Cheap health insurance is still available it has not gone the way of the nickel soda or the 10 cent candy bar. As with anything in life, information is power (you have to know where to look) and a little bit of hard work will go a long way (albeit a little bit of smarts along with hard work will go even farther).
So, let’s get down to it. Here are 3 things to do now (estimated time: 15 minutes) that if you actually do them could end up saving you $50, $100, or even more every month on you health insurance bill. If you would care to save $600, $1,200, or more over the next 12 months and use that money to go out to eat or go on vacation rather than giving it away to a large insurance company in extra premiums then start your 15 minute timer!
1.Evaluate your plan deductible carefully. Actuaries and product design specialists at insurance companies spend a lot of time and money to learn how they can best price their policies to maximize value for the company. This is not necessarily a bad thing as it is the goal of all non charitable companies to seek a profit. Overall, rates will stay competitive from company to company because of the competition factor. However, within the same company from plan to plan you may see interesting little differences in how the premiums change from one deductible level to another.
Try this little calculation: every time you compare a plan’s price, deductible level, and maximum out of pocket expense think of it in 12 month increments. Many people will over pay in premiums every month in order to have a lower potential out of pocket or to have extras that over the course of 12 months will cost more than if they had just paid for the extras out of pocket or kept a higher deductible.
2.Think tax smart. Take your little calculation from step 1 and add to it potential tax savings over the next 12 months. Health savings accounts make for a very attractive value proposition when you consider that an HSA’s balance rolls over from year to year (even better than a flexible spending account [FSA]), all contributions (up to IRS limits) are tax deductible, and the money grows tax free and is able to be used tax free for qualified medical expenses. The higher your tax bracket; the more advantageous an HSA is for you.
3.Get live up-to-date data. You are now armed and dangerous with your 12 month forward looking formula that incorporates premium level, deductible level, and out of pocket expense along with tax benefits. All that you now need is some up to date health insurance rates and plan features to plug into your formula. You could call up all of the insurance companies individually or you could let the ease of the Internet work to your favor. Let’s go; 5 minutes is left on the timer!
