Many people who have individual health insurance don't realize that they are overpaying. Here are a few suggestions on how to cut costs...
- Shop around, just as you would with any other consumer good. The health insurance market has become far more competitive than it was even a few years ago, and it pays to review your policy at least once a year to compare it against what is currently on the market. Just about everyone who does finds that they can save money.
- When you are ready to buy a policy, do the math! When you do, you will likely find that choosing a high deductible plan, preferably one that is HSA qualified, makes the most sense economically. If you calculate your yearly health care expenditures from years past, paying close attention to how much you may have spent for routine things like office visits, a prescription here or there, etc., you will probably find that going with a plan with a higher deductible ( $2,500 or greater) is more financially prudent than paying a lot extra for a more traditional policy. It is probably a good idea to carefully track your health care expenditures, and there is an excellent tool offered by Simohealth which you can download for free for just this purpose.
- If at all possible make sure your policy offers some prescription coverage. It is not uncommon for some people to pay more than $5,000 a year and more for prescription medications. If you find yourself as one of them, you are going to wish you had it. Additionally, make liberal use of free or low-cost discount cards. They can save you hundreds of dollars each year.
- Save by shopping online for prescription medications especially if you are on routine meds. You can find out which pharmacies offer the best deals by going to pharmacychecker.com. It is amazing how much the smart shopper can save.
- Know your policy. It is estimated that 99% of all policy holders give their policies a very close reading after they have a major claim. Of course by then it is too late. Read your policy before you have a major claim so you know what to expect. Most carriers offer similar provisions and exclusions, but it s vitally important to know what they are to avoid nasty surprises. Use your agent as a resource. A good one will be patient and will actually encourage questions.
- Know your network! Though networks might seem limiting to some extent, they are actually one important way that health care costs are managed. If you go out of network, expect to pay hefty fees in the form of added deductible and co-insurance. If you are not sure whether a facility or practitioner is within a given network, consult your insurance carrier, your agent, or the facility or practitioner providing the treatment.
- It is possible to save significantly by rewriting your policy every year if your insurance company will allow this. If not, you may want to seriously consider switching to another carrier altogether. In order for a policy to be re-written, generally, everyone on the plan being considered must be as physically healthy as they were when the policy was first issued. If everyone on the policy does not qualify, then those remaining who still qualify can still be re-written. The reason re-writing your policy is a good idea is because the internal rate of increase for the plan is often more than the external rate of increase. That is to say, a particular plan might cost more for someone who has been on it for several years than it would for someone just joining it. By re-writing your policy, you effectively are re-joining. Of course not all insurers allow their members to re-write their policies. Where this isnýt allowed, switching to a different carrier is often a wise choice.
- Know when to get pre-authorization. If you read your policy, there are many instances when the insurance company requires pre-authorization. Without pre-authorization, your insurance company may impose a penalty or refuse to pay the claimýeven if it would have approved the claim had you called.
- Complete the picture. Most people donýt know that term life insurance is incredibly inexpensive now. For people under the age of 45, $50 a month will buy hundreds of thousands of dollars worth of coverage. In many cases it is also wise to consider both long-term disability and long-term care insurance.
- Get off COBRA as soon as possible.
