7 Health Insurance Considerations
to Help Pay for the Rising Cost
of Health Care
This article contains a checklist of 7 key ways to save money on healthcare insurance that most people overlook to their detriment.
Understanding your health insurance options is a first step to help rein in your medical costs.
Rising employee health insurance costs are particularly insidious according to Michael F. Cannon, writing in the Daily Caller.
His contention is it’s a myth to believe employers shift health insurance costs to employees. “Employers cannot shift to workers a cost that workers already bear,” he writes.
Employers don’t truly “contribute” any portion of the employee’s health insurance premium. It all comes out of the employee’s wages; either as premium directly paid by the employee, or through wages lower than they otherwise would be to cover the cost of the premium.
In this light, it makes sense to pay extra attention when looking to secure health insurance both on your own or through an employer.
Health insurance plans are complex, and come in all shapes and sizes. Determining what insurance plan is right for you is a complicated process. You need to take into account your age, job, income, number of dependents, general health, and other factors.
Health insurance companies won’t do much to help you pick, since they’re primarily concerned in making money off of you. And the government is just making the process worse by adding levels of bureaucracy and regulation.
If you receive health insurance through your job, your first step should be to consult your employer and figure out what your options are. Most companies offer a limited array of coverage, allowing you to select from an HMO and PPO and then from a list of primary care providers.
In any case, not all insurance plans are created equal (or right for you), here’s a rundown of seven things to remember when picking a health insurance plan:
#1: Keep a Close Eye on the Yearly Deductible
Insurance plans with high yearly deductibles won’t start paying for coverage until after you’ve paid a certain amount out of pocket (you assume greater risk with a higher deductible). Determine what amount is good for you based on your wants and needs. For instance, if you suffer from a medical condition that requires frequent trips to the doctor or hospital, you’ll probably want a lower deductible. But if you’re young and healthy, a high-deductible plan can keep your monthly premiums lower.
#2: Know Your Location
If you’re thinking about moving or live near a state border, you should research how expensive your health insurance costs will be – and how good the medical infrastructure is there. The same can be true on a local level; simply relocating a short distance, such as across a county line, can mean important differences in health care costs and access to quality care.
Be sure to look into local variations if you are selecting a community in which to retire. Generally the most expensive health insurance plans are found in the Northeast while the least expensive are found in the West and South.
#3: Ask For a “Free Look”
Believe it or not, many insurance plans offer free trial periods called free looks. If your insurance company offers a free look, you’ll have a matter of weeks to try out your health plan and see how you like it. If it’s not for you, you can get a full refund at the end of the trial period. Just make sure you carefully read all the rules and restrictions governing the free-look period, so qualify for that refund.
#4: Know Yourself
Buying health insurance is largely an issue of deciding between costs and risk. Should I pay more in premiums or risk paying much more if I need a major operation later in life? Knowing yourself well is the only way to answer that question.
#5: Determine the Lifetime Maximum Benefit
Many health insurance plans come with a lifetime maximum benefit. It is literally the total maximum amount of coverage you can receive on the plan. (Remember that many, though not all, new health insurance plans won’t have lifetime maximum benefits if Obamacare holds up.) Again, this is a matter of risk. If you’re willing to take the chance, you’ll pay lower premiums for a lower lifetime maximum benefit. However, patients with serious and recurring medical conditions should avoid low lifetime maximum benefit plans.
#6: Stay Up to Date on New Laws Governing Health Insurance
The government’s intervention in the health insurance industry has created a market that’s constantly changing. The 2010 health care ‘reform’ law, for example, establishes insurance exchanges at the state level through which consumers can select from a menu of insurance plans. The law also allows young adults to remain on their parents’ insurance plans until they’re 26, which could be useful if your son or daughter suddenly loses a job. If there are any changes that impact your plan or the health care laws, you need to know about them. (Paying attention to such matters is one of the key services I perform for readers of my monthly subscription-only advisory letter, Independent Living.)
#7: Don’t Be Afraid to Consult an Insurance Broker
In most states, the health insurance broker’s fee is paid by the insurance company and the premium you pay for insurance includes the broker’s commission. So, if you have serious doubts about which health insurance plan to buy – and especially if you have a debilitating medical condition – find a service oriented and experienced health insurance broker and set an appointment for a consultation.
Health-insurance costs will continue to be an increasingly pressing issue in the future. Take some time now to keep tabs on your situation.