According to a Kaiser Family Foundation study , health care expenditures in the United States approached $2.6 trillion in 2010. On top of that, between 2002 and 2010, employer-sponsored health care premiums (many Americans still rely on the workplace for coverage) rose 97%.
Health care costs continue to rise, and families find that an increasing chunk of their budgets go toward paying for health insurance. If you want to use your health care dollar to best effect, you need to be careful about getting the right health insurance plan  for your situation.
3 Tips for Choosing Your Health Insurance Plan
Carrie McLean represents eHealthInsurance, and offers some insights into 3 basic things to look for when choosing a health insurance plan:
- Benefits: McLean points out that you should consider the items you most need covered by your health insurance provider. “If you want to start a family, make sure your plan has maternity benefits. If you need prescription drugs on an ongoing basis, make sure it covers the drugs you need…. Not all plans cover these sorts of benefits, or cover them in the same way.” Understand your medical benefits , and choose a plan that has what you need.
- Monthly premium: Take into account what you will have to pay to keep your coverage up-to-date. If you are willing to pay more out-of-pocket (higher deductible), you can get a discount on your monthly premium. However, if you can’t pay the higher deductible, you can pay a higher monthly premium (if it’s affordable) to spread out the cost a little more.
- Deductibles and cost-sharing: This is related to the monthly premium. But you need to pay special attention to the deductible. “Make sure the plan you choose comes with a deductible that you can afford in a pinch,” McLean recommends. “The average deductible for individual plans has increased 79% since 2005,” she continues. “But keep in mind that not all medical care is subject to the deductible. Thanks to health reform , some preventative care services are now effectively free of charge for people with coverage.”
McLean suggests that you review the “Summary of Benefits and Coverage” document that all insurance providers have to provide for you. You can get a realistic idea of what items cost under your coverage, as well as what benefits you can expect to receive with each plan.
How Does PPACA Affect Your Plan Choices?
When choosing a health insurance plan, you also need to keep in mind the Patient Protection and Affordable Care Act (PPACA). McLean says that even though there are some changes coming for 2013 , this year is largely a “gap year.” “A number of provisions from the health reform law went into effect between 2010 and 2012,” she explains. “It’s not until 2014, however, that the last big provisions of the law come into effect. These include the mandate requiring most people to have coverage, and the federal subsidies that will be made available to help some people afford coverage.”
McLean says that there is a temptation during 2013 to wait until 2014 to find health insurance. However, that might not be the best option. “How awful would it feel to go bankrupt due to medical bills right before health reform comes in to make coverage more affordable and accessible?” McLean points out.
Even if you can’t get employer-sponsored coverage, and if you are having a hard time with individual coverage , the PPACA can help you — even though protection against rejection for pre-existing conditions and other provisions aren’t in effect yet. “A 2010 provision of the health reform law strengthened state-sponsored high-risk pools and pre-existing plans,” McLean says. “You can learn more about these options through your state department of insurance or pcip.gov .”
Save Money on Your Health Insurance Plan
As you choose the right health insurance plan for your own needs, there are a few strategies you can employ to reduce your costs. Here are some of the suggestions that McLean makes for getting the best possible deal:
- Use a licensed agent that represents multiple companies to help you compare a variety of options.
- Skip benefits you don’t need so that you aren’t paying for extra coverage.
- Split up the family. You don’t all have to be covered by the same plan. Run different scenarios to see what works best for your situation.
- Go generic with your plan. “Health insurance plans that limit coverage for brand names may be able to save you money in the form of lower monthly premiums,” McLean says.
- Back up your high deductible plan with accident or critical illness coverage. “These products are often affordable and they pay money directly to you,” McLean says. “You can use the money toward your deductible.”
With the right plan, you can protect your family’s health — and your finances.
(Photo: clevercupcakes )