How Financial Pros Save Money on Health Insurance
There's a reason health insurance is such a hot topic right now -- health insurance costs are taking an enormous bite out of everyone's budget. But it doesn't have to be that way.
According to insurance experts around the country, most of us are much too passive about health insurance costs, assuming we have to bite our tongues and pay up when our premiums rise or we're slammed with increasing co-pays for prescriptions and other services. Not so fast, they say; there are many ways to cut costs and keep more of our hard-earned cash for ourselves if we just ask the right questions and get help from the right people. Here are the top 12 expert-tested tips for slashing your health insurance costs.
1. Shop around.
Even if your insurance is provided by an employer, chances are you have a choice of more than one provider or more than one type of plan. Several months before the open enrollment period, sit down with your HR representative and go over the available plans with a fine-tooth comb, making sure you understand the differences.
If you get your insurance independently, start by finding a local broker or agent. Start with the National Association of Health Underwriters (NAHU) "find an agent" service to look up independent brokers in your zip code. You can also use www.ehealthinsurance.com to survey the available options, but using a broker gives you an important advocate to call on if you run into problems. Choose an agent who's not "captive" to one insurance company but instead represents a number of insurers, so that you can choose from the widest possible range of options.
Compare how each plan handles specific scenarios: preventive care, lab tests, hospitalization, drug costs. If your family has any changes on the horizon -- a hoped-for pregnancy, a teenager going to college, a family member retiring -- ask how coverage for that situation varies under each plan.
2. Read the fine print on your coverage.
Lower cost doesn't necessarily equal worse coverage, says Chicago-area insurance broker Robert Slayton. What you want is the most coverage at the lowest annual cost -- with guarantees that you won't be abandoned if you get sick. Here's what Slayton says to look for in a good policy:
A lifetime limit of at least $2 million; $5 million is better. Starting in 2011, the new health insurance law bans lifetime caps altogether.
A cap of at least $1 million in any one calendar year.
Coverage for prescriptions, not just a discount card.
An out-of-pocket maximum per calendar year. (A good plan should have a maximum out-of-pocket amount that you're required to pay per calendar year. Once you reach that limit, the plan should pay 100 percent for covered services from contracted or in-network providers.)
No artificially low caps on major services such as hospitalization and surgery. (Beware a plan that caps what it will pay for services, leaving you caught between the insurer and the provider's fee structure.)
A guarantee of "lifetime renewability." This will cease being a concern by the start of 2011, because the new health reform law specifies that insurers can no longer cancel on policyholders who get sick.