How to Save Money on Health Insurance Premiums
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Contents
- 1 Introduction
- 2 Don’t go without health insurance.
- 3 Buy a high-deductible health plan (HDHP) and a Health Savings Account (HSA).
- 4 Pick a plan that covers what you need and has low premiums.
- 5 Know your premium credits and subsidies.
- 6 Pick a plan that has lower deductibles, coinsurance, and copayments.
- 7 Choose the right network for you and your family.
- 8 You can save money on premiums by getting the right coverage and knowing how to get premium credits and subsidies
- 9 Conclusion
Introduction
If you don’t have health insurance, you’re probably spending a lot of time and energy trying to figure out how to afford it. But if you already buy health insurance through your employer or on your own, diverting some of those dollars into savings or investments is probably at the top of your financial priorities list. If only there were a way to get more for less…
Don’t go without health insurance.
Health insurance is a good investment. It’s important to have it in case of an emergency, and you can’t predict when you’ll need it. Even if your health is good right now, the chances are still high that at some point in your life (or maybe even tomorrow), something might happen that requires medical attention.
The best way to ensure that this doesn’t happen is by having health insurance; if something does go wrong with your body or mind and requires treatment by a doctor or hospital, then having coverage will help prevent financial ruin by paying out any costs associated with treating those issues before they get worse or become life threatening.
Buy a high-deductible health plan (HDHP) and a Health Savings Account (HSA).
If you’re healthy, a high-deductible health plan (HDHP) and Health Savings Account (HSA) are good ways to save money on premiums.
A HDHP has lower monthly premiums than other types of plans because it covers less–but this can work out in your favor if you use the savings toward other expenses or investments. For example, let’s say your employer offers four different types of coverage:
- Traditional plan – $300/month premium with $3K deductible; $1K max out-of-pocket per year for all covered services
- Preferred provider organization (PPO) – $250/month premium with $2K deductible; $500 max out-of-pocket per year for all covered services
- Point-of-service option – $200/month premium with no deductible; up to 50% coinsurance after meeting annual deductible
Highly recommended reading: “5 Ways To Save Money On Health Insurance Premiums”
To do this, make sure that the plan’s deductible, coinsurance and copayments are reasonable for your budget. If you have high-cost conditions such as diabetes or cancer, make sure the plan covers those treatments. And if there are services that don’t apply to your situation (such as maternity care), don’t pay for them!
If you have low or moderate income, there are several ways for you to save money on your health insurance premiums. The most common way is through the Affordable Care Act’s premium tax credits and cost-sharing reductions (CSRs). These subsidies lower the cost of monthly payments for people who buy individual plans through an exchange marketplace and qualify for them.
They’re available if:
- You make between 100 percent and 400 percent of the federal poverty level (FPL) — $12,060-48,560 in 2019
- Your household doesn’t qualify for Medicaid or Medicare Part A/B coverage because they live in a state that hasn’t expanded Medicaid under ACA rules; also known as being “expansion-eligible”
Pick a plan that has lower deductibles, coinsurance, and copayments.
Deductibles are the amounts you pay each time you visit your doctor or fill a prescription before your insurance kicks in.
Coinsurance is what you pay for covered services after meeting your deductible; it’s typically 20% – 40% of the cost of care (but may vary by state).
Copayments are smaller payments made at each visit to cover some of the cost of services (usually $10-$50 per visit).
Choose the right network for you and your family.
Choosing the right network can save you money. The first step in choosing a network is to make a list of all of the doctors, hospitals and specialists that you and your family need to see. Next, decide which ones are conveniently located for you. Then find out if any of these providers are covered by your insurance company’s preferred provider organization (PPO) or health maintenance organization (HMO). If there’s any doubt about whether or not a particular provider will accept your plan, call them directly and ask before signing up for it!
- Know your premium credits and subsidies. If you are eligible for premium tax credits, this means that the government will pay a portion of your monthly health insurance costs.
- Choose the right network for you and your family. Carefully consider all of the options available to determine which one best suits your needs based on price, coverage, location and quality ratings (for example: Aetna has an “A” rating from Standard & Poor’s).
- Pick a plan that covers what you need and has low premiums. Make sure to take into account deductibles, coinsurance rates (the percentage paid by the policyholder after reaching their out-of-pocket maximum) as well as copayments (the fixed dollar amount charged per visit).
Conclusion
You can save money on premiums by getting the right coverage and knowing how to get premium credits and subsidies. It’s important to keep in mind that these tips are just starting points–and there are many more ways to save on health insurance. But if you follow these steps, you’ll be off to a great start!
