How To Save Money On Health Insurance Christian

15 Minute Read | October 01, 2021

Do you want to save money on health insurance? You're not alone.

For most of us, health care costs seem to increase every year, and saving money on health insurance feels more and more out of reach. The typical American family paid more than $5,500 in health insurance premiums for their employer-sponsored health coverage in 2020.¹ That doesn't include out-of-pocket costs.

Total medical costs—including premiums, out-of-pocket costs, and federal and state taxes for health programs—come to a grand total of $12,500 for the typical American family with a $100,000 household income and an average employer-sponsored plan.²

But if you think the high cost of health insurance gives you an excuse not to have it, think again! According to a recent study, more than half of all bankruptcies (58%) can be tied back to medical expenses and an estimated 530,000 families in America file for bankruptcy each year because of medical bills and health issues.³

Not having the right health insurance in place for you and your family sets you up for a financial disaster. And when you're faced with a medical crisis, the last thing you want to worry about is how you're going to pay for it.

Do you have the right health insurance coverage? Connect with a Trusted pro today.

Having health insurance may be a nonnegotiable, but there are proactive steps you can take to save money.

Here are the best ways to save money on health insurance:

1. Check out your options at work.

2. Know how different plans work.

3. Take advantage of a Health Savings Account (HSA).

4. Stay in-network when you can.

5. Work with a health insurance pro.

Before we dig into the specific ways you can save money, let's start by defining your health insurance costs.

What Are Health Insurance Costs?

First of all, let's talk about the different ways you might encounter health care costs. Sure, you pay your health insurance premium every month, but there's more to it than that. You also owe money out-of-pocket for specific types of care.

Understanding how your health insurance works can be confusing, so let's dig in.

What is a health insurance premium?

A health insurance premium is the amount that you pay every month for your health insurance coverage.⁴ This may be the health care cost you're most familiar with because you pay it every month, whether or not you had health-related services during that time period.

How much is the average health insurance premium? The average family with an employer-sponsored plan pays about $465 per month in premiums, but that amount varies depending on your specific health care plan.⁵

What's a co-pay?

A co-pay is a flat rate you pay for specific health care services.⁶ If you go to your primary care physician and have a $45 co-pay, you will owe $45 at the time of your visit. It's best to do your research beforehand so you know exactly what to expect.

Each health insurance plan can be different when it comes co-pays. Depending on the particulars of your plan, your co-pay could apply to doctor visits, walk-in clinics, emergency rooms or prescriptions.

What is a deductible?

A health insurance deductible is the amount you are expected to pay per year for health services before your insurance plan starts to cover a large portion of your expenses.⁷ As an example: If your deductible is $1,500, you are responsible for paying for the first $1,500 of the total costs.

Keep in mind that there are some health care services that will be covered by your insurance, even if you haven't hit your deductible. And in most plans, a co-pay doesn't count toward your deductible. The specifics can vary depending on your health insurance plan, so that's why it's important to understand exactly what it offers.

What is coinsurance?

Once you hit your deductible, your health insurance plan may not pick up 100% of the remaining cost. Instead, you may be responsible for a percentage of the costs until your insurance does pick up 100%. The percentage of health care services you are responsible for paying is called coinsurance.⁸

Imagine that your coinsurance is 15%. That means you are responsible for 15% of the cost after your deductible. Your insurance company covers the remaining 85%. For example: If you've hit your deductible and you have a $200 health care charge, you owe $30.

What is an out-of-pocket maximum?

An out-of-pocket maximum is the most you have to spend on health care services in a year before your insurance plan picks up 100% of the remaining costs. As an example, the 2020 out-of-pocket limit for a Health Insurance Marketplace individual plan is $8,150 and $16,300 for a family plan.⁹

How does all of that break down? Let's take a look. Amy, a 28-year-old single professional, loves playing tennis when she's not working. It's all fun and games until she injures her knee, sending her to the emergency room. She has a $2,000 deductible with 30% coinsurance and an out-of-pocket maximum of $8,150. Since she needed surgery, her medical costs total to $30,000.

What should Amy expect to pay? Let's take a closer look.

1. First, she'll pay the $2,000 it takes to meet her deductible.

2. Her 30% coinsurance means, for the remainder of the costs ($28,000), she'll owe another $8,400. That brings her total costs up to $10,400.

3. But because Amy's out-of-pocket maximum is $8,150 (that includes her deductible and her share of coinsurance), she'll only be responsible for that amount. Her insurance company covers 100% of the rest.

Even with her health insurance, that trip to the emergency room still costs Amy a pretty penny. That's why she's glad she had cash on hand to cover the cost without going into debt. A couple months and several physical therapy sessions later, she's back on the tennis court with a completely replenished emergency fund!

How to Save Money on Health Insurance

At this point, you may be thinking, That sounds like a lot of ways to spend money on health insurance! How can I be saving money? Great question. Lucky for you, we've got some answers. These five simple tips can help you keep your health care costs down.

#1: Check Out Your Options at Work

Your first tip for saving money on insurance is to actually know your options, and those will vary depending on whether your workplace offers health insurance benefits or if you're exploring individual plans. Let's start there.

If your workplace offers health insurance benefits, that's the first place to look. In 2019, employer-based insurance covered 55.4% of the population in the United States, so by far, it's the most common scenario.¹⁰ Your employer-paid group plan may have more limited options—usually a few different plan options within the same health care company. But your employer also shares the cost of premiums with you, which helps you save money.

Advantages of employer-paid group plans:

• Your employer shares in the cost of premiums with you.

• Your premium contributions can be made pretax (as well as contributions from your employer). That translates to tax savings for you come April.

• Your employer chooses the health insurance company and plan options.

If your workplace does not offer health insurance benefits or if you're self-employed, partnering with a health insurance pro makes it easier to know your options. And just because you don't have health insurance through an employer doesn't mean you have to spend an arm and a leg on insurance costs. A pro can help you pick the right plan that works for your needs and your budget.

Advantages of individual plans:

• You get to choose the insurance company and plan that works best for you.

• You can change jobs without losing your insurance coverage.

• You can choose a plan that allows you to see the doctors you want.

#2: Know How Different Plans Work

There are two different ways to categorize health insurance plan options. You may have heard of them before, but knowing how they affect your health insurance costs can be complex.

Employer-Sponsored Health Plans

To start, let's talk about the health insurance options you'll find through your workplace.

First, there are three main network types, also known as managed care plans: preferred provider organizations (PPOs ), health maintenance organizations (HMOs), and point-of-service (POS)plans. What does all that mean? Simply put, it means that each of these types uses a specific network of providers. These providers agree to a lower cost of service in exchange for having access to the network plan members.

And then there are h igh d eductible h ealth plans (HDHPs) that come with a Health Savings Account (HSA).

So what exactly does each plan provide and how do they stack up in terms of price and coverage? Here they are, ranked from least expensive to most expensive:

1. High deductible health plans (HDHPs) – An HDHP is simply a plan with a higher deductible, compared to traditional health insurance plans. According to the IRS, a health insurance plan with a deductible of at least $1,400 for an individual or $2,800 for a family qualifies as an HDHP for 2020.¹¹

High deductible plans offer lower monthly premiums, helping you save money over the long-haul. What's the downside? With an HDHP, you will have a higher deductible and things like dental, vision and prescription drugs may not be fully covered. The good news is there are still lots of ways to save money with an HDHP, including the option to take advantage of tax-free savings for health care expenses by using a Health Savings Account (HSA)—more on those in a minute.

• Average Annual Premium for Single Coverage: $6,890

• Average Annual Premium for Family Coverage: $20,359 ¹²

1. Health maintenance organizations (HMOs) – An HMO provides access to certain physicians, clinics and hospitals in its network. To be eligible for an HMO plan, you may have to live or work in a particular service area. Your health care is only covered by insurance if you stay within your network of providers.

• Average Annual Premium for Single Coverage: $7,284

• Average Annual Premium for Family Coverage: $20,809 ¹³

2. Point-of-service (POS) – With a POS plan, you may be required to choose a specific primary care physician, who will have to refer you to specialists for care, if needed. You can receive care from physicians out of your network, but with increased out-of-pocket costs.

• Average Annual Premium for Single Coverage: $7,485

• Average Annual Premium for Family Coverage: $20,472 ¹⁴

3. Preferred provider organizations (PPOs) – If you use a PPO insurance plan, you pay less when you choose from a network of providers. You can get out-of-network care without a referral from your primary care physician, but it will be at a higher cost.

• Average Annual Premium for Single Coverage: $7,880

• Average Annual Premium for Family Coverage: $22,248 ¹⁵

We know just looking at the cost of these plans might cause your blood pressure to rise, even when you break them down into more manageable monthly chunks. But remember, you'll be splitting these premiums with your employer and chances are they'll be footing most of the bill!¹⁶

Health Insurance Marketplace Plans

What about health insurance plans outside of the workplace? Those are generally classified by tiers—like platinum, gold, silver and bronze—which estimate the costs you pay out-of-pocket compared to what your insurance covers. Plans with lower out-of-pocket costs will generally have high monthly premiums. Plans with higher out-of-pocket costs usually have much lower monthly premiums.¹⁷

How do you know which marketplace plan is best for you? There are a lot of factors involved, which is why it's always a great idea to work with a health insurance pro who can help you choose the right option for your particular situation.

#3: Take Advantage of a Health Savings Account (HSA)

An HSA allows you to contribute money to a savings account dedicated to health care costs tax-free.¹⁸ Using an HSA can be a great way to save money on health insurance costs, if it's available to you.

Here are five reasons to consider an HSA:

1. You can make tax-free contributions.
2. You save money with lower monthly HDHP premiums.
3. Your contributions roll over year-to-year.
4. You can invest your HSA funds so they grow (tax-free!) over the long-term.
5. You can make tax-free withdrawals on qualified medical expenses.

When you use pretax money to pay for co-pays and health care costs before you hit your deductible, you can reduce your overall health care costs. Even Dave takes advantage of the tax savings by using an HSA!

When you use an HSA, not only do you get the benefit of tax-free contributions and withdrawals for health care costs, you're also eligible for a tax deduction. In 2020, you can deduct your HSA contributions up to $3,500 for singles and $7,000 for married couples.¹⁹

Remember, you have to have an HDHP to open an HSA, and that higher deductible may seem scary, but when you already have the money on hand in your HSA to cover an emergency, it's no problem. A high deductible health plan with an HSA is an especially great option if you're generally healthy.

#4: Stay In-Network When You Can

In nearly all circumstances, you'll save money by using physicians, clinics and hospitals that are in your health care plan's network. When you use in-network care, you can take advantage of the relationship that your plan has with certain care providers. These providers agree to lower fees on services in exchange for having access to the plan's network members.

Depending on which health care plan you have, your costs for out-of-network care could vary.

• If you have an HMO plan, it's likely you will be responsible for the entire cost of care from an out-of-network provider.

• Do you have a PPO or POS plan? Your insurance may still cover part of your care. But since your overall costs weren't discounted, the amount you owe will be higher—even after your insurance chips in.

Let's take a look at an example:

Stephen visited an in-network physician when he started experiencing flu-like symptoms. The charge was $200. Because his plan has a discounted rate with that doctor, he got a $50 discount on the service. His insurance covered $130, leaving him with a $20 bill to pay.

If Stephen had chosen an out-of-network provider for the same service, he wouldn't have received a discount on the overall costs. Even if his insurance covered the same $130, he would be responsible for paying the remainder, which in this example would be $70. Stephen can visit an out-of-network provider if that's his preference, but he should be prepared to pay extra.

If you can stay in-network for your health care, do it. It's an easy way to save on your overall health care costs.

The responsibility of making sure your provider is in-network falls on you, so it's important to ask the right questions on the front end.Just because a clinic accepts your insurance doesn't mean that they are in-network. If you want to verify that a provider is in-network, call the customer service number for your insurance company.

What is "balance billing"?

When you work with an in-network provider, they have agreed to certain discounted rates on services. However, when you see an out-of-network provider, they can charge full price and bill you for anything that your insurance company doesn't cover. The term balance billing refers to your provider's ability to bill you for that remaining balance.²⁰

What should you do if you get billed for more than you think you owe?

Your first step is to double-check the math. Sometimes errors are made, either on your end or in your provider's billing department. If you think there may have been an error, simply call your provider and explain that you think you may have been incorrectly billed.

It's also a great idea to talk to an insurance pro, who can help you make sure that you understand your insurance bills correctly. Your insurance pro is your best advocate when it comes to navigating complex health care costs.

#5: Work With a Health Insurance Pro

A health insurance broker can help you find the best plan for your budget and your family's needs. Understanding your health insurance is complicated, so why not partner with an expert?

An insurance pro can:

• Help you review and compare your health care plan options

• Show you how co-pays and deductibles affect your overall health care costs

• Help you know if a tax-favored option like an HSA is right for you

• Navigate complex situations if you encounter unforeseen costs like balance billing

• Advocate for your best interests

Our Endorsed Local Provider (ELP) program makes it simple and easy to find quality professionals in your local area. We want you to be confident about your health insurance, and our ELPs can guide you through the process of choosing the right coverage and save you money on health insurance costs.

Find a health insurance pro today!

About the author

Ramsey Solutions

Ramsey Solutions has been committed to helping people regain control of their money, build wealth, grow their leadership skills, and enhance their lives through personal development since 1992. Millions of people have used our financial advice through 22 books (including 12 national bestsellers) published by Ramsey Press, as well as two syndicated radio shows and 10 podcasts, which have over 17 million weekly listeners.

How To Save Money On Health Insurance Christian

Source: https://www.ramseysolutions.com/insurance/how-to-save-money-on-health-insurance

Posted by: schroederandiskuld.blogspot.com

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