With the ever increasing changes to the health care system, including the most recent affordable care act, many consumers are uncertain on how to select the most cost effective plan. There are steps to take in order to save money on your health care insurance costs. Also, read about how to save on medical bills.
1. Lower Contributions/Higher Co-pay and Deductible : The main decision you will need to make is trying to find the most cost effective mix of health insurance plan contributions that you need to pay versus the potential cost when you have to go to the doctor or hospital. This is where you and your families health history, current health needs, and future expectations (for example, a new baby) need to come into play.
Most of us would naturally like to choose the cheapest health care option (average family plans cost $3000 a year) in order to minimize our contributions throughout the year, particularly if you have barely used a number of your coverage options. However, most experts and guides will tell consumers to err on the side of caution. If you are relatively new to corporate health plans or if you have a variable family health history, it is usually cheaper and almost always better to take a more expensive/higher coverage plan because if you do end up in the hospital the coinsurance and out of pocket deductible, and associated bills, could very well cost you much more than what you would pay in additional contributions to your health care plan.
2. Be sure to carefully read the Health Care Plans/Brochures that your company sends out. Sadly many people glaze over or even ignore the annual open enrollment brochures and then they end up waiting to the last day to confirm their plan. In most cases if you take no action on your insurance plan then that will mean your current health care insurance policy will continue, at the more expensive premiums of course.
Also, in addition to being faced with higher premiums, there are usually other changes in your coverage which may have an adverse impact on you. You may usually also be able to save money on your health care bills by moving to a lower cost plan if the coverage options change in your favor (such as preventive treatments which a number of plans are now covering at 100%). So you need to be sure to take the time to read the materials sent out to you ahead to time, and never rush to determine the best options for you and your family at the very last minute.
3. Young Children will equate to More Doctor/ER visits: If you have babies or young children, always decide on a plan that gives you more coverage because studies and statistics show you are likely to have many more doctor visits, higher bills to pay, and generally more hospital visits. Also, in the unfortunate event that you are ever in hospital with a young child the very last thing that anyone would ever want to worry about is health insurance coverage and any medical bills you will need to pay. The costs of going more than twice to an ER in a one year period of time will most likely eat up any potential savings a cheaper insurance plan could have provided.
4. Shop Around and Research Your Options: There are a number of useful resources available on the internet when it comes to choosing the right health plan, and many companies will help you to decide. You can find advice, spreadsheets, and sometimes scenario calculators to help you make your decision.
5. Flexible Spending Accounts: They are rapidly becoming a must have. If you plan well and also spend the budgeted amount on your medical bills, you can get some serious federal and state income tax savings. Most of these plans are now automated so that you have no paperwork or manual submissions to deal with. You need to remember to spend the allotted amount before the end of the year or the cut off date. You can always find a way to spend the amount in your account.
6. Knowing your company contribution to your health insurance premium and CORBA: Most company health plans will subsidize employee health insurance premiums, which is what makes health care plans affordable for most workers. Understanding the amount the company pays, which is the company subsidy percentage, is very important to understanding the full cost you could be paying should you lose your job. As if you ever lose your job, you will be eligible to be covered by CORBA for a period of time, but doing this means that you will most likely be paying 100% of the insurance premium bills.
7. Never pay for/buy too much health insurance: Most company sponsored plans will offer some type or level of free Accidental Death & Personal Loss Insurance and Life Insurance. These plans are normally expressed a multiple of your salary. If you are young, healthy, or if you do not have any dependents than in most cases the free insurance provided could be sufficient to meet your needs.
On the other side of the spectrum, if you do have health problems, if you have had complications in the past, or if you have lots of dependents it may very well be a good idea to get the maximum life and accident insurance that you can get at the discounted company plan rates.
8. Keep Receipts Of Your Medical Bills: Some flexible spending accounts will require an audit or review at year end. If you have no receipt, you may have to pay fees. Also, keeping track of your medical expenses is a very effective way to predict future medical costs and it can help you select a realistic FSA budget for the year ahead.
9. Complete the health insurance risk questionnaire. Many mid to large companies will ask their employees to complete a questionnaire or survey covering topics such as weight, exercise patterns, cholesterol, and family history. Generally these forms are used to determine what wellness programs might help you.
However, a key benefit is that almost all these programs will have an added benefit like discounted premiums, free memberships to a gym, reduced health care premiums, or a cash reward just for completing the form. When there is "free money", you need to take it. It is is likely that taking these surveys will lead to savings on your premium in the form of lower rates.
10. Know your doctor's participation status: For those who may have a choice of health plans to decide between, the most important factors are the price you will pay and also whether the family's doctors participate in the health care plan's network. So before choosing or changing your health insurance plan, you need to make sure the doctor you use is in the selected plan. This will help ensure your visits to them are covered, which will result in lower medical bills.
The more knowledgeable and informed that you are about your health insurance options and their costs, the better equipped you will be to make the best choices for both you and your family for the upcoming year.
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