How to save on Health Insurance

1. Comparison Shop

Different companies provide a range of coverage and price options so it makes sense to search for the policy that best fits your needs and budget. An independent insurance agent can get you a three to four quotes from companies that offer the kind of coverage you need. If you don’t enjoy dealing with insurance agents (most people don’t) you can always ask family or friends about what policy they have and how it has worked for them.

Before you purchase insurance you will want to check the financial health of a company and learn more about its reputation. The best source of information on this topic is the AM Best ratings. The A.M Best Company insurance companies based on their overall quality and strength. It gives insurers letter grades like A++, A+, A, A-, and so on. Higher ratings mean the company is safer from collapse. Don’t buy insurance from any insurance company with an A.M. Best policy holder rating of less than “A” unless you have no other choice.

2. Improve your health

Health problems make it difficult for people to buy life insurance at good prices. Heart disease, high blood pressure, and diabetes are among the most common conditions that cause premiums to go up because they are costly to treat. The best solution to reducing the risk of these dangers is to develop a regular exercise habit and eat healthy foods in reasonable portions.

3. Stop Smoking

The most costly habit to have from a health insurance perspective is smoking. It costs money to support the habit and it will also drive up premiums by as much as 100%. Be advised that you can’t quit smoking for a day and then buy health insurance and expect the insurer to pay out a benefit if you get smoking induced lung cancer. Some insurers require that you to have never smoked in your lifetime in order to qualify as a non-smoker, while other companies just require that you be nicotine free for one to five years.

The key phrase here is nicotine free. Chewing tobacco, nicorette gum, and the patch all supply the body with nicotine and if you are regularly these or any other nicotine product you will not qualify for non-smoker rates.

4. Raise your deductible

Insurance works better as a safety net for disasters than a way to pay routine medical costs because insurance companies collect more money in premiums than they pay out in claims in order to pay expenses and turn a profit. In the long run most people will spend more money on insurance than they get back in claims so consumers will save money by raising their deductible to the highest level they can reasonably afford without suffering any financial distress.

If you can afford to set a deductible over $1,000 you may want to look into buying a Consumer-Driven Health Plan (CDHP) or a high-deductible health plan (HDHP). These plans can afford to charge consumers the lowest possible premiums by setting high deductibles.

5. Increase your co-insurance portion

This is an option, though it is not always advisable. This strategy is similar to raising the deductible because in essence you agree to pay a larger share of the bill for your health care but this is a riskier strategy because you take on more risk of financial distress in the event of a serious health problem.

For example Jill increases her co-insurance from 90/10 to 80/20 meaning she will now pay 20% of her medical bills instead of just 10%. She saves a lot of money on her monthly premiums until one day she is diagnosed with breast cancer. Her treatments over the next year total $250,000 and because she increased her copay she has to cover $50,000 instead of $25,000.

6. Start a Health Savings Account

Much like a 401K pre-tax dollars can be contributed to a health savings account which is used to pay medical costs tax free until a deductible is met at which point the insurance kicks in. These plans are usually paired with a High deductible health insurance plan.

7. Visit an In-Network doctor

If your doctor and the lab he works in are both in network an HMO can be just as good as a PPO and it will offer lower premiums. If you are willing to do a little research before visiting a doctor to make sure s/he is in network than an HMO can work for you.

8. Don't pay for duplicate coverage

If both you and your spouse have group health plans offered through work investigate which one will cover both you needs at the best price. Also if you and your spouse have children make sure that one spouses coverage is covering the whole family and don't buy any more.

9. Reassess your needs periodically

10. Look into group plan savings

If you buy health insurance through a small employer you may have several health insurance options that you are not aware of. For example if you and your coworkers decide that some of the current coverage you may have are too expensive or unnecessary (like infertility or mental health treatment) you can ask your employer to drop that coverage at renewal time in order to cut down premiums.

11. Raise your credit score

Your credit score is one of the factors health insurance companies use to estimate how your chance of needing medical coverage because credit worthiness correlates with healthy lifestyles. If you are paying your bills on time and keeping your debt under control you will pay smaller premiums than people who are less credit worthy.

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