u are not alone when the health insurance renewal arrives and you are faced with another increase in premiums. Many people don’t take the time to look at alternatives or are afraid to make a change in fear of losing benefits or reducing coverages. Unfortunately, they may be paying in the form of higher premiums for not making the effort to explore other options. The following are five suggestions that may save you a sizable amount of money when reviewing your health insurance.
Don’t Pay for Benefits That You Typically Won’t Use – Get involved with your health insurance plan and find out what benefit options are available. Try to match the plan benefits with your most likely needs. If you are healthy and visit the doctor once a year for a physical exam don’t look at plans that provide doctor’s office co-pays. Most plans cover annual preventive benefits at 100%. If you need to see the doctor for an illness or injury, you are entitled to the contracted rate your insurance carrier has negotiated with the doctor. The contracted rate in many cases is not much higher than a co-payment benefit that you are paying additional premium to have. Don’t use prescriptions? Look at plans that offer deductibles before the prescription benefit applies. Also consider higher deductibles and self insure the minor expenses.
Explore Individual Coverage for Spouse and Children – The common way that most families are insured is through an employer sponsored group health insurance plan. The employer pays a good portion of the employee cost as a benefit to attract and retain good employees. The dependent cost for spouse and children is paid by the employee through payroll deduction. This coverage for dependents is typically 30%-50% higher than a personal individual plan because of state mandated benefits for group coverage. Comparing premiums and benefits for your dependents with quality individual insurance carriers can make a huge difference in the amount of take home pay.
Compare Worst Case Scenario – Let’s face it, health insurance was never intended to cover minor scrapes and hang nails. The main purpose should be to avoid the unforeseen major expense that can result in medical bankruptcy. When looking at comparing your current coverage to alternates look at worst case scenario. Start by making a side by side cost comparison of each plan. List the monthly premium first and multiple it by 12 months. Next, assume a catastrophic medical problem and list plan maximum deductible and out-of-pocket expenses. Add this to the annual premiums and compare the two plans. Now you can weigh the premium cost with the maximum exposure to make a more informed decision. Keep in mind that some plans continue to assess co-pays even if the maximum out-of-pocket has been reached. Others cover you at 100% after the maximums have been met. One last point on this topic…make sure to be aware of whether the deductible is a calendar year or policy year deductible. Plans with calendar year deductibles reset the deductible the first of the new year.