With Obamacare on the chopping block and the Republicans’ new healthcare plan under debate, many Americans are unsure of what their health insurance may look like in 2018. Regardless of what happens to the exchange or the individual mandate, though, there are some pretty basic tips for keeping your health insurance costs low.
What steps can you take to decrease your health insurance costs? These tricks will work whether you’re shopping on the current healthcare exchange, looking at plans on a new exchange next year, or choosing between employer plans.
Bump up that deductible
There’s a reason high-deductible health insurance plans are becoming more popular and prevalent: they can actually be cheaper. Sure, it looks like a lot when you see that you could pay $5,000+ for non-premium healthcare costs in a year. But most people, especially healthy individuals, don’t hit that deductible unless an unexpected health emergency occurs.
As with home and auto insurance, when it comes to health insurance, your monthly premiums go down as your deductible goes up. Choosing a plan with a higher deductible will cut your monthly premiums down.
Basically, you’re taking something of a gamble. By choosing a higher deductible, you’re risking that you’ll pay more in the event of an unexpected health situation or one that requires a high level of care. In exchange, you’re paying less each month for the life of the insurance policy.
Related: The Triple Tax Advantages of a Health Savings Account (HSA)
This can seem like a risky gamble, but if you do the math, high-deductible plans will often take less money out of your pocket even if you max them out!
Let’s say you opt for a plan with a $300 per month premium and a $6,800 deductible. That’s a really high deductible! But if you don’t have any health events for the year, you’re only out $3,600, give or take, in premium payments. If you have a health disaster and pay your out-of-pocket maximum, you’ll pay a total of $10,400.
Compare that to a $730 per month premium on a plan with a $1,000 deductible. You’ll pay at least $8,760 in premiums alone, even if you have no health events for the year. Even after you hit your deductible, you’ll still have to pay co-insurance for care received. So, a true health disaster could still land you at your out-of-pocket maximum, which could have you paying $15,000+ in healthcare costs for the year.
The bottom line: in a year without major health events, choosing a higher deductible plan is the easiest way to save on your healthcare costs. And even if you do have a major health event, the total cost of a high-deductible plan could still potentially be lower.
Understand your policy
One of the best ways to overspend on healthcare is to misunderstand your policy, or not to read it at all. For instance, many policies these days favor primary care doctor visits over visits to ambulatory care clinics. And nearly all policies charge a hefty co-pay for emergency room visits. If your policy is written this way, it will be much cheaper to make an appointment with your primary care physician, even if you have to wait a little longer.
Another issue to understand is pre-approvals. Can you go to a specialist on your own, or do you need your primary care doctor’s recommendation? Be sure you know this before you make specialist appointments.
Resource: How to Get Health Insurance If You’re Self-Employed
Of course, you should always be sure you understand the terminology used around payments. Coinsurance and copayments are NOT the same thing, so be sure you know how your insurance policy works before you start using it.
Choose the right facility and doctor
Again, insurance policies usually favor certain types of clinics over others. Figure out which facilities near you are going to be the most affordable options for emergent and non-emergent healthcare issues. Make a list, and keep it handy so you know where to go when something comes up.
Besides choosing the right type of facility, though, you also need to be sure you’re choosing within the right network. Some of the plans on the healthcare exchange, and even some employer healthcare plans these days, do not have a broad network. And going out-of-network for your healthcare can come with major additional costs. Get to know your network, and be sure your main practitioners and healthcare facilities are in-network for your insurance plan.
News: Yet Another Insurance Giant Pulls Out of Obamacare
Along these lines, you might also save money by going to local low-cost health clinics. If there’s a medical school near you, for instance, a university medical clinic that employs residents may have lower costs than a regular family doctor. If you’re struggling to make ends meet, low-cost clinics may have sliding payment scales to make treatment more affordable.
Use free screenings
One of the best ways to keep your healthcare costs low over the long run is, simply put, to stay healthy. You can keep a better eye on your health when you participate in check-ups and screenings. Luckily, you can get many of these screenings done for free.
Related: How Being Unhealthy Can Impact Your Finances
Right now, Affordable Care Act plans are required to pay for certain annual appointments and screenings at no additional cost to you. If you find that you need or would benefit from additional screenings for certain diseases, pre-diabetes, high blood pressure, or general health and wellness, look up community health fairs in your area. The results from these screenings can help you spot minor health issues before they turn into expensive long-term problems.
Go for generic drugs whenever possible
Some drugs are available in generic form at less than half the cost of the name brand version. On top of this, many major retailers (e.g., Wal-Mart, Costco, Target, and Walgreens) offer $4 prescriptions, and some even offer free antibiotics.
