For many people, healthcare costs are always increasing, and saving money on health insurance feels more and more out of reach. For instance, in 2017, a typical American family of four paid over $7,100 in health insurance premiums. This excludes the out-of-pocket costs. Despite the high insurance costs that keep rising, it is a must-have for everyone if you do not want to face a financial disaster. This is because medical debts contribute to almost half of all bankruptcies in the U.S. Although having health insurance is a must; there are steps that you can take to save money.
Compare the options you have
The first tip in every money-saving effort, including on health insurance, is to know all the options that you have. For coverage, these options will vary according to whether your workplace gives health insurance benefits or if you are looking for individual plans. Each of these two has its advantages, as discussed below.
Advantages of employer-paid group plans
- Your employer will choose the health insurance company as well as plan options
- Your employer will share in the costs of premiums with you
- Your premium contributions, as well as those from your employer, can be made pretax
On the other hand, if you rely on your own business or your workplace does not provide insurance benefits, you can partner with a health insurance expert to advise on the best options.
Advantages of individual plans
- You can select a plan allowing you to see the doctors you want
- You can opt to change jobs without losing your insurance coverage
- You choose the insurance company and plan that works best for you
Knowing how different plans work
This is where a number of people go wrong by just jumping in on the first plan they face. To categorize your health insurance plan options, you need to follow these three ways:
- Health Insurance network types
- Health insurance tiered plans
- High deductible health plan (HDHP)
You can find more information about these three methods online or from a health insurance pro.
Using Health Savings Account (HSA)
An HSA allows you to save money in a saving account that is specially dedicated to your health care costs tax-free. Therefore, using an HSA is a perfect way to save money on your health insurance costs. Below are some advantages of using an HSA
- You can take advantage of the tax-free savings
- Your contributions rollover year-to-year
- You can invest in your HSA funds, so they grow over the long haul
- Lower monthly premiums will help you save money
In almost, if not all instances, you will save money when you use doctors, hospitals, and clinics in your health care plan’s network. By using this in-network, you will take advantage of the relationship your plan has with these care providers. These care providers will lower fees on their services in exchange for gaining access to the network members of your plan provider.