How to Lower Your Health Insurance Costs in 2021
Getting health insurance has always been crucial for us — and it’s especially really crucial now that we’re in the middle of a pandemic. After all, we don’t know when we get horribly sick or get seriously injured due to an unfortunate accident, and medical bills are notorious for being astronomically expensive — so, to be on the safe side, health insurance is a must.
But though health insurance helps us save money from hospital bills, it has its own costs that you have to pay back. And those costs can be exorbitant as well.
Thankfully, it’s possible for your health insurance costs to be pared down. The five suggestions below might be able to help you save some money.
Choose the Right Health Insurance Plan
The first thing you can do to try lowering your health insurance cost is by going through several health insurance plans and picking the right one that suits your needs.
Now, choosing the right plan for you may sound easy, but in reality, it can be tricky to do. After all, there are countless health insurance companies with countless plans, so how do you know which to pick?
Well, the hard truth is that to pick the right plan, you need to list down your specific needs and do extensive research on the various plans available on the market to see if they meet the needs you listed.
Consider a Plan That Makes You Eligible for Tax Credit Subsidy
A lot of people in the United States get their health insurance plan from their employer, but some aren’t offered anything, so they are left to their own devices. If this is your case, don’t worry much about it because if you purchase your own health insurance plan, you may receive help in paying for it from the government.
This is because the Affordable Care Act provides two kinds of subsidies for people who buy their own insurance. The first kind of subsidy is the Advanced Premium Tax Credit, which lowers the premium you pay every month. This subsidy is best suited for you if your entire family is all on one health insurance plan and you’re filing only one tax return for your family.
The second kind of subsidy is the Cost Sharing Reduction, and this lowers the out-of-pocket costs that you need to pay during a certain period — typically around a year — for the health services you’ve acquired. Your deductible, coinsurance, and copays are all included in this subsidy.
So, when you’re shopping for health insurance plans, keep all of the aforementioned information in mind and see if you’re eligible for any of the subsidies.
Usually, being eligible for a subsidy depends on several factors, especially your income (how does it compare to the Federal Poverty level?), family size, and the health insurance costs in your area.
Select a Plan from an HMO
There are several kinds of health insurance providers in the marketplace, and these are Health Maintenance Organization, Exclusive Provider Organization, Point-of-Service Plan, and Preferred Provider Organization.
Out of all these providers, you’re likely better off with a plan from Health Maintenance Organization (HMO).
This is because HMO comes with a network of physicians — with an HMO plan, you get a primary care physician who coordinates your care, and when you need to see a specialist, they will give you a referral to see another doctor within the network.
And since you only get services from doctors under HMO — out-of-network coverage only happens if there’s an emergency — your healthcare costs and your premium will be lower.
Meanwhile, the other health insurance providers enable you to see a doctor without a referral or out of their network, but you do have to pay a higher premium.
As a result, an HMO plan may be worth considering for you.
Consider a High Deductible Health Plan (HDHP)
A deductible is the fixed sum you are obliged to shell out for medical expenses before your insurance plan is activated and pays for you. A high-deductible health plan (HDHP) is a plan that has a deductible of at least $1,400 (if the plan is individual) or $2,800 (if it’s a family plan).
Additionally, this plan has an out-of-pocket maximum limit — which is the most you need to pay in a year for health expenses — of not more than $6,900 (individual plan) and $13,800 (family plan).
The primary benefit of an HDHP is that you’ll have lower premiums. As a result, this is best suited for people who don’t need to go to doctors often or take prescriptions because, with this plan, you won’t have to spend that much money on healthcare costs and insurance premiums. You might actually be able to save several hundreds of dollars with this plan.
However, you should note that if you do get an HDHP, you need to make sure that you can shoulder the out-of-pocket maximum if the need arises. That’s why you really need to think things through before you decide to go with an HDHP. Otherwise, you might have to spend more than you can save.
Pick a Plan That Allows You to Have a Health Savings Account
Getting an HDHP may seem like a gamble, but on the bright side, it offers you another advantage: it allows you to open a health savings account (HSA).
If you have an HSA, you can utilize it to expend for expenses you’ve acquired from health services. The good thing about having an HSA is that you can save on taxes with it. This is because the money you set aside for your HSA and eventually take out later is usually tax-free or tax-deductible.
Furthermore, having an HSA allows you to save on your premium. For that reason, an HDHP with HSA will help you in saving a lot of money. Just ensure you’ve weighed in all the pros and cons prior to you making your decision.
Health insurance is a necessity for all of us, especially in 2021 with a pandemic still going on all over the world. But health insurance can also require us to shell out a lot of cash, and so, it is of utmost importance that we make informed decisions to save money on health insurance costs.
So, if you want to save money, you should do any of the tips mentioned above.