will keep you well protected while also making your coverage more affordable.
Get Help From a Broker
Insurance brokers are independent professionals who work for the end clients who hire them, not for the insurance companies that provide the coverage. Thus, they are incentivized to sell their customers the best, most comprehensive insurance products at the most affordable possible prices.
Brokers excel at giving case-specific advice. For instance, you may be confused about the relative merits of plans that allow you to choose your own physician (PPO plans). Or maybe you need more information about alternatives that appoint a physician from an organizational network for you (HMO plans). Depending on your situation, the relative costs associated with each option can vary significantly. Choosing wisely could save you money. A broker can advise you on the most cost-effective option for your particular case. They will help guide you to the plan structure that provides the best coverage for the best price.
Open an HSA
A health savings account (HSA) is a specialized type of tax-sheltered savings account designed for people who have high-deductible insurance plans. Individual account holders can make regular contributions, which many employers will supplement or match as part of an employee’s benefits package. You can then use these funds to cover eligible health expenses that fall under your deductible. You can also use it to pay for overages not reimbursed by your plan. For example, if your plan only covers 80% of dental fees, you could use your HSA to pay back the other 20%.
HSAs allow you to enjoy the savings advantages of carrying a high-deductible plan while shielding you from the risks. Your insurance provider may automatically offer you one if you purchase a high-deductible plan. If not, you can inquire about availability through your preferred financial institution.
Opt for Generic Alternatives
Some plans cover prescription drugs. Here’s a word of advice: brand-name drugs are typically 30 to 50 percent more expensive than their generic counterparts. However, their active ingredients are identical and their formulations are essentially the same. If your plan covers prescription drugs, specify that you will go generic if it will save you some money on your premiums. If you pay out of pocket for your medications, buy generic alternatives to save hundreds or even thousands of dollars per year.
Though not related to health insurance, this works for over-the-counter drugs too. No-name ibuprofen works just as well as Advil, for way less. Just Google “generic replacement for [desired medicine].” Your budget is already thanking you.
A growing number of physicians and medical networks are offering telemedicine services for non-emergency issues. Telemedicine is conducted over the internet: you’re connected to a doctor, usually via a video link, where you can explain your symptoms. In many cases, physicians can complete a diagnosis and offer you treatment options within minutes. All without requiring an in-office visit. That means consultation costs are much lower.
Taking advantage of telemedicine services when they are offered can save you a bundle. The concept is still emerging and is expected to really take off in the 2020s. It’s already an option in many locations and it’s certainly something worth looking into.
Pay Up Front and Know What You’re Consenting To
If you know you have to undergo a particular set of tests, a certain operation, or a specific medical procedure, check to see if paying in advance is an option. Patients who pay for services ahead of time often receive automatic discounts. This strategy also shields you from itemized costs for supplementary services and supplies. Those extra fees can get out of control if you wait until afterwards to deal with billing.
Along the same lines, always ask your physician what is and isn’t strictly necessary when they recommend or order tests. Insurance companies usually won’t cover tests they deem medically inessential. That leaves you on the hook to pay for them. If a test isn’t totally necessary and your insurer won’t cover it, consider opting out. Remember that you have the right to say no.
Consider Non-Traditional Coverage Options
An alternative coverage model known as health sharing plans are gaining momentum as an alternative to traditional packages. A typical plan might only cover an individual and his or her dependents. Health sharing plans are jointly owned by a wider pool of participants, who all contribute to each other’s coverage.
Essentially acting like a group health association, health sharing plans can be far less expensive. Some analyses show that they cost as much as 50% less than traditional plans, all while providing the same level of coverage. One caveat: eligibility requirements can be strict, so you’ll likely need to be relatively fit and generally healthy to take part. Certain pre-existing conditions could mean getting denied entry.
As with all other types of insurance, health insurance costs are calculated using advanced and highly precise mathematical risk assessment models. The more risk you pose, the more you’ll pay for your coverage.
The best way to reduce your risk from an insurer’s perspective is to get healthy. That means getting into a healthy body weight range if you’re overweight, cutting down on alcohol consumption, quitting smoking, joining a gym, or choosing other ways to get active. Your wallet won’t be the only beneficiary, either. Improved health gives you more energy and vitality, often leading to a longer, higher-quality life.
These strategies are all designed to help bring down your health insurance costs without sacrificing your level of coverage. There are many other options at your disposal to save on health insurance. You could choose a plan with high deductibles, opt for low-cost care providers, or scale back in other ways. You might want to consider these strategies if you need to find additional savings, but they generally leave you exposed to risks and coverage gaps.
Always shop around carefully before committing to a particular health insurance plan. Keep in mind that the plans available through government-endorsed exchanges vary from state to state. To that end, it’s also well worth it to investigate what’s offered through private markets instead of relying solely on government websites.
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