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Tips for Saving on Health Insurance

Not everyone owns a car, home or other valuables that must be insured, but everyone is likely to need to visit a hospital at one time or another. Doctors' visits, prescription drugs, surgery and cancer screenings are just a few expenses that are covered by health insurance. Health insurance can be very expensive to carry, especially if you do not have access to a group plan through an employer. However, there are several ways to potentially save on the cost of care.

  1. Limit Use of Care

    • One reason health insurance is so expensive is that many people demand frequent care. Read carefully the terms of your health plan and use as much free care as your coverage allows annually. For instance, many health plans allow for one or two free physicals and preventative screenings a year, but if you make too many medical visits, you might have to pay extra. In some cases, you might save hundreds of dollars simply by waiting until the next year to go to the doctor.

    Accept Higher Deductibles

    • Deductibles are upfront costs you must pay out of your own pocket before an insurance company will cover certain expenses. The higher your deductible, the lower your monthly insurance premiums are. Accepting higher deductibles and lower copays -- flat fees on drugs and common types of care -- is one of the easiest ways to reduce the cost of premiums. If you rarely need more than routine doctors' visits and preventative care, consider raising your deductible.

    Open a Health Savings Account

    • Health savings accounts offer tax advantages to people with high-deductible health insurance plans. Health savings accounts allow you to save money towards health expenses on a pretax basis, much like the contributions to a 401(k) plan or Individual Retirement Account (IRA). The advantage of a health savings account is that withdrawals are also tax-free if you spend money on certain qualifying medical expenses, such as your deductible. If you have access to a health savings account, save as much money as you can; you can access the funds during retirement, just as you would with a retirement account, if you don't spend the savings on healthcare expenses.

    Make Lifestyle Changes

    • Living a healthier lifestyle can potentially reduce your need for healthcare services, thereby, reducing the cost. Quitting smoking is one of the best things you can do to reduce healthcare costs. Many health plans charge extra if you are a smoker, since smoking is strongly associated with a variety of serious health problems. Maintaining a healthy weight is also important. Join a fitness club or exercise at least three days a week. Some health insurers pay an allowance towards health-club membership fees to encourage physical activity.

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