Wednesday, August 09, 2006

Ten Ways to Reduce Health Insurance Costs

A lot of people ask me about ways to reduce their health insurance rates, known as premiums.

Today, let's look at ways to reduce the cost of insurance for the individual. In another post, I'll talk about ways for small businesses to do the same.

  1. Raise your deductible. The deductible on a health insurance policy is the amount you have to pay out-of-pocket before the insurance kicks in each year. Once you reach that point, the insurance will pay 80% or 100% or whatever from then on, until January and then the deductible starts back at zero again. You may think you're getting "better insurance" if your deductible is low, but that's just not true. Overall, you will pay LESS with a high deductible policy. Less money during years when you're healthy. Less money in years when you're sick. It's always less. Your deductible should be at least $2,500.

  2. Start a Health Savings Account (HSA). An HSA is not insurance, it is a savings account that you can dip into when you have healthcare costs that happen before you reach your deductible. It is a pre-tax account, so whatever amount you put into it each year gets taken off your taxable income. With an HSA and a high-deductible policy, you are basically covered from the first dollar, and you're "self-insuring" for the small stuff and using the insurance company for the big stuff. Here's where we get our HSA - HSA Trustee Services.

  3. Use a health discount card. Yes, I know, these cards can be troublesome. Just know what you're getting. These cards can be very useful in getting discounts on prescription drugs, glasses and contact lenses. For other things, they're pretty useless. For instance, they supposedly cover "alternative practitioners" and dentists. But look into them further and you'll see that most dentists have dropped out of the discount programs, because they're tired of discounting their services. Same with alternative practitioners like chiropractors, nutritionists, massage therapists, etc. They just get tired of discounting their services so heavily, so they quit the program. HSA Trustee Services offers a discount card for free if you sign up for their HSA. (No, they're not paying me to say this.)

  4. Put ALL Western medical costs through your insurance. It seems strange to put your healthcare costs through your insurance company if you know they aren't going to pay for them because you haven't hit your deductible yet. But you earn two big advantages from doing this. First, you get the "insurance company price" for services, which often means a 30-90% discount. Yes, I've seen discounts of 90%. It's incredible. Second, you have to submit your costs to the insurance company in order to meet the deductible each year. If you've spent $5,000, but your insurance company didn't process it, they won't start paying your bills until you've run that amount through them. You need to run those costs through the insurance company, even while it's still deductible money, because you never know if this will be the year you hit the deductible.

  5. Look into ways to cut your healthcare costs. When you're seeing a doctor out-of-pocket, or even using HSA money, you will see exactly how much stuff costs. It's amazingly high! A doctor visit will often cost $150 for a few minutes. Add an MRI scan for $800, a bottle of prescription drugs for $90, and you'll see what I mean. How can you pay less? Look into Minute Clinics, quick service clinics popping up around America that offer visits to nurse practitioners with fixed prices for common services. No, it's not the place to go if you have cancer, but for smaller things, it can make a lot of sense. Check out their Website here.

  6. Consider seeing a naturopathic doctor as your first line of defense. Compare that $150, seven minute doctor visit to seeing a naturopathic doctor. Naturopaths will probably charge you $90-100, and the appointment might last an hour or more. You heard right, a naturopathic doctor will get to know you and your health issues over the course of an hour or more! Is that worth something? Further, naturopaths use herbs, supplements and dietary advice to get your health on track, not expensive drugs. Again, you'll save money.

  7. Practice defensive medicine. The least costly path in healthcare is to never get sick. Don't believe the doctors who tell you everything up to chance, or "genetics." You can do an incredible amount to help your health. Changing your diet, exercising, changing how you think can have excellent results on your overall health. The best advice I've seen on the Internet regarding this approach is from Jon Barron. Click here for his Website. Be sure to download his free e-Book, it's packed with great information.

  8. Budget for healthcare. Paying for yoga classes, naturopath visits and personal trainers might seem excessive, but if you work these costs into your monthly budget, you'll have the money to do them when the time comes each week. Budget how often you can attend the yoga classes. Maybe it's every day, maybe it's twice a month. The rest of the time you could use a yoga video at home. But budgeting for these types of preventive healthcare options will show you how investing in your own health can offer paybacks when you DON'T have to pay for that triple-bypass surgery later.

  9. Meditate. Few daily practices have as much impact on your health as meditation. Clearing your mental clutter and just sitting without thinking lowers blood pressure, calms stress and changes the way your body works - for the better. Start with very modest goals, like meditating 5 minutes twice a week. Work up to more if you can, if not, do what feels workable.

  10. In a family, insure a sick person on a different policy. If you have a family, and one person gets a chronic disease, like cerebral palsy or even cancer, you should insure that person on a separate policy. That policy will be expensive, no doubt. But the rest of the family will pay less if it's insured separately. This can be a significant amount over the course of even a year.

These ideas are taken, in large part, from my book "Health Insurance Off the Grid."

I hope this helps. If you have any questions or comments, please leave a comment on this blog.

No comments: