According to the Kaiser Family Foundation’s Employer Health Benefits Survey, the average American family with employer-sponsored health coverage paid over $5,500 in health insurance premiums in 2020; and that does not include out-of-pocket costs. For many people, it feels like health insurance is becoming more expensive all the time. However, there are several ways in which you can potentially save money on your insurance. Here are four tips to help you find an affordable health insurance plan.
Know Your Options
The first tip to help you save money on your health insurance is simple: know your options. When you know what types of insurance plans are available and how they compare with each other, you will be in a better position to discern which type of policy is best for you and which one can save you money. The benefits of health insurance plans can vary greatly depending on whether you get private or public health insurance, and different insurers’ policies will also differ in their precise benefits.
Private health insurance plans are provided by individual companies such as an employer or a private insurance company. Public health insurance is a program operated by local, state, or federal governments in which the government covers all or some of the qualifying people’s healthcare costs. Take a more detailed look at private vs public health insurance to find the right option for you.
Do Not Assume Lower Premiums Make for a More Affordable Option
The bottom line on your health insurance may not be the monthly premium that you actually pay, so you need to keep that in mind when looking for the most affordable health insurance. For instance, if you opt for a high deductible policy, it means you will pay less in monthly premiums. However, if you need to make a claim, you will pay far more because of the deductible. As long as you stay healthy and do not have any accidents, having a plan with a lower premium and a higher deductible can be a great option to save money.
But if you should experience an injury or disease, you would end up paying out a lot more when you make your insurance claim. So, do not choose a policy based on the premium alone. Base your decision on how much you will actually get out of the plan. You need to look at how much you will have paid by the end of the policy term and consider your personal situation to make the right choice and save money.
Get a Health Savings Account
One great way of lowering your health insurance costs is to get a health savings account. With an HSA, you contribute money to the savings account, which is dedicated to tax-free healthcare costs. In addition to making tax-free contributions, an HSA enables you to save money with lower HDHP premiums. Also, your contributions roll over from one year to the next and you can invest the funds in your HSA, tax-free, to grow your savings over time. When you need to cover qualifying medical costs, you can simply make tax-free withdrawals. You will need to have an insurance plan with a high deductible to get an HSA, but if you are generally healthy, an HSA can save you money in the long run.
Ask About Discounts
Some insurers offer discounts for qualifying people, so it is always worth asking what discounts are available from specific insurers. One discount increasingly being offered by insurance companies is giving you money off when you start using a fitness tracker to monitor your health and fitness. By staying fit and allowing your insurer access to your data, you can minimize the risk you pose to your insurance company, and therefore, be offered financial advantages.