In today's fast changing world, purchasing health insurance has become the top priority in ones' financial planning. More and more people are concerned about health insurance as the medical cost is increasing and it has become unaffordable for many people. As a result, in order to reduce the financial burden on obtaining insurance, many people start looking for ways to save money on this medical insurance.
The cost of health insurance has skyrocketed in recent years, leaving many consumers desperate to cut costs wherever they can, without losing their coverage. Fortunately, consumers do have options and there are a variety of ways to achieve significant savings on their insurance. Here are five tips for cutting costs:
1. Increase out-of-pocket expenses
Consumers can achieve significant savings by simply choosing a policy that allows them to pay more out-of-pocket expenses This generally means paying a yearly deductible as well as co-payments for services and prescription medications. Some consumers may be wary of this option, but if they are in good health then it makes financial sense to go this route because the savings will be substantial.
2. Shop around for private insurance
Due to the rising costs of healthcare, many employers are now shifting more and more of the burden to their employees. This means that even though an employer offers health insurance, it may be possible to find a better deal by shopping around for private health insurance.
3. Review employer health insurance options at least once a year
Many households now have two incomes, and that means two employers. Always be sure to review each employer's health insurance options at least once a year because employer contributions can vary dramatically, which means significant savings can be found simply by switching to the other spouse's family coverage.
4. Watch out for COBRA
Thanks to a federal law passed in 1986 known as COBRA, laid off workers can receive an extension of their health insurance coverage for at least 18 months after they have been let go, but this may not be the best option for everyone. Keep in mind that this law only applies to companies with 20 or more employees and the laid off worker must pay the premium that the employer was paying plus a 2% administrative fee. This means that COBRA can get really expensive, really quick. In fact, individual coverage could easily be $400 or more a month, and family plans may exceed $1000. Fortunately, workers who are laid off have 60 days to make a decision, which is plenty of time to shop around and find out what their best option is.
5. Get healthy and stay that way
Health insurance costs can be lowered dramatically by simply living a healthy lifestyle. For smokers, that means kicking their habit because those that do not will pay much higher premiums due to all of the serious, even life threatening consequences of smoking. The same goes for consumers who are only moderately overweight or obese. In fact, as if saving money on health insurance was not enough of an incentive, keep in mind that obesity is one of the leading causes of death. That is why it is so important to exercise regularly and maintain a healthy weight, because doing so will eliminate many of the obesity related health problems that can cause insurance premiums to skyrocket.