Health insurance cost have been on the rise for decades and there is no sign that will stop anytime soon. The Federal government is worried about how to fund programs like Medicare and Medicaid, and employers are looking to cut healthcare premium costs as much as possible. As an employee you may feel helpless to simply take whatever plan your employer hands you, but you do have some say in how to lower your own personal health insurance premiums. Take the following advice in your trek to lower healthcare costs.
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Some employers only offer one health insurance plan to their employees. If you find yourself in that situation you don’t have much choice. You can take it or leave it to buy health insurance on your own.
However, some employers do offer a few plan options. If your employer gives you options you need to read up on as much information on the two plans as you can. One plan might have slightly higher premiums, but lower co-pay costs for the types of office visits you make most. The cheap plan might have a significantly lower total lifetime insurance cap. The cap isn’t a problem until you have a long hospital stay after an accident when costs can skyrocket into the hundreds of thousands of dollars. You might be liable for those costs if you have a low cap plan.
The reading material is dry and the plans are probably confusing. Get as much education and assistance as possible to help you make the wisest decision for you and your family.
As you are picking through the insurance plans, consider using a plan that lets you save pre-tax dollars in a Healthcare Savings Account (HSA) or Flexible Spending Account (FSA). With these accounts you will be able to lower your overall tax bill and spend the same money as you always would on your healthcare costs. There is no valid reason to avoid having one of these accounts if you are given the option to.
If you are shopping for health insurance on the marketplace, consider a High Deductible Health Plan (HDHP). These plans come with a high deductible that is set by the IRS. This year the minimum deductible for singles if $1,200 and for family coverage it is $2,400. Your maximum out of pocket is different, too: $5,950 for singles and $11,900 for families. Your HDHP will give you access to an HSA where you can set aside at least your deductible throughout the year.
The key factor to know between a HSA and a FSA is the HSA money doesn’t expire or go away without you spending it. This can be useful with a HDHP plan because you might set aside $100 per month for the first 12 months in order to pay for your minimum deductible. But if you don’t need insurance the first year because you never get sick or go to the doctor, you will start next year with $1,200 in your HSA to start. With a FSA the money must be spent by December 31st every year. Any money not spent is turned back over to the plan; you lose control and access to it forever.
As you are picking through your employer’s plan be sure to compare everything with your spouse’s health insurance through their employer. You have three options: the two of you on your plan, the two of you on your spouse’s plan, or each of you on an individual plan with your own employer. You might find it cheaper to run on individual plans through each employer, just be sure to read the fine print. Some employers have weird rules when it comes to covering your spouse and want to know if they have coverage options elsewhere.
While your insurance plan choice has a big impact on your costs, there are other factors that can lower you overall costs, too.
With employer premiums consistently rising, employers are desperate to make sure their employees are as healthy as possible. The more healthy the pool of employees is, the lower the risk pool the company is placed in, which results in cheaper premiums for everyone involved. To encourage you to be healthy, employers often offer health coaching paid for by the company to help you get your health on the right track. Utilize these plans if you get the chance.
You can also certify your non-smoker status with the insurance company in order to cut your premium down. Many employers offer discounts to non-smokers or non-tobacco users, since use of tobacco products is linked to significant health problems and thus health costs down the road. The less risky you look, the cheaper your premiums can be.
Even if you don’t use your employer’s health insurance plan, they may offer you financial incentive for the option. If you elect not to bring your family onto the plan, you might be able to get some dollars to go spend on insurance at your spouse’s insurance plan or out in the health insurance marketplace. Not many employers will split out the cost of insurance for you, but it never hurts to ask.
Just like with finances, it is much easier to stay out of problem areas than to climb out of them after bad decisions. The easiest way to keep your lifetime health insurance costs low is to maintain your own health through proper diet and exercise. Eat better, eat less, and exercise more. If you can succeed with those three variables you greatly increase the odds that your health will be much stronger for a long period of time. Likewise, if you eat nothing but fast food and can’t find the time to exercise 20 to 30 minutes every few days, then your health and pocketbook will suffer over the long term.