How to Save Money on Health Insurance

Posted on Jan 1, 2010

Health insurance premiums are becoming a larger and larger portion of the typical Colorado family’s budget.  For most, the rate of increase is not sustainable — but what do you do?  It would be unwise to go without health insurance coverage, but something has got to change.

Here are five steps that you can take to save money on your health insurance premiums (and/or reduce other health-related expenses):

Step 1
Consider taking a prudent risk by going with a higher deductible health plan. Doing so can save you hundreds (or even thousands) of dollars per year.  Every dollar saved can pay “first dollar” benefits (i.e. co-pays and/or deductibles) if needed.  And, if you don’t need to spend it on health care, it is pure savings.  In addition, the purchasing power of these saved dollars is increased by 40% to 50% if the savings is invested (passes through) a tax advantaged account such as an Health Savings Account (HSA) or a Flexible Spending Account (FSA).

Step 2
Consider participating in your employer’s health insurance plan if you are eligible. As a general rule, employers in Colorado are required to subsidize “employee only” premiums by at least 50%.  This, combined with the fact that you can pay your portion of the premium with pre-tax dollars via payroll deduction, results in a net price that generally can’t be beat in the individual health insurance market.  IMPORTANT NOTE: Always seek out professional advice before ditching your individual health plan for group coverage.  There are some circumstances where the individual coverage may be better for you even if it is more expensive (in the short term).  Also, while it may be cheaper for you to hop on your employer’s plan, many times purchasing individual health insurance for your dependents is a better value. save_money_health_insurance

Step 3
I have already hinted at this twice…make sure that you are being “tax smart” when considering your health insurance options. If you are an individual looking for private insurance, consider an HSA Plan (a less expensive, high deductible plan combined with a tax advantage savings account).  If you get your health insurance through your employer, make sure that you are paying your portion of premiums with pre-tax dollars via payroll deduction. While this doesn’t really save you money on your health insurance premiums directly, it does reduce your tax burden increasing your take home pay.  If your employer does not offer “pre-tax deductions” tell them to call us because these “pre-tax plans” save them money too!

Step 4
If you have maintenance prescriptions, consider buying them through your insurance company’s mail order pharmacy. Most mail order pharmacies will permit you to purchase a 90-day supply of your prescription medications for the same co-pay you would pay for a 30-day supply at a traditional pharmacy. Most doctors are familiar with this process and are more than happy to accommodate you by writing a modified prescription.  In addition, always remember to ask your doctor about generic alternatives (most plans have lower co-pays for generic drugs vs. brand names).

Step 5
If you have a life or limb threatening injury, by all means, go to the emergency room (ER).  But for other milder conditions, avoid the ER if you can.  Most ER docs will tell you that as many as 75% of the cases they see could have been handled by a less expensive urgent care center instead. The co-pays for emergency rooms can be 2-5 times as expensive as an urgent care clinic.  In addition, ERs will always prioritize cases (as they well should) which could mean for long waits for patients with milder conditions.

For more money saving tips and advice, give us a call at 970-484-1250.

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