Smart People Never Pay Full Price for Health Insurance

Having health insurance is a necessary step in safeguarding yourself and your family from unforeseen medical costs. However, most people overpay for insurance simply because they are unaware of strategies to save. Smart consumers know that premiums are negotiable. With proper insider secrets, you will be able to save on health insurance even as you are able to maintain your health insurance arrangement.

Here’s an outline of proven strategies and actionable tips that you can use to pay lower health insurance costs – the same tactics that smart consumers and families use every year.

1. Understand What Drives Your Premiums

Before considering how to lower costs, you’ll need to understand how insurance carriers price their premiums. Factors including the following— your age, your geographical location, your lifestyle habits, your medical history, and the type of plan— all influence your monthly premium.

• Age and health status: The older you are or the more chronic conditions you have, the more likely you will pay a higher premium.
• Plan type: Plans that provide comprehensive coverage, with low deductibles, are going to cost more than plans with high deductibles, where you can pair it with health savings accounts (HSAs).
• Network size: Plans that have a wider selection of hospitals or doctors (the network) are almost always going to cost more.

Understanding these drivers, you can negotiate or select a plan that keeps costs manageable, while balancing coverage.

2. Compare Options in the Marketplace Each Year

A common mistake is staying with the same plan each year! These things change every year in the health insurance marketplace (plans are developed, subsidies change, and rates for the providers change).

Compare plans on the government marketplace (HealthCare.gov, or your country’s equivalent) with your own private broker.

Look beyond the monthly premium and consider deductibles, copays, and out-of-pocket expenses.

Smart consumers start their research at least one month before open enrollment, which gives them adequate time to compare plans, and switch if necessary.

3. Leverage Subsidies and Tax Credits

Many individuals are unaware of the subsidies, or tax credits available via government sponsored health insurance exchanges. For example, in the U.S, premium Tax Credits can significantly offset monthly payments, based on income eligibility.

Determine if you are eligible for Medicaid or one of the state-based programs, even on a temporary basis.

If your income has changed, up or down, then it is worth updating your application, or eligibility may change, often allowing for a greater subsidy.

Higher income earners may have the opportunity to qualify for partial subsidies, depending on family size and their location.

4. Consider a High-Deductible Health Plan with an HSA

High-deductible health plans can significantly lower monthly premiums. Coupled with a Health Savings Account (HSA) you get the benefit of triple tax advantages:

• – Tax deductible contributions
• – Tax free growth
• – Tax free withdrawals for qualified medical expense

This works best if you are healthy regularly, and can afford a higher deductible and out-of-pocket cost, if medicine requires major medical expense.

5. Take Advantage of Preventive Care and Wellness Programs

People who practice smart healthcare save money because they are healthy (or at least healthier) and because most health insurance plans cover free preventive care:

You don’t typically pay anything for an annual check-up, vaccinations, screenings, and wellness visits.

Many health insurers provide incentives to promote wellness (such as discounts or gift cards) for completing health assessments, quitting smoking, or maintaining a healthy weight.

Preventive care not only helps you stay healthy but might prevent you from incurring future healthcare expenses related to untreated conditions.

6.Negotiate with Your Provider and Insurer

Not every health-related expense is negotiable, but you may be able to negotiate medical bills, or smartly ask for a discount if you pay cash.

Respond to your bill (you can ask for an itemized bill) and review the itemized bill carefully, looking for errors.

If you are paying out-of-pocket, many providers will offer a discount of 10-30% for cash payment.

Many hospitals have financial assistance plans, which include those with insurance that are having difficulty with their estimates.

Negotiation may seem uncomfortable, but it is often possible to generate no-cost savings in a structured or systematic manner.

7.Choose Generic Medications to Cut Prescription Costs

Prescription medications often represent a substantial cost. Always inquire with your doctor or pharmacist if a generic formulation is available. The generic will contain the same active ingredients; however, it will typically cost much less than its brand-name version.

• It is a good idea to compare prices at several pharmacies, to see if there are differences in pricing.
• Use a prescription discount cards, or apps, that will help identify the lowest price in your area.
• By switching to generics over the course of the year, you can reduce your medical expenses by hundreds – if not thousands of dollars.

8. Maximize Employer Benefits—even if You’re Self-Employed

If you have an employer, take a deeper look into your benefits package, as many companies offer multiple health plans, flexible spending accounts (FSA), or wellness programs.

FSAs use pre-tax dollars, which can be used for non-covered medical expenses.

Some companies provide reimbursement for completing wellness activities, or sending in proof of wellness.

If you are self-employed, check into deducting health insurance premiums from your taxes, or working with a professional organization that provides coverage through a group plan.

9. Bundle Insurance Policies When Possible

Bundling is not limited to auto and homeowners insurance. Some insurers grant discounts if you buy additional products (for example, dental/vision insurance) from them. While the savings vary, bundling can save you on administrative fees and simplify your payments.

10. Look for Special Enrollment Opportunities

Life changes—marriage, the birth of a child, moving to a new area, or losing a job—can often trigger special enrollment periods. This means you can seek new coverage outside of the regular enrollment period. You may be able to find cheaper options when life changes.

11. Work with a Licensed Health Insurance Broker

If you find health insurance overwhelming (which is understandable!) find a good broker that can help guide you through the many options available at no cost to you. Brokers are paid by the insurers and not by you, and they can:

Help find obscure discounts/lesser-known plans.

Help you avoid common problems of being underinsured or having a high out-of-pocket maximum.

Find a broker with good reviews, and credentials in your area!

12. Adopt Healthy Habits to Reduce Long-Term Costs

Finally, the single best way to save money on health insurance is to decrease your need for costly health insurance. Being healthy is a form of payment:

Eat a balanced diet, exercise, and do not use tobacco products.

Keep any chronic condition (like diabetes or high blood pressure) in check, by seeing your doctor as often as the doctor recommends.