Source: Photo: lusi

Source: Photo: lusi

Health insurance is one of those necessary evils in life. It isn’t mandated by law, like for auto, but any major health issue — or even three or four minor issues added together — can result in total financial devastation without some degree of coverage. Unfortunately, health insurance premiums continue to rise, making it difficult to obtain affordable coverage. Here are 7 tips that will help you reduce your health insurance costs.

Tip 1: Call your health insurance company

When you first get your premium increase notice, call your health insurance company. They have people who can help you find other plans that you are eligible for. These plans may have different coverage, and different terms, so pay close attention. I did this last month, and found a plan with a lower premium. I had to pay $10 more on my office visit co-pay, and accept a $200 deductible for prescriptions, but the savings in the premium more than offset those costs. Be careful, though. Make sure you understand the plan before you sign on. Sometimes a much lower premium masks a plan that has such a high deductible that you pay your expenses out of pocket and still have to pay the premium. In the long-term that can cost much, much more.

Tip 2: Comparison shop

Do a little recon. Check online for other plans. I found my plan from resource center. This site compares plans available in your area, and lets you see the benefits and costs, side by side. Realize that your employer’s plan may not be the best. Even if you don’t go through your employer, it is possible to find a group health insurance rate, as an individual or family. Now a days, it is easy to check for the best quotes on the internet as more and more insurance companies using the internet to court and educate customers.

Tip 3: Look for incentives

Some employers offer incentives for healthy lifestyles. For that matter, so do some insurance companies (but not many). Check with your human resources department to see whether your employer will kick in extra toward your premiums if you are certified as a non-smoker, or if you make regular use of gym facilities or have a gym membership. Find out the enrollment requirements so that you receive proper certification in time to take advantage of it.

Tip 4: Raise your deductible

Raise your deductible to get a lower premium. The more you pay out of pocket, the less insurance companies will charge you. This works especially well if your plan has a co-pay for routine office visits. This means that you do not have to worry about paying your deductible unless something major happens. Be careful if you have a 20/80 plan or a 30/70 plan. In these plans, you generally pay out of pocket until your deductible is met, then you pay a percentage (20% or 30%) of your costs after that point. In some cases, especially if you use health care services frequently, the lower premium does not make up for your increased responsibility to pay.

Tip 5: Evaluate your coverage

Check your coverage. Do you still need maternity coverage? Do you foresee an instance when you will need alternative treatments, such as acupuncture? If you have coverage that you don’t need, talk to your health insurance company about dropping it. Fewer benefits mean lower premiums. Also, consider your health. If you take reasonably good care of yourself, you may only need the most basic coverage available. Also, find out whether or not generic prescriptions are preferred on your plan. Generics can reduce your health care costs.

Tip 6: Consider your life stage

If you are young and healthy, only making visits once or twice a year for routine check-ups, it may be cheaper to use a PPO type of plan. Cost savings on the premiums can offset higher co-pays for doctor’s visits. A PPO plan also provides more flexibility in choosing providers as you are not tied to a primary care physician and you have the ability to self-refer to a specialist if needed. As you age, especially when you have children, you might consider enrolling in a HMO type plan. While HMOs have had a bad reputation in the past, there are programs now that are easier to deal with and even desirable.

Tip 7: Consider alternatives to health insurance

You can also consider alternatives to health insurance. These can either work in place of health insurance, or work in a complementary manner with your health insurance. Drop your prescription coverage and sign up for a prescription drug plan. You can also get a high deductible insurance plan, and open a Health Savings Account to help cover expenses. This way you are covered, but you can use pre-tax dollars to pay some of your expenses. Also, HSAs can be used to cover dental and optical expenses. Check for limitations, rates and possible fees with different HSA providers. Finally, there are health care co-ops that can help you pay for costs. These co-ops are not insurance. Instead, you pay a monthly fee, and then the co-op helps you pay a portion of your health care expenses.

Before you make any decision, though, it is a good idea to compare costs, and carefully evaluate your lifestyle and your past health care history. You want to make sure that you get the proper health insurance coverage for your needs.



Miranda is freelance journalist. She specializes in topics related to money, especially personal finance, small business, and investing. You can read more of my writing at Planting Money Seeds.