|  | Healthcare Industry | Health Insurance

Low Rates on Health Insurance

Health insurance is one of the most important insurance products but because of the expense, it is one that families often find breaks their budget, particularly if they don't have coverage at work. Try a few strategies for finding lower rates on health insurance. Look at your individual situation and tailor a policy and premium structure for your family.

  1. Managed Care Defined

    • Managed care policies include health maintenance organizations (HMOs), preferred provider organizations (PPOs) and point of service (POS). The HMO is the strictest and only pays for health care providers in the network, and you pay a copayment each time you visit a provider. HMOs also require a primary care physician's referral if you need to see a specialist. PPOs don't require the referral, and they do pay some money toward out-of-network service providers, but PPOs have a higher deductible and copayment when you use services. POS policies offer a blend between the HMO and the PPO: a POS policy does not require a physician's referral for specialists, but it does offer lower-cost services if you see a network provider.

    Traditional Plans

    • Traditional fee-for-service plans allow you to go to any physician once you pay an out-of-pocket deductible, which means you pay out of pocket up to a certain amount, and then you use coinsurance, which is where you pay part of a bill and the insurance company pays the rest. Once you you reach a maximum out-of-pocket amount, the insurance company pays 100 percent of expenses beyond that amount.

    Managed Care Versus Traditional Plans

    • Traditional plans tend to cost more than managed care plans with similar coverage; sometimes, simply using a managed care plan can save money. Check the list of providers in the network before you buy, however. A plan does you no good if no health care providers are nearby. If you visit health care professionals frequently, a traditional plan may cost less than you'd pay for frequent copayments on managed care plans. Evaluate your situation before you select an option.

    Increase Deductibles

    • Whether you have a traditional plan or managed care, choosing to pay more out of pocket can lower your premiums. On traditional plans, increase the deductible and/or the copayment and maximum out-of-pocket amount. With managed care plans, increase the copay for each visit to a health care provider and you'll lower your premiums.

    Health Savings Accounts

    • When you increase your deductible on a traditional plan, you reduce your premium because the insurance company knows it will process fewer claims. However, not everyone can afford to lower rates by running the risk of having to pay perhaps $10,000 in medical expenses. The solution is to use a high-deductible health policy (HDHP) with a health savings account (HSA). Put the money you save on premiums into a tax-deductible savings account that grows tax-free. As long as you use the HSA funds only for health care -- which includes dental expenses and over-the-counter drugs as well -- you pay no tax on the funds from the HSA. If you don't use all the money you put into the HSA, what's left transfers to the next year and continues to grow. If you seldom have a claim, this type of plan can save hundreds of dollars each year.

    Short-Term Policies

    • Short-term health policies offer lower rates if you only need coverage temporarily. These policies are good for people between jobs and/or expect to have health insurance soon. If you belong to an organization such as the Bar Association or the chamber of commerce, you may find a group policy that offers lower rates.

Health Insurance - Related Articles