Are you looking for ways on how to save money on health insurance? Well, you are in the right place, as this article will give tips on how to save money on health insurance.
Health insurance is not cheap. Unless you’re lucky enough to work at a company that provides health benefits or a student eligible for school-sponsored coverage, buying an individual plan can be quite costly.
That said, it’s almost impossible to avoid spending money on health care. Even people who are fortunate enough to have coverage through their employer must pay premiums to maintain that benefit.
In fact, according to the Kaiser Family Foundation, the average employee contribution towards premiums was $1,255 per year in 2017. That might not sound like a lot of money, but when we consider other expenses related to healthcare—such as co-pays and coinsurance—the costs add up quickly.
Health insurance is a necessary expense for many people, but it doesn’t have to break the bank. If you’re on a tight budget, there are ways to save money on health insurance that don’t involve cutting corners on your policy.
Healthcare costs continue to rise, with premiums now accounting for the largest expense for many Americans. The average monthly premium for an individual with employer-sponsored health insurance reached $590 in 2017, up from $411 in 2013 and $318 in 2014.
Understand how much you spend on healthcare in a year and how that may change in the future. If you anticipate large expenses soon like dental work or braces for your child, buying a cheaper plan right now may not be ideal. On the other hand, if you don’t spend much on healthcare as it is and don’t foresee changing that anytime soon, there are likely some affordable options out there. You just need to know where to find them.
With medical expenses on the rise, it’s more important than ever that you find ways to save on healthcare costs. Fortunately, there are various ways on how to save money on health insurance.
Before we dive into the specific ways on how to save money on insurance, let’s start by defining some health insurance terms you need to understand.
Health Insurance Premium
Health insurance premium is the money you pay monthly or yearly for your health insurance coverage. This money is to be paid every month whether you went to the hospital for any medical ailment or not. So it’s a fixed price you pay monthly to secure funds for your health. Some people call it health care cost.
The average premium a person pays is $465 per month. But the premium prices differ from companies and are also based on your coverage.
This is the flat rate paid for specific health care services. If you have a co-pay service and go to the hospital, you will owe the physician money for the services. It’s best to do more research to know what to expect here.
Co-pay differs depending on your health insurance plan. You could apply for emergency rooms, doctor visits, prescriptions, or walk-in clinics into your plan.
A deductible is an amount paid every year for health services before your health insurance company begins to take care of your health bills.
This is the percentage you pay from your purse for every medical bill. For example, if you are on a plan with 20% coinsurance, that means you have to pay 20% of the medical bill while the insurance company handles the rest.
Let’s get started on how to save money on health insurance.
How to save money on health insurance
Health insurance can be an expensive proposition, with monthly premiums and annual deductibles that are sure to strain your budget. When you look at the costs involved, it’s easy to see why many people elect to forego coverage and risk a financial penalty instead. Fortunately, there are ways that you can cut down on your expenses — even if you have a low income or fall into a restricted eligibility range for government subsidies.
If you’re ready to take the first step toward affordable health insurance, keep reading for advice on how to save money on health insurance.
1. Decide which plan is best for you
The first step you take to save money on health insurance is to decide the best health insurance plan for you. It would be best if you didn’t judge a health plan by the price you pay for the premium. Although the first thing we always check when buying a health insurance plan is how much it costs, that is not what we should be most concerned about.
Your financial status, income, and expenses talk about how much you can afford. If you end up going for a health plan that has you paying a low premium, you might pay more for coverage if you or your family member goes to the hospital often.
2. Shop around for health insurance plans
When you want to go for a health insurance plan, shop around for more than one health insurance company. Compare their policy, the coverage they offer, their monthly deductibles, and also their premium. You can also inquire from people who use those health insurance plans to know how well their different health insurance service is.
The health insurance company with the costliest health plan doesn’t mean the plan will give you what you are looking for. This is why you shop around, so you get the one with a moderate price and at the same time enjoy their services.
In essence, getting a health insurance plan that satisfies you is one way of saving money as you get the satisfaction of your money well spent on the best health plan for you.
3. Employer’s Insurance
Most employers provide health insurance plans for their employees. If your workplace offers a health insurance plan to its employees, that’s the first place to look. Even though there is a charge attached to your health insurance plan offered by your employer, it will be cheaper than going for a private or individual health insurance plan.
The health insurance plan paid by your employer may have limited options but is cheaper because it is paid in group, and also, your employer shares the cost of your premium with you. This helps you save money.
4. Get added to a family plan
Insuring your family members is important as they don’t have to pay for medical bills. However, buying an individual health insurance plan for every family member will be more expensive. So to save money while insuring your family members, you need to opt-in for the family floater plan.
A family floater plan is a single health plan for families. This plan will reduce the money spent on health insurance while allowing you to increase your coverage.
5. Use a health insurance broker
A health insurance broker is an expert in finding the best health plan for you. They often work in more than one health insurance company, which means they can look out for by telling the best plan that suits your budget and has enough coverage.
6. Understand your plan rules
Understand how your health plan works and learn how to maximize the benefits. For instance, some plans might require you to get approval from the insurance company before seeing the doctor. This will be costlier because you might be asked to take 100% responsibility for seeing a specialist without preapproval. You can use the company’s specialist, which will be cheaper, and you mustn’t get a preapproval.
7. Buy a health insurance plan as early as possible
Buying a health insurance plan at an early age comes with many benefits, especially the low cost of a health plan. This is because elders fall sick more compared to youngsters. As you begin to age, your immune systems begin to get weak and can’t work effectively in fighting some antibodies as they used to when you were still young. So you tend to fall sick faster.
The cost of a health insurance plan becomes higher when you are old age, and the possibility of buying one then reduces. According to Ramesh Saxena, a Delhi-based financial planner: “One may also not be eligible for the insurance cover at that time” (old age).
So, it would be best if you bought an insurance plan when you are young to save a considerable amount on your premium.
Health insurance companies tend to give their loyal customer discount for having been with them for a long time. This is where buying a health insurance plan as early as possible pays. You get a discount for being their loyal customer, and with this, you get to save a considerable amount of money.
8. Review your insurance plan yearly
Always check out your health plan annually to ensure you are still in the company’s best plan. If not, you can change your plan. Most health insurance companies bring in a new policy in order to draw more customers to themselves. This new plan might be cheaper than your current one and might have similar benefits, so reviewing your plan at least once a year is the only way to find out.
9. Find health insurance discounts
Every health insurance company gives its clients discounts on their plan if they are able to keep up with some tasks like keeping fit, eating healthy, and so on. Ask your insurer and know the discounts they offer and how to keep up with them.
At the end of every year, do not forget to request your discount. This will come in handy while looking for ways to save money on insurance.
10. Save money on prescription drugs
Before getting a plan or renewing it, ask your health insurance company if they have the drugs you take regularly. Suppose they do compare the prices and see which is cheaper. Getting to know the difference in the price of the drug you take regularly will help you reduce costs as you will go to the provider that sells better.
11. Go to the hospital only when you have to
Most people think that once they are health insured, they have the freewill to always go for a check-up even when it’s not needed. Every time you go to the hospital for an unnecessary test, it is added to your deductibles. At the end of the year, you pay a higher deductible.
If you have a slight illness that you can take care of without having to call your health insurance company, do so. So as not to increase the price of your monthly premium or yearly deductibles.
12. Negotiate services costs and discounts
When you go to the hospital to treat an illness, be sure to negotiate with the billing department on the amount you pay so you don’t get overcharged. You can also request for discount from them. Some hospitals give their patients discounts on certain things like; if they pay in advance if they pay with cash, and if they make the hospital understand how high you will pay as deductibles.
13. Find out if you qualify for government assistance
The Government helps the people out by paying for their health insurance, depending on their income. Even if you earn high, you can also qualify for the Government-funded health insurance program. Make sure always to check to know if you are in luck.
14. Inculcate healthy eating habits
You can save yourself from always going to the hospital for a test or treating an illness by inculcating a healthy eating habit. The less you go to the hospital, the more you save money which would have been added to your deductibles.
15. Renew before the plan expires
You get a bonus when you renew your health insurance plan before the previous year expires. This is one of the discounts health insurance companies give their clients.
16. Don’t choose unnecessary coverage.
The coverage you select will determine how much you will pay as your premium. So the more coverage you choose, the more you pay for your premium. So to reduce the amount you get to pay as a premium, you need to select only the necessary coverage.
Health insurance is essential for anyone who can get it, but it’s also one of the most expensive costs of living. In fact, a report by the Kaiser Family Foundation found that average premiums for marketplace plans will rise by another 14% in 2023. The good news is there are still ways to save money on your health insurance. Even if you’re not eligible for premium subsidies, there are many ways to keep your costs down while still getting a quality plan.