Lower Health Insurance Cost: Expectations vs. Reality

Choosing the right health insurance can be quite the task. The combination of the availability of a variety of plans and the need to find cost-effective options has influenced some of my customers negatively, in the past. While you want to save costs, you also want to ensure that you will be getting the valuable service you need. Too much focus on finding lower health insurance cost could lead to choosing plans with very low quality. You could end up spending a lot of money on future medical bills. So is finding affordable health coverage with quality benefits achievable?

In choosing an affordable health insurance plan, you want to properly consider different factors to confirm that it is really all around affordable. Plans can be easily masked as affordable to lure unsuspecting customers. Dubious marketers and sales personnel can take advantage of the lack of customer knowledge to mask a limited benefit indemnity plan, for example, as a major health insurance plan.

Lower health insurance cost is achievable. Finding affordable health insurance should involve careful consideration of the available options with a knowledgeable local health insurance agent. To put the danger of choosing health insurance without proper consideration in context, the good and bad ways to choosing a plan are highlighted below.

Right approach to obtain lower health insurance cost

As mentioned above, you should choose insurance plans after properly considering the options and with the guidance of a experienced local health insurance agent. Here are some tips in choosing low-cost insurance.

Know the limits

Before choosing a health insurance plan, you want to be sure of the limits on coverage. The coverage limit tells you how far the insurance will go in helping with the different kinds of bills you could incur.

Plans with high coverage limit come in handy when an unexpected chronic disease is developed. Decide on the range of coverage that is most suitable for you, in consultation with an agent that understands the fine prints of these offers.

Consider high-deductible plans

Choosing a high-deductible plan is one way to go about getting low-cost insurance. These plans typically have low premiums and high deductibles. In 2020, the deductible for these plans can be as high as about $12,000 for individuals and $20,000 for families, although most people choose deductibles between $5,000 and $7,500.

After choosing a high-deductible plan, you can follow it up with a plan for paying the annual deductible. A great way to handle the high deductible is to buy a supplement for your deductibles. These plans will pay you cash to match your deductible if you are admitted to the hospital, go to the ER or urgent care center and other specified events. Persons that opt for some high-deductible plans are also eligible to open a health savings account where they can deposit money pre-tax to cover the deductibles and other expenses.

Get a healthshare plan

You can opt for a healthshare plan to save costs and get affordable health coverage. These plans are typically offered by non-profit organizations. If you opt for health sharing programs, you become part of a pool of persons that put money together for their healthcare bills. You will also be required to pay a member responsibility amount, which ranges widely and is much like a deductible.

It is important to highlight the ways health sharing programs differ from regular insurance plans. When you choose an healthshare plan, you forfeit the healthcare subsidy provided by the government, in the form of ACA plans. You also don’t have the protection of a legal contract between you and a health insurance carrier. For this reason it’s important that you and your agent choose a health sharing program that has a long history of paying claims and is financially strong. On a positive note, while the ACA mandate is currently not being enforced, these plans are exempt from the mandatory payment to be made by persons without ACA plans.

Calculate your total healthcare costs

You want to choose a plan that is affordable based on real costs not assumed costs. A plan may seem affordable but on calculation of the overall expenses may be very expensive.

The possible healthcare costs incurred yearly is a combination of premiums, copay’s,deductibles, coinsurance and most importantly the services and procedures the plan does not cover. Using hypothetical examples, compute these costs and, based on your health status and other factors such as age, choose the most suitable option. For an older persons with a chronic condition, for example, a plan with a moderate deductible, few limitations on coverage and wide physician and hospital network will be most suitable.

Estimate out-of-pocket expenses

Out-of-pocket expenses include the annual deductibles. You pay deductibles before the insurance company begins to cover your costs (other than services with a co-pay). While considering the out-of-pocket expenses, examine whether you will be comfortable with spending such money when you need healthcare services. If you would be tempted to put off seeing a doctor because of the out-of-pocket expenses, then you may want to go for a plan with lower expenses.

You also want to compare your deductibles with your consumption. To confirm that you’re getting low-cost insurance, you can relate the change in premium to deductibles. Your consumption or use of healthcare services will determine your ability to choose a high-deductible plan.

Wrong approach to obtain lower health insurance cost

It is easy to choose the wrong plan when you do not understand the features of the plan and the implication of these features. Simply put, you can choose a wrong plan by considering the offer from the surface. Here are some of ways you can choose a wrong plan in a bid to get low-cost insurance.

Considering only the premium

The real cost of a plan is much more than the premium. The premium tells you how much you will pay monthly. The deductible, on the other hand, tells you how much you need to pay to begin to access the help of your insurance company.

If a plan has a high premium and low deductible and you hardly require healthcare services, there is a good chance you will be paying a ton of money that likely won’t give you any real benefit. Thus, the cost of the plan is exorbitant in relation to your consumption. You could save up the difference in premium in a tax advantaged health savings account.

Buying a limited benefits policy

These policies can be easily masked as full insurance plans. The very obvious benefits of limited benefits policies tend to cover up the disadvantages. One of these benefits is the lack of restriction on health providers. You can often access services irrespective of their location or network affiliation. Some have no deductible and start paying immediately up to their daily limitations.

However, these plans can have very low daily limits that are paid out. If a plan has a daily limit of $1,000, for example, and you have a bill of $30,000, you would be left to foot a whooping $29,000.

Choosing inaccessible plans

A plan can be described as inaccessible when you cannot use services covered. This can happen when your health providers do not accept your chosen plan. You should be sure that your doctors and local hospitals accept the insurance you’re getting. Call your doctor if necessary to confirm the acceptance of the plan before you proceed.

Choosing affordable health insurance should be based on an understanding of its features and expert advice. Depending on your situation, your local health insurance agent or social worker is often your best guide.