If you’re already on regular medications, talk to your doctor about whether you could switch to generics. Some people respond just as well to these cheaper versions of medications.
Check your bills
It’s easy to assume that your medical bills are always accurate. But if you get a bill and pay it right away without double-checking each line item, you’re doing yourself a disservice. Simple coding errors on your medical bill could mean big overpayments, which no one is likely to catch but you!
So each time you get a bill, go through it carefully. Be sure that all the services represented are ones that you were actually given. And then be sure that the payments and insurance payments for those services line up with your insurance policy.
Push back on treatments, drugs, and tests
Sometimes doctors get into the habit of ordering tests or prescribing drugs because they know patients’ insurance companies will foot the bill. And sometimes, these treatments and tests are completely necessary. But sometimes, they’re not.
As a patient and healthcare consumer, you should never be afraid to push back on medical recommendations. It’s okay to ask your doctor if an upgrade from one older, cheaper medication to a newer, more expensive version is actually necessary. And it’s okay to ask if it’s safe to see if a situation resolves before conducting further testing.
Of course, there’s a balance to be had here. That’s why it’s important to connect with physicians who will listen to you and whose advice you trust.
Find the right primary care physician
With that last point in mind, working with a primary care physician could save you money by preventing worse healthcare problems down the road. A primary care doctor can coordinate your care for ongoing conditions, and help you know when specialist visits are necessary. And a doctor who has adequate appointments for urgent issues can save you by preventing visits to the urgent care center or the emergency room.
And if you’re generally reviewing your insurance policies, see our articles on how to save money on car insurance, how to save money on home insurance and how to save money on life insurance.
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@Ray: Look around, you may find something acceptable, even if it’s catastrophic health insurance.
@ Carma: Good point on family doctors. Some will work with you and your financial situation.
@Rick, Trav, and Jeremy: Thanks for the suggestions! I hope it can help some people.
There are some great high deductible plans out there that offer 1 physical a year and first dollar Rx benefits. These plans are ideal for people that only see a doctor 1-2 times a year and are in great health.
If you live in northern (and maybe southern) California, and are looking for an HSA, Patelco credit union is offering an amazing 5% interest rate on their HSA savings accounts. I’ve just signed up for it so have no firsthand experience, but my insurance broker has an HSA there and loves it.
About, the well child care at the Health Department, I was not aware of that.
At one point, our son, who was about 19 at the time and uninsured, got strep throat. I called the Health Department and was told that they only did lab work for (you guessed it) sexually transmitted diseases. I asked if it counted that his girlfriend got strep throat ahead of him. This struck me odd, since strep throat was a very communicable disease but our tax dollars going into the Health Department would only cover . . . What we did was call our family doctor and tell him that our son’s girlfriend had a positive strep culture, and our son had a sore throat. Our Doctor called a penicillian prescription over to the pharmacy. It was under $10.00 to pick that up without insurance. Worth a try. I’m sure it helps when the Dr. knows the family very well.
Here’s a pretty good HSA service that I’m using that’s fairly low cost that I’d found in my research 2 years ago that people might find useful. It’s the best one I’ve found so far for new accounts:
http://www.AmericanChartered.com
– Rick
I actually don’t have health insurance, but I don’t plan on getting sick. 🙂
Like Mase I’m also using a high deductible plan with an HSA. Mine is through work. With the HSA plan I only pay for what I actually use. Last year we saved about $1600 with the HSA plan compared to the traditional insurance with copay/coinsurance. If we’d used more medical services we’d have more cost with the HSA but our maximum cost with the HSA is still about $700 less.
Extra bonus with the HSA is that we can put more money into the HSA account and then use pretax dollars to pay for any other medical expenses such as dental bills or even over the counter drugs.
Jim
@Mase: I’m glad you’ve been able to create a system that works for your health care needs.
@cemccon: Great point; thanks for sharing the tip. It”s definitely wise to double check each policy’s coverage and small print. You don’t want to find out too late.
Just one comment about raising one’s deductible: First, you need to do the math. By that, I mean you should add up the difference in premiums between, say, your $500 deductible plan and $1,000 dedcutible plan, and make sure the reduction in premiums doesn’t exceed $500. That may seem like a no-brainer, but with my employer, there is only one of their three deductible choices that doesn’t save you more in premium reductions than the increase in the deductible.
The biggest thing I’ve done in the past two years was to switch to a high-deductible health plan (HDHP) with a health savings account (HSA). I’ve been able to contribute almost $11K into the HSA the past two years (a good portion was a ‘pass-through’ of my premium directly to my HSA). Long-term, HSA’s are a no-brainer, as the money saved, coupled with the tax-savings (tax-free in, earnings tax-free, tax-free out if spent on medical expenses).