Six Strategies For Cutting Health Insurance Costs
There are six basic strategies that individuals and businesses use to effectively reduce health insurance costs.
(PRWEB) September 16, 2004
Individual consumers and employers alike struggle to maintain affordable health insurance. Price increases of more than 10% per year for more than two decades lead many buyers to wonder how high health care prices can go and when this cycle of hyperinflation will end. In the past, when prices increased by unacceptable amounts, health plan members simply switched to a less expensive competitor. Now there are fewer reputable health insurance companies in business than in the past, so there is less price competition in the health insurance market and fewer choices available to consumers.
There are six primary strategies that businesses and healthy individual shoppers1 use to cut health insurance costs:
1. Buy shorter term coverage2. A plan that lasts only 1 year is 35% less expensive than a permanent plan, and 97% of purchasers of health insurance change plans voluntarily in less than a year anyway. Taking a plan with a duration of six months cuts the cost another 25%.
2. Shop online. Web sites like MedSave. com make it easy to compare prices of various plans side-by-side. Most plans allow for immediate online enrollment, saving time and eliminating the need for follow-up appointment with an enrollment representative.
3. Use PPO Discounts - PPO discount plans are now so affordable (some are even free or built-in to other benefit plans) that it simply does not make sense to pay full cash price for out-of-pocket medical, dental or prescription costs that are not covered by health insurance. Websites like www. Ehealthdiscountplan. com offer a 30-day money-back satisfaction guarantee.
4. Utilize tax savings. Health Savings Accounts (HSA) and Healthcare Reimbursement Arrangements (HRA) can be combined with less expensive health insurance to save some money at tax filing time. These do not cut health insurance costs directly; they just make more of the out-of-pocket expenses deductible. This reduces taxes to help offset insurance costs. HSA plans can be set up at no cost for those who enroll in some high deductible insurance plans. High quality HSA-qualified insurance plans are available in most states from Assurant Health at www. FortisHSA. com (businesses, individuals and families) and from Celtic Insurance at www. celticenrollment. com (individuals and families only.
HRAs are much more liberal and do not limit insurance choices, and cost only $150 per year for a typical small business at www. FreedomBenefits. org.
5. Separate the family. When shopping for family coverage, the best deal available to the husband is different from the best deal for the wife and even different from the best health plan for the children. Families need to be creative and flexible in piecing together the combination of health insurance plans that results in the overall best value for the members collectively. Do not settle on a health plan just because one family member is not eligible. Mix and match plans for family members for greater savings and coverage.
6. Buy less coverage. When the price for traditional coverage simply becomes too much to handle, some are forced to buy less than full coverage. There are two ways to do this: 1) with any high deductible insurance, or 2) with a limited benefit plan. The fastest growing low cost health insurance plan of this type is Basic Health Insurance at www. basichealthinsurance. net. This plan is available in most states to individuals, families and businesses.
Footnotes:
1 - These strategies do not apply to individuals who need coverage for pre-existing medical conditions. These open enrollment insurance plans that cover pre-existing conditions are now handled under federal HIPAA guidelines by each of the individual states. Individuals with significant pre-existing medical conditions now hat coverage is available but expensive. It is generally not possible for a person with a significant pre-exiting conditions to find low cost health insurance.
2 - Residents of New Jersey, New York, Massachusetts, and Vermont will find it difficult or impossible to find low cost health insurance due to restrictions on minimum health insurance requirements under state law. In these states short term medical insurance is not available and the ability to utilize the other strategies may also be limited.
